The Nigerian economy faced a challenging year in 2024, with soaring prices and a weakened naira due to radical reforms in 2023. Despite initial hardships, the reforms, including the removal of fuel subsidies and foreign exchange liberalization, are showing signs of progress. However, to further expedite these efforts, Cardinalstone suggests three key measures: addressing inflationary constraints, promoting non-oil exports, and tackling insecurity to stimulate economic growth.
It is crucial for the government to stay committed to these reforms, as advised by analysts and the World Bank. Over the past decade, Nigeria has implemented various reforms leading to economic growth and increased foreign investment. President Bola Tinubu’s policies have accelerated the economy, with GDP expected to grow by 3.7% in 2025, driven by the oil & gas and manufacturing sectors.
While the economy is showing signs of improvement, challenges such as high inflation, exchange rate volatility, and limited social safety nets persist. As a result, Nigeria slipped to the fourth-largest economy in Africa in 2024. Despite these challenges, experts maintain that the reform agenda should continue to be implemented, as the benefits are expected to materialize in the medium term.
The outlook for Nigeria remains optimistic, with projections of moderated inflation and potential interest rate reductions by the Central Bank of Nigeria in the second half of the year. This outlook bodes well for both fixed income and equities investments.
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