Nigeria’s economy expanded slightly faster in the fourth quarter of 2025, supported by improvements in both oil production and non-oil activities, official data showed on Friday, offering modest signs of resilience despite ongoing economic reforms and rising living costs.
Gross domestic product grew by 4.07 percent year-on-year in the October-to-December period, compared with 3.98 percent recorded in the third quarter, according to figures released by the National Bureau of Statistics (NBS).
The latest reading marks a gradual recovery in Africa’s largest economy but remains below growth ambitions outlined by President Bola Tinubu, whose administration has embarked on sweeping reforms aimed at stabilising public finances and attracting investment.
The oil sector expanded by 6.79 percent year-on-year during the quarter, while the larger non-oil sector grew by 3.99 percent, reflecting gains across services, trade and agriculture.
Nigeria’s economy has been undergoing significant adjustment since Tinubu assumed office in 2023 and introduced policies including the removal of fuel and electricity subsidies, currency liberalisation and tax reforms designed to boost government revenues.
The president has described the measures as a “once-in-a-generation” economic reset intended to place the country on a sustainable growth path, although the reforms have intensified inflationary pressures and increased the cost of living for households.
Higher fuel prices and currency depreciation have pushed transport and food costs upward, weighing on consumer purchasing power even as macroeconomic indicators show gradual improvement.
Oil production, a key driver of government revenue and foreign exchange earnings, averaged 1.58 million barrels per day in the fourth quarter of 2025. Output declined slightly from 1.64 million barrels per day recorded in the previous quarter but improved compared with 1.54 million barrels per day during the same period in 2024.
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Analysts say the improvement reflects continued efforts by authorities to curb crude theft and pipeline vandalism, longstanding challenges that have constrained Nigeria’s ability to fully benefit from global oil demand.
Despite stronger growth in the oil sector, economists note that sustained expansion will depend largely on performance in non-oil industries, which account for the majority of economic activity and employment.
Services, telecommunications and financial activities have remained key pillars of growth, helping cushion the economy against volatility in global energy markets.
However, structural challenges persist, including high inflation, limited electricity supply and foreign exchange constraints that continue to affect business operations.
The Central Bank of Nigeria has maintained tight monetary policy in an effort to contain inflation and stabilise the naira, though higher borrowing costs have also raised concerns about slowing private-sector investment.
Economists say Nigeria’s growth outlook for 2026 will hinge on improvements in oil output, exchange-rate stability and the government’s ability to ease social pressures arising from reform measures.
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While recent data suggest the economy is stabilising, many households have yet to feel the benefits of recovery as real incomes remain under pressure.
International investors are closely monitoring Nigeria’s reform programme, viewing sustained policy consistency as critical to restoring confidence in Africa’s most populous nation.
The marginal acceleration in fourth-quarter growth underscores tentative economic momentum but highlights the challenge facing policymakers as they seek to balance fiscal consolidation with inclusive growth.
Nigeria aims to achieve stronger expansion in the coming years by diversifying away from oil dependence, improving infrastructure and strengthening revenue mobilisation across the economy.
