Nigeria’s economy has posted a robust 3.7% growth in the first half of 2025, underpinned by stronger oil output and improving business conditions, according to the latest report by Stanbic IBTC Bank Nigeria’s Purchasing Managers’ Index (PMI), compiled by S&P Global.
The development aligns closely with the World Bank’s earlier projection of 3.6% GDP growth for the full year, outperforming the 3.4% growth recorded in 2024. However, this remains more conservative than the Central Bank of Nigeria’s forecast of 4.17% and the Nigerian Economic Summit Group’s bold estimate of 5.5% growth announced at the start of the year.
Commenting on the data, Muyiwa Oni, Head of Equity Research for West Africa at Stanbic IBTC Bank, stated that the 3.7% year-on-year GDP estimate aligns with expectations of a 3.5% annual growth pace.
“Insights derived from monthly PMI figures and production data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) point to a steadily growing economy,” Oni said. “This is largely supported by rising crude oil production and improved momentum in manufacturing and services, although agriculture still trails its long-term growth average of 3.6%.”
Addressing inflation and interest rate trends, Oni projected that easing inflation in comparison to 2024’s average will likely prompt the Central Bank to ease interest rates. “We foresee a 150 to 200 basis point rate cut in 2025, with further reductions of 200 to 250 basis points anticipated in 2026,” he noted.
He added that medium-term economic performance will benefit from structural reforms, reduced protectionist measures, and the diminishing impact of previous policy shocks.
Oni further commented, “While we maintain a baseline projection of 3.5% real GDP growth for 2025, a post-GDP rebasing scenario could see growth figures surge to around 4.2%.”
The June PMI data revealed that Nigeria’s business climate remained in expansion mode for the seventh straight month, though growth has decelerated for the third month in a row since peaking in March. June’s headline PMI score stood at 51.6 points, a dip from 52.7 in May and below the 2025 average of 53.1.
The slight decline was largely attributed to reduced manufacturing output. Nevertheless, other sectors remained on a positive growth trajectory. “Where output expanded, it was driven by increased orders and customer acquisition,” the report said. “New business volumes saw solid gains in June, although growth slowed to the lowest rate in five months.”
Business sentiment saw a boost, with optimism hitting its highest level since August 2022—close to the long-term series average. Many firms voiced plans to scale operations and invest in infrastructure.
Employment levels stabilized in June, following a modest dip in May. However, the backlog of work continued to climb for the third consecutive month, linked to challenges such as material shortages, delayed payments, and erratic power supply.
Supply chain efficiency remained relatively flat, though poor road infrastructure was cited by some firms as a factor behind delivery delays.
The Stanbic IBTC PMI is compiled using responses from a diverse panel of around 400 private-sector companies across sectors including agriculture, mining, manufacturing, construction, retail, and services. This index has been tracking Nigeria’s private-sector performance since January 2014.
