Nigeria’s $1tn Economy Ambition Hinges on Policy Overhaul, Experts Warn
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Despite positive GDP growth, analysts say structural reforms are critical to achieving long-term economic targets.
Nigeria must undertake sweeping policy reforms if it hopes to achieve its ambition of a $1tn economy by the end of the decade, economists have warned, following the release of the latest Gross Domestic Product (GDP) figures.
Data from the National Bureau of Statistics (NBS) showed that the country’s economy expanded by 3.84% year-on-year in the fourth quarter of 2024, marking its strongest growth since the end of 2021. The oil sector recorded a 1.48% increase, while non-oil sectors grew by 3.96%, reflecting resilience despite ongoing macroeconomic pressures. Crude oil production rose to 1.63 million barrels per day, but analysts argue that deeper economic issues threaten Nigeria’s long-term growth trajectory.
Adetilewa Adebajo, CEO of CFG Advisory, warned of a significant “output gap” in the economy, stressing the need for policy realignment. “Nigeria ended 2024 with an annual GDP growth rate of 3.40%, up from 2.74% in 2023, but our total GDP declined from $363bn to $195bn due to massive currency devaluation,” he said.
“The economy remains in a state of stagflation, with GDP per capita at an all-time low. The government must overhaul its trade policies, reform the HS Codes system, and realign industrial policies to boost productivity in manufacturing, industry, and agriculture.”
Adebajo also called for the implementation of industrial policies aimed at import substitution, citing Nigeria’s successes in cement, fertiliser, and petroleum refining. “We need a roadmap for Nigeria’s three major sugar refineries—Dangote, BUA, and FMN—to eliminate raw sugar imports. This could serve as a key forex earner under the African Continental Free Trade Agreement (AfCFTA),” he added.
In its own analysis, Meristem Research projected that the oil sector would sustain its recovery into 2025, provided the government continued its efforts to curb oil theft and attract investment. “Improved security frameworks, increased infrastructure investment, and favourable economic policies will be critical in driving further growth,” the firm stated.
The broader consensus among analysts is that while Nigeria’s economic fundamentals remain strong, achieving a $1tn economy will require more than just GDP growth. “Without structural reforms, exchange rate stability, and a well-coordinated industrial strategy, Nigeria risks falling short of its aspirations,” Adebajo warned.
As the country navigates the complexities of global economic shifts, the pressure is mounting on policymakers to deliver the structural changes needed to unlock Nigeria’s full economic potential.
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