PwC Forecasts 3.4% Growth for Nigerian Economy

Nigeria’s economy is expected to expand by 3.4% in 2025, according to a new forecast released by global professional services firm, PricewaterhouseCoopers (PwC). The projection reflects cautious optimism for Africa’s largest economy, despite persistent challenges such as inflationary pressures, foreign exchange volatility, and infrastructural constraints.

PwC’s outlook noted that the forecast is anchored on reforms introduced by the federal government under President Bola Ahmed Tinubu, particularly in the areas of fiscal management, energy sector liberalisation, and ongoing efforts to attract foreign direct investment (FDI). The firm, however, stressed that the growth trajectory remains fragile and dependent on Nigeria’s ability to implement policies effectively and sustain investor confidence.

According to the report, Nigeria’s growth rate will be supported by a recovery in crude oil production, renewed interest in gas exploration, and gradual improvements in the agricultural and services sectors. “We project GDP growth of 3.4% for Nigeria in 2025, driven largely by reforms in the oil and gas industry, increased private sector participation, and structural changes to improve productivity across key sectors,” PwC stated.

The firm highlighted that while the global economic environment remains uncertain, with sluggish growth in advanced economies and geopolitical tensions disrupting trade flows, Nigeria still retains a unique advantage due to its large domestic market and youthful population. This demographic dividend, if effectively harnessed, could drive consumption growth, innovation, and entrepreneurship.

In its analysis, PwC warned that inflation remains one of the biggest risks to Nigeria’s outlook. Headline inflation has persisted in double digits, largely fueled by rising food prices, high energy costs, and supply chain bottlenecks. The firm stressed that unless the government strengthens monetary and fiscal coordination, inflationary pressures could erode real GDP gains and impact living standards.

Another critical factor, according to PwC, is the exchange rate regime. The unification of Nigeria’s multiple exchange rate windows in 2023 was seen as a positive step toward transparency, but volatility in the naira against major currencies continues to weigh on businesses. “Stability in the foreign exchange market is essential to restore investor confidence, reduce transaction costs, and support the competitiveness of local industries,” the report noted.

PwC also underscored the importance of infrastructure investment in sustaining growth. It noted that Nigeria’s infrastructure deficit, estimated at over $100 billion, continues to hinder productivity and competitiveness. “Improved infrastructure financing, particularly through public-private partnerships, will be critical in bridging the gap and unlocking Nigeria’s growth potential,” the firm added.

The report identified agriculture as a potential driver of inclusive growth, noting that the sector employs a significant proportion of Nigeria’s workforce. However, structural challenges such as poor mechanisation, climate change impacts, and insecurity in food-producing regions must be addressed. The firm urged government and stakeholders to intensify support for agribusinesses, value addition, and rural infrastructure to improve productivity and reduce post-harvest losses.

On the services side, PwC observed that financial technology, digital services, and telecommunications remain strong contributors to Nigeria’s GDP. With increasing mobile penetration and the expansion of digital platforms, the services sector is expected to grow faster than the traditional sectors. The firm advised policymakers to strengthen regulatory frameworks and cybersecurity to harness the sector’s full potential.

In the oil and gas sector, PwC pointed to recent developments, including the commissioning of new refineries and rising investor interest in natural gas, as positive signs. Nigeria’s crude oil output, which has struggled due to theft, underinvestment, and pipeline vandalism, is expected to improve following government interventions and new licensing rounds. Increased output could boost foreign reserves and fiscal revenues, supporting macroeconomic stability.

However, PwC cautioned that insecurity remains a major threat to economic progress. From insurgency in the North-East to banditry and oil theft in the Niger Delta, insecurity has disrupted supply chains, displaced communities, and discouraged investment. Addressing security challenges, the firm stressed, must remain a top priority for government.

The projection also comes at a time when Nigeria is aiming to achieve an ambitious $1 trillion GDP target by 2030. While the PwC forecast shows moderate growth, it suggests that much higher annual growth rates will be required to reach that milestone. To do so, the government must deepen structural reforms, expand the tax base, and strengthen governance across all levels.

Economic analysts have reacted cautiously to the PwC projection. Some argue that while the 3.4% growth forecast is achievable, it may not be sufficient to significantly reduce poverty and unemployment in a country with a rapidly growing population. They emphasize that Nigeria requires growth rates above 6% consistently to make a meaningful impact on living standards.

Others, however, see the projection as a sign of confidence in the country’s reforms and believe it could encourage more investors to look toward Nigeria as a viable growth market. “PwC’s forecast is a reflection that reforms are beginning to yield results. What Nigeria needs now is policy consistency and institutional efficiency to translate projections into tangible outcomes,” one economist observed.

For ordinary Nigerians, the ultimate test of economic expansion will be its impact on welfare. As PwC concluded in its report, “Sustainable growth must translate into improved livelihoods, reduced inequality, and greater opportunities for citizens. Growth without inclusiveness risks undermining long-term stability.”

If Nigeria successfully manages its economic reforms, stabilises its currency, and addresses insecurity, the 3.4% GDP growth projection for 2025 could mark the beginning of a steady recovery path, paving the way for stronger expansion in the years ahead.