Nigeria’s Economic Rebalancing: Services Sector to Dominate as Agriculture Shrinks
Nigeria’s services sector is poised to become the dominant force in the rebased Gross Domestic Product (GDP), projected to constitute 55% to 60% of the total economy, according to a new analysis. This marks an upward shift from its current 53% share, as the country prepares for its first GDP rebalancing exercise in over a decade.
Projections from Meristem Securities, outlined in its 2025 Full Year Outlook titled Mining Gold in the Grit, suggest that the oil sector will remain relatively static at 5% to 10%, while agriculture’s contribution is expected to fall below 25%. The rebasing, experts argue, will offer a clearer picture of Nigeria’s economic structure, integrating emerging industries such as fintech, tech startups, and digital services.
“A rebasing exercise in 2025 could bring emerging sectors like fintech, tech startups, and digital services into sharper focus while improving the capture of underreported areas such as arts and entertainment,” the report stated. “It could also spur growth in these sectors, although the contributions of traditional sectors like oil and agriculture may decline in relative terms due to the likely higher weight of the services sector.”
A Larger Economy, But With Caveats
The last GDP rebasing in 2014 unveiled a 90% increase in Nigeria’s economic size, from ₦42.40tn to ₦80.22tn. That exercise brought underrepresented industries—such as information and communication, healthcare, and real estate—into the economic fold. The 2025 rebasing is expected to follow a similar trajectory, incorporating previously excluded activities like digital economy enterprises, pension fund operations, modular refineries, and even informal and hidden economic activities.
However, analysts caution that while nominal GDP figures will rise, the underlying economic realities may not reflect corresponding growth. Meristem’s outlook warns of potential stagnation in real GDP due to persistent economic challenges, including inflationary pressures and policy inconsistency.
CFG Advisory, in its 2025 Economic Forecast titled From Reform Fatigue Quagmire to Sustainable Growth, echoed these concerns, noting that Nigeria’s GDP has declined to $195bn, losing over $300bn in value over the past decade due to devaluation, low productivity, and stagflation. Once Africa’s largest economy, Nigeria now trails South Africa, Egypt, and Algeria.
“To get the economy back on track, the government must reduce its debt burden, restore its credit rating to investment grade, and tame inflation,” said Adetilewa Adebajo, CEO of CFG Advisory. “Selling down joint venture oil assets could raise $30-50bn, which can be used to reduce debt, stabilise the naira, and boost foreign reserves.”
Policy Beyond Statistics
Afrinvest Securities highlighted the dual-edge nature of the rebasing exercise. While it may enhance Nigeria’s nominal GDP and improve inflation tracking by broadening the Consumer Price Index (CPI) basket, these statistical gains will require substantive policy action to translate into meaningful economic progress.
“Policymakers must look beyond statistical effects to drive sustainable growth,” Afrinvest noted. “A potential decline in debt-to-GDP ratios must not derail efforts to enhance fiscal discipline and debt sustainability.”
The firm underscored the importance of coordinated fiscal and monetary policy reforms, arguing that such efforts are critical to unlock the potential benefits of GDP and CPI rebasing.
The Path Forward
Despite the optimism surrounding the rebasing, Nigeria’s economic trajectory remains fraught with challenges. With inflation and policy inconsistency eroding confidence, analysts warn that the rebasing exercise, while valuable, is no substitute for structural reform.
The Central Bank of Nigeria and federal authorities face mounting pressure to implement policies that not only stabilise the economy but also catalyse productivity, investment, and employment. Only then, experts say, can Nigeria reclaim its position as Africa’s economic powerhouse.
