Prologue
“A feast is made for laughter, and wine maketh merry; but money answereth all things,” says the Holy Bible in the book of Ecclesiastes 10:19. In the verse that follows, (20), the same book asks no one to curse the rich in their bedchamber. The above emphasises the importance of money in human existence. In the generally accepted street lingo in Lagos, they also say Eko o gba gbere-literally interpreted to mean, Lagos means business. When you add another take by the Religious-Money oils the wheels of evangelism; (owo ni keke inhinrere), as the Yoruba would say), you would have captured the total view of the power of money in human society.
Whether at the individual front, corporate or from the public administration perspective, money answereth all things. Thus, as Year 2025 opens today, the business front will only afford a day off, to observe the public holiday that globally welcomes the New Year.
From tomorrow January 2, businesses kick off in full swing at both corporate and personal fronts. The National Assembly, still holding on to the 2025 budget, which was rather presented quite late in December 2024, would answer to the matter of public expenditure as it affects budget upon its resumption on January 14.
Since money plays that vital role in the life of the individual and the nation, the business sector is sure to dictate Nigeria’s national outlook in a big way in the unfolding year 2025. From the oil sector, which started a rebound under the administration of President Bola Tinubu in 2024, with the resumption of local refining of petroleum products, starting from the commencement of petrol refining at the Lagos-based 650,000 barrels per day Dangote Refinery to the revival, as it were, of the old Port Harcourt refinery, and then the revitalization of Warri refinery in the last days of the year, the sector is set to provide some exciting data that could produce great boosts for the economy in 2025.
The stock market will equally play the usual leading role in the New Year. The year 2024 was full of its occasional flip-flops of bullish and bearish trends but with more predictability in the general business environment, the sector is expected to benefit tremendously.
Though the Tax Reform Bills are already before the National Assembly, the business sector would also be kept busy by its possible implications and the outcome of the final copy from the chambers. While the business community would be keeping an eye on the processes in the National Assembly, the bookkeepers would also be making their projections on the possible effects of the four bills when eventually signed into law. The business sector is expected to play key roles in the public debates and the public hearing that would be hosted by the legislature in the course of the year.
The banking sector is also expected to keep steamrolling into goodies and more goodies with high expectations of further huge returns to shareholders in dividends and profits after tax. Despite the rising lending rates as announced via the series of Central Bank Monetary Policy meetings in the outgone year, the banking sector appeared not to feel the pinch as the returns from the sector maintained a steady rise through the year. The trend is expected to continue as the year unfolds. While the president has announced the determination to reduce inflation to 15 percent in the new year, not a few Nigerians would keep their gaze on the data that would emanate from the National Bureau of Statistics (NBS) in the course of the year, just as food inflation and lending rates would also remain matters of urgent national importance.
Manufacturing was badly hit with the galloping inflation and the ever-rising interest rates in 2024, the sector would not be quiet in 2025 and it is projected that with drop in inflationary trends, the sector may start experiencing some respite.
Customs Service, which broke new grounds in the outgone year with huge returns for the federation will still remain in the news, while the ports, the maritime sector and aviation would remain top on Nigerians’ agenda in the coming months. Already, the sector can boast of stability in domestic supply of aviation fuel, but exchange rate volatility has continued to drive transport fares to the hilt. By and large, the business sector will not only remain active in the New Year; the sector is expected to produce statistics that would start projecting the nation out of the woods. These and many other sectors of the economy are unfolded in the detailed report below.
2025: Effective policy implementation to signal potential growth, improvements
In 2024, Nigeria faced several significant economic challenges that shaped the nation’s landscape. Prominent economic issues of 2024 include inflation, cost-of-living crisis
Inflation: The country experienced a consistent rise in inflation, reaching 34.60 percent in November 2024, up from 33.88 percent in October. This surge was driven by factors such as the naira devaluation and multiple petrol price hikes that exacerbated the cost-of-living crisis, energy sector challenges and other challenges. The National Bureau of Statistics (NBS) attributed the driving force of inflation rate in November 2024 to food inflation, which was 39.93 percent on a year-on-year basis, indicating 7.08 percentage points higher than the 32.84 percent recorded in November 2023. The NBS reported that Nigeria’s Gross Domestic Product (GDP) recorded 3.46 percent growth, while unemployment declined to 4.6 percent in the third quarter (Q3) of 2024.
The economic reforms, including removing fuel subsidies and naira devaluation, exacerbated the Cost-of-Living Crisis. This led to increased living costs. This situation sparked nationwide protests and strikes, with citizens demanding relief from the economic hardships.
Energy Sector Challenges: Despite promises to boost electricity supply through new solar farms, projects were stalled due to the government’s refusal to provide essential guarantees to developers. This hindered progress in addressing the country’s energy needs.
The revenue profile of the government improved significantly culminating in the Federation Accounts Allocation Committee (FAAC) sharing a total sum of about N12.918 trillion to the Federal, States, and Local Governments from January 2024 to November 2024, based on data from the Office of the Accountant General of the Federation (OAGF). The figure represents only the distributive revenue, suggesting that the country generated more revenue in the past 11 months of President Bola Ahmed Tinubu’s administration. In fact, in November 2024 alone, the country recorded landmark gross total revenue of N3.143 trillion, the highest amount ever earned in the history of Nigeria since FAAC allocations began some years ago.
The Nigeria Customs Service (NCS) overshot its 2024 revenue target of N5.079 trillion, collecting N5.79 trillion in revenue by November 12, 2024.
As the world seeks ethical and inclusive financial solutions, the Federal Government issued six Sovereign Sukuk worth ₦1.1 trillion ($657.6M), to finance 124 Federal road projects covering over 5,820 kilometers across the six geopolitical zones of the country.
The National Pension Commission (PenCom) recorded a total sum of N21.92 trillion in pension fund assets under the Contributory Pension Scheme (CPS) as of October 2024, with plans to surpass ₦22 trillion by the end of this year. Also, the Contributory Pension Scheme (CPS) recorded 10.53 million registered contributors.
The Tax Reform Bills exemplifying President Bola Tinubu’s vision for a more equitable and sustainable fiscal framework suffered a setback in the National Assembly, leading to its being stepped down for more consultations. The proposed tax reform bills are a significant step towards integrating untapped revenue sources, enhancing Nigeria’s revenue-to-GDP ratio, and positioning the country favourably among nations with high fiscal performance. The bills aim to promote fiscal equity, reduce tax evasion, and increase revenue generation. However, concerns about the potential impact on businesses, individuals, and the broader economy sparked intense debates, especially with the contentious issue of Value Added Tax (VAT) allocation and derivation taking center stage.
The Federal Government raised US$2.2 billion Eurobonds maturing in the international capital markets in 2031 (6.5-year) and 2034 (10-year) to finance the 2024 fiscal deficit and support the government’s budgetary needs. The funds have USS700 million and USS$1.5 billion placed in the 2031 and 2034 maturities, respectively. The 6.5-year and 10-year Notes were priced at Coupon and Re-offer Yields of 9.625 percent and 10.375 percent, respectively. The transaction attracted a peak order book of more than US$9.0 billion, underscoring the strong support for the transaction across geography and investor class.
The Federal Government intervened in the real sector through conditional grant scheme to the Small and Medium Enterprises (SME) and the large-scale manufacturing funding at affordable single-digit interest rates of 9 percent per annum concessional rates that encouraged these sectors. The exercise is ongoing, and only qualified entities that meet certain conditions benefit. In the case of the SME loans, previously, it was N1 million maximum, but there’s been a presidential approval recently allowing people to apply for up to N5 million under the SME intervention fund, MSME intervention fund. Similarly, for larger manufacturers, they can be funded up to N1 billion. About N16 billion has been disbursed to 22 manufacturing companies and others are applying.
Key Personalities Shaping 2024:
President Bola Tinubu
The policies direction of the administration would hold the key towards the direction of things in the New Year. He assumed office in May 2023 and started implementing significant economic reforms aimed at liberalizing the economy. His policies, including subsidy removals and currency devaluation, had profound impacts throughout 2024, driving inflation to higher than ever-seen before heights.
Joe Ajaero and Festus Osifo
Leaders of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC), respectively. They spearheaded nationwide strikes demanding increased minimum wages and better living conditions for workers.
Economic Outlook for 2025:
Growth Projections: The African Development Bank (AfDB) projects Nigeria’s economic growth to increase to 3.2% in 2024 and 3.4% in 2025, driven by improved security, higher oil production, and stronger consumer demand.
Factors and Individuals to Shape 2025 Economically
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun who unveiled a comprehensive economic plan for sustainable growth development, is a person of interest to watch concerning the economy. The plan includes a ₦49.7 trillion budget for 2025, with a focus on strategic investments and robust reforms.
He delivered a comprehensive address during the citizen and stakeholders engagement session, emphasizing President Bola Ahmed Tinubu’s commitment to economic reform, targeting sustained, inclusive growth to lift millions of Nigerians out of poverty.
To achieve this goal, he said the government has implemented subsidy reforms, which have stabilized the macroeconomic environment, reducing the fiscal deficit to 4.4 percent and debt service-to-revenue ratio from 149 percent in 2023 to 67 percent. He highlighted that foreign reserves have also grown significantly, reaching $42 billion.
The plan focuses on several key sectors, including Energy, Agriculture, Industry, and Social Protection. Investments in compressed natural gas, (LPG), and renewable energy are accelerating, while efforts to achieve food security include large-scale farming programmes. Nigeria is also leveraging its digital economy, with startups dominating Africa’s unicorn landscape.
Looking ahead, the government projects a ₦49.7 trillion budget for 2025, with ₦35 trillion in expected revenue, nearly doubling 2024 levels. Investment remains crucial, with a $20 billion target needed by 2027 to drive growth.
With this comprehensive plan, the country is poised to achieve sustainable growth and poverty reduction, improving the quality of life for all Nigerians.
Government Policies: The continuation and effectiveness of the macroeconomic stabilization agenda will be crucial. Successful implementation of initiated reforms is expected to improve Nigeria’s growth prospects.
Oil and Gas Sector Developments: Nigeria plans to auction undeveloped oil and gas blocks in 2025, emphasizing natural gas development to align with UN Sustainable Development Goals. This move aims to boost oil production and support government finances.
Consumer Spending: A return to real spending growth over 2025 is anticipated to provide some upsides to the outlook for the Nigerian consumer.
Spatial inequality continues to be large, with the best-performing regions of Nigeria comparing favorably to upper middle-income countries, while the worst-performing states fare below the average for low-income. In most areas of the country, state capacity is low, service delivery is limited, and insecurity and violence are widespread. Infrastructure gaps constrain access to electricity and hinder the domestic economic integration that would allow the country to leverage its large market size, which is aggravated by trade protectionism. Emerging problems such as the increased severity and frequency of extreme weather events, especially in the northern parts of the country (Maiduguri flooding), add to these long-standing development challenges.
However, recent reforms offer a launching pad to a new social compact for nation’s development. Strengthening macroeconomic fundamentals will allow structural reforms to be pursued and economic growth to be restored. The current low social and economic equilibrium could be switched to one marked by a better-funded and more effective State that provides efficient public services, public goods, and a conducive economic environment for the private sector to flourish and create more quality jobs for Nigerians.
In all, while 2024 presented significant economic challenges for Nigeria, the outlook for 2025 indicates potential improvements, contingent upon effective policy implementation and sectoral developments.
READ ALSO: Understanding Tinubu’s tax bills of relief for businesses, Nigerians
and then