The Nigerian economy is estimated to have grown by about 3.7 per cent in the first half of 2025, driven by improved business conditions and increased oil production.
This was revealed in the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report compiled by S&P Global and released on Tuesday.
The PUNCH recently reported that the World Bank reaffirmed its projection that Nigeria’s economy would grow by 3.6 per cent in 2025, higher than the 3.4 per cent recorded in 2024, despite shifts in global trade dynamics. This projection is lower than the Central Bank of Nigeria’s estimate of 4.17 per cent and the ambitious 5.5 per cent GDP growth forecasted by the Nigerian Economic Summit Group in January.
According to Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, the estimated 3.7 per cent year-on-year GDP growth aligns with expectations for annual growth of 3.5 per cent.
He said, “Insights from the monthly PMIs and crude oil production data from the Nigerian Upstream Petroleum Regulatory Commission suggest an economy that grew by an estimated 3.7 per cent y/y in H1 2025, supported by higher crude oil production and improved growth in manufacturing and services, while agriculture continues to lag its long-term average growth rate of 3.6 per cent.”
On inflation and interest rates, Oni added, “Given that inflation is expected to remain softer compared to the 2024 average, interest rates are likely to be lower this year and next, we expect a 150–200 bps rate cut in 2025 and a 200–250 bps cut in 2026.”
He said these factors, combined with structural reforms, the removal of protectionist policies, and the fading impact of earlier government reforms, should support medium-term economic growth.
“We still expect the Nigerian economy to grow by 3.5 per cent y/y in real terms in 2025, but post-GDP rebasing may amplify this growth to 4.2 per cent y/y,” he added.
The June PMI reading showed that business conditions remained in expansionary territory for the seventh consecutive month, although the pace of growth slowed for the third straight month after peaking in March. The headline PMI stood at 51.6 points in June, down from 52.7 points in May and below the 2025 average of 53.1 points.
The report attributed the slower pace to a decline in manufacturing output, while other sectors continued to grow. “Where output rose, respondents linked this to higher new orders and the acquisition of new customers. Indeed, new business increased solidly in June, though the pace of expansion slowed to a five-month low.”
Despite the slowdown, business confidence improved. “Sentiment reached its highest level since August 2022, nearing the series average. Those predicting growth cited plans to expand operations and invest in infrastructure.”
Staffing levels remained largely stable in June after a slight decline in May. Backlogs of work increased for the third month in a row, attributed to material shortages, delayed payments, and power supply challenges.
Supplier delivery times were mostly unchanged, with some firms citing poor road conditions as a cause of delays.
The Stanbic IBTC Bank Nigeria PMI is compiled by S&P Global using responses from purchasing managers in a panel of around 400 private-sector companies, covering agriculture, mining, manufacturing, construction, wholesale, retail, and services. Data collection began in January 2014.
