Latest GDP Growth Rate YoY for Nigeria: December 2025 Analysis
The Nigerian economy recorded a 3.98% year-on-year GDP growth rate in December 2025, slightly below market expectations of 4.40% and down from 4.23% in September. This report leverages the Sigmanomics database to contextualize this figure against recent trends and macroeconomic factors. We explore the implications for monetary and fiscal policy, external risks, and financial markets, while outlining scenarios for Nigeria’s economic trajectory.
Table of Contents
Nigeria’s GDP growth rate of 3.98% YoY in December 2025 marks a modest slowdown from the 4.23% recorded in September 2025. This figure remains above the 12-month average of approximately 3.50%, reflecting steady but cautious expansion. The economy continues to recover from the pandemic-induced contraction seen in 2023, when growth dipped to 2.54%. The current pace suggests resilience amid global uncertainties but highlights emerging headwinds.
Drivers this month
- Oil sector output stabilized, contributing 0.90 percentage points (pp) to growth.
- Agriculture and services sectors expanded by 3.50% and 4.10% YoY, respectively.
- Manufacturing growth slowed to 2.20%, down from 3.10% last quarter.
Policy pulse
The Central Bank of Nigeria (CBN) maintains a cautious stance, with the benchmark interest rate steady at 18%. Inflation remains elevated at 21.30%, above the 6-9% target range, limiting monetary easing options. The GDP growth print supports the current tight monetary policy aimed at curbing inflation without stifling growth.
Market lens
In the immediate aftermath of the release, the NGN/USD exchange rate depreciated by 0.30%, reflecting investor concerns over slower growth. The Nigerian Stock Exchange benchmark index (NSEASI) dipped 0.50%, while 2-year government bond yields rose 15 basis points, signaling cautious sentiment.
Nigeria’s GDP growth rate of 3.98% contrasts with the 2.54% recorded in November 2023 and the 3.46% in November 2024, showing a gradual recovery trajectory. The economy’s expansion remains uneven, with inflation and fiscal deficits posing challenges.
Monetary Policy & Financial Conditions
The CBN’s tight monetary policy has kept inflationary pressures in check but at the cost of higher borrowing costs. Credit growth to the private sector slowed to 5.20% YoY in November 2025, down from 7.10% six months prior. The real effective exchange rate depreciated 2.10% over the past quarter, reflecting external pressures.
Fiscal Policy & Government Budget
The government’s fiscal deficit widened to 4.50% of GDP in Q3 2025, driven by increased spending on infrastructure and social programs. Oil revenues remain volatile, with crude prices averaging $72 per barrel in Q4 2025, down from $85 in Q2. The fiscal stance remains expansionary but constrained by debt sustainability concerns.
External Shocks & Geopolitical Risks
Global commodity price fluctuations and regional security issues continue to weigh on Nigeria’s growth outlook. The recent escalation in the Sahel region and maritime piracy risks threaten trade routes and investor confidence. Additionally, slower global demand for oil and gas dampens export revenues.
Drivers this month
- Oil sector: 0.90 pp (stable output, offset by lower prices)
- Services sector: 2.10 pp (strong consumer demand)
- Agriculture: 1.30 pp (favorable weather conditions)
- Manufacturing: 0.50 pp (slower industrial activity)
This chart highlights a trending upward recovery since late 2023, though the recent slowdown signals caution. The economy’s reliance on oil and services underscores vulnerability to external shocks and domestic policy shifts.
Market lens
Immediate reaction: NGN/USD depreciated 0.30%, NSEASI fell 0.50%, and 2-year bond yields rose 15 bps, reflecting investor caution amid slower growth.
Looking ahead, Nigeria’s GDP growth faces a mix of supportive and constraining factors. The baseline forecast projects growth near 4.00% in 2026, assuming stable oil prices and moderate inflation. However, risks remain significant.
Bullish scenario (30% probability)
- Oil prices rebound above $80/barrel, boosting export revenues.
- Improved security conditions enhance investor confidence.
- Monetary policy gradually eases as inflation moderates below 10%.
- GDP growth accelerates to 4.50–5.00% YoY.
Base scenario (50% probability)
- Oil prices remain around $70–75/barrel.
- Inflation stays elevated near 15%, limiting monetary easing.
- Fiscal deficits persist but remain manageable.
- GDP growth stabilizes near 4.00% YoY.
Bearish scenario (20% probability)
- Oil prices fall below $60/barrel, reducing government revenues.
- Security risks escalate, deterring investment.
- Inflation spikes above 20%, forcing tighter monetary policy.
- GDP growth slows to below 3.00% YoY.
Nigeria’s December 2025 GDP growth rate of 3.98% reflects a cautiously optimistic economic environment. While the pace of expansion has slowed slightly, the economy remains on a recovery path supported by oil, services, and agriculture. Policymakers face a delicate balance between controlling inflation and fostering growth amid external uncertainties and fiscal pressures. Investors should monitor oil price trends, inflation dynamics, and geopolitical developments closely.
Key Markets Likely to React to GDP Growth Rate YoY
The Nigerian GDP growth rate influences multiple asset classes, including equities, currency pairs, and commodities. Market participants track these indicators closely to gauge economic health and policy direction.
- NSEASI: Nigeria’s benchmark equity index reacts to growth shifts and investor sentiment.
- USNGN: The USD/NGN exchange rate is sensitive to growth and monetary policy changes.
- MTN: A major telecom stock, reflecting domestic economic activity.
- BTCEUR: Bitcoin’s euro pair, often a proxy for risk sentiment in emerging markets.
- EURUSD: Global risk appetite and commodity price shifts impact this major currency pair.
GDP Growth Rate vs. NSEASI Since 2020
| Year | GDP Growth Rate YoY (%) | NSEASI Annual Return (%) |
|---|---|---|
| 2020 | -1.92 | -16.50 |
| 2021 | 3.40 | 12.30 |
| 2022 | 3.10 | 8.70 |
| 2023 | 2.54 | 5.10 |
| 2024 | 3.46 | 9.40 |
| 2025 (est.) | 3.98 | 7.80 |
Insight: The NSEASI tends to track GDP growth trends with a lag, reflecting investor confidence in Nigeria’s economic prospects. Stronger GDP growth correlates with positive equity returns, underscoring the importance of macro stability.
FAQs
- What is the current GDP Growth Rate YoY for Nigeria?
- The latest GDP Growth Rate YoY for Nigeria is 3.98% as of December 2025, according to the Sigmanomics database.
- How does Nigeria’s GDP growth impact its currency?
- Stronger GDP growth tends to support the Nigerian Naira (NGN) by improving investor confidence and trade balances, while slower growth often leads to depreciation.
- What are the main risks to Nigeria’s economic growth?
- Key risks include volatile oil prices, high inflation, fiscal deficits, and geopolitical instability in the region.
Takeaway: Nigeria’s GDP growth remains resilient but faces headwinds from inflation and external shocks. Policy calibration and geopolitical stability will be crucial for sustaining momentum in 2026.
NSEASI – Nigeria’s benchmark stock index, sensitive to GDP growth and investor sentiment.
USNGN – USD to Nigerian Naira exchange rate, influenced by economic performance and monetary policy.
MTN – Major telecom stock reflecting domestic economic activity and consumer demand.
BTCEUR – Bitcoin to Euro pair, a proxy for risk sentiment affecting emerging markets like Nigeria.
EURUSD – Major currency pair impacted by global risk appetite and commodity price shifts relevant to Nigeria.
The December 2025 GDP growth rate of 3.98% YoY is down from 4.23% in September 2025 but remains above the 12-month average of 3.50%. This marks a deceleration compared to the 3.84% recorded in February 2025, indicating a slight loss of momentum in the economy’s expansion.
Sectoral contributions reveal that oil production stabilized, while manufacturing slowed. Services and agriculture remain the main growth engines, contributing 2.10 pp and 1.30 pp respectively to the headline figure.