Nigeria’s economy showed encouraging resilience in the first half of 2025, setting a promising tone for the second half of the year.
Amid relative exchange rate stability, easing inflationary pressures, and gradual policy recalibrations, key sectors delivered solid performances, with analysts projecting sustained momentum in the months ahead.
According to the H2 outlook report by CSL Stockbrokers, the first half of 2025 was marked by earnings rebounds across major industries, bolstered by improved macroeconomic indicators and sector-specific reforms.
From banking and cement to consumer goods, telecommunications, and crude palm oil, the breadth of recovery suggests a broad-based strengthening of the country’s productive sectors.
Here are the sectors to look out for:
Banking Sector
The banking sector emerged as a standout performer in H1, driven by growth in both interest income and fee-based earnings. However, regulatory headwinds, particularly around the Central Bank of Nigeria’s (CBN) new directives on Single Obligor Limits (SOL) and forbearance loans, initially rattled investor confidence, leading to a short-lived sell-off.
“The market reacted sharply to the new prudential guidelines, but swift responses by banks to clarify their exposure and recovery plans have since restored investor confidence,” the CSL report noted.
Dividend sustainability remains a strong pull for investors, even as the sector braces for lower net profits in 2025 compared to last year due to limited foreign exchange gains and increased provisioning.
Despite these challenges, analysts view the CBN’s tighter regulatory stance as ultimately beneficial for long-term financial system stability. Meanwhile, the sector’s relatively low price-to-book valuations compared to those of its African peers continue to present attractive entry points for investors.
Read also: Nigerian economy to grow by 3.7% in H1 on higher oil production
Cement
Nigeria’s cement industry also posted robust numbers in the first half of the year, buoyed by declining production costs and reduced FX-related losses. Sales volumes and price increases helped drive revenue growth, while infrastructural development across the country provided a reliable demand base.
“While seasonal rains typically slow construction in H2, we expect the cement sector to defy that trend this year, supported by government-led infrastructure projects and sustained private sector activity,” analysts stated. With cost pressures largely contained and pricing power intact, the sector is positioned for continued earnings growth in the second half of 2025.
Consumer Goods
Consumer-facing companies maintained profitability in H1 by implementing timely price adjustments to navigate input cost pressures and currency fluctuations. Despite continued geopolitical instability and supply chain disruptions globally, Nigerian producers appear to have found a formula to defend their margins.
“Persistent inflation in raw material prices has been a challenge, but pricing strategies and brand loyalty have kept bottom lines healthy,” the CSL research observed.
Analysts expect this trend to carry into the rest of the year as demand stabilises and cost control mechanisms improve.
Telecoms
The telecommunications sector recorded an improved performance in H1 2025, benefiting from the CBN’s FX reforms and operational recalibration by major operators. The rebound in mobile subscriptions following the SIM-NIN exercise and the recent approval of higher tariffs have positioned the sector for a revenue surge.
“The new tariff structure is a game-changer,” CSL said. “Combined with increased broadband penetration, accelerated 4G/5G rollout, and continued digital migration, we anticipate substantial growth in H2.”
The sector is also seen as a key beneficiary of exchange rate stability, given its previous exposure to FX losses on equipment and infrastructure imports.
Crude Palm Oil
The crude palm oil sector rounded off the list of top-performing industries in H1, leveraging high global prices and improved production practices. Companies like Okomu Oil and Presco are reaping the benefits of government-backed operational support under the 2024 Accelerated Stabilisation and Advancement Plan (ASAP).
Continued border closures should further limit smuggling and support the domestic market. Additionally, the report said increased local sourcing by major buyers such as Nestlé and Dangote is expected to drive demand and growth in the sector.
With tighter vegetable oil supply globally and rising biodiesel demand, Nigeria’s CPO producers are well-positioned to ride the global wave,” CSL said. Border closures and increased local sourcing by major manufacturers like Nestlé and Dangote have further bolstered the sector’s outlook.
