…A methodological recalibration reveals both opportunity and inequality in Africa’s largest economy
Nigeria’s economic story has always been one of contradictions, but the latest GDP figures—rebased from a 2010 to 2019 reference year—offer perhaps the starkest illustration yet of an economy in transition. The headline growth rate of 3.13 percent for the first quarter of 2025, while an improvement on the 2.31 percent recorded in the same period last year, masks a more complex narrative of structural realignment, sectoral divergence, and uneven prosperity. The rebasing exercise itself represents more than mere statistical housekeeping. By incorporating previously under-represented sectors—fintech, e-commerce, creative industries, and digital services—the new methodology has reduced Nigeria’s debt-to-GDP ratio to approximately 40 percent and provided a more accurate reflection of an economy that has evolved far beyond its oil-dependent origins. Yet this clearer picture reveals uncomfortable truths about who benefits from growth and who remains left behind.
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The services surge and agricultural stagnation
The dominance of Nigeria’s services sector, now accounting for 57.50 percent of GDP, tells a story of digital transformation and urban dynamism. Telecommunications and information services outperformed traditional financial institutions, driven by rising data consumption and fintech expansion. Real estate contributed 17.09 percent to GDP growth, buoyed by infrastructure spending and investor confidence ahead of policy reforms. But this success story has a dark counterpoint: agriculture, the backbone of rural livelihoods, managed a paltry 0.07 percent year-on-year growth and contracted 5.35 percent quarter-on-quarter. For a country where millions depend on farming, this stagnation—attributed to persistent insecurity and climate shocks—represents not just an economic failure but a humanitarian crisis in the making. The livestock sector’s catastrophic 39.93 percent quarterly decline and mining’s 24.42 percent contraction underscore the vulnerability of traditional rural industries. While Lagos thrives on fintech innovation and Abuja benefits from real estate booms, vast swathes of northern Nigeria face income shocks that official growth figures barely capture.
Urban prosperity vs. rural decline: Nigeria’s uneven recovery
The rebased GDP data exposes profound regional disparities that threaten social cohesion. Urban hubs like Lagos, benefiting from their concentration of telecommunications, financial services, and creative industries, are experiencing a renaissance. States with active property markets and digital infrastructure are likely to see increased internally generated revenues and economic activity. Conversely, agrarian states—particularly those in the north grappling with Boko Haram insurgency and climate variability—find their economic foundations crumbling. The irony is stark: while national GDP grows, food-producing regions stagnate, raising questions about long-term food security and social stability. For state governments, this presents both a challenge and an opportunity. The improved debt-to-GDP ratio may enhance creditworthiness, potentially unlocking new financing for infrastructure projects. But this benefit will flow primarily to states with the institutional capacity to access capital markets—likely exacerbating existing inequalities between Nigeria’s more and less developed regions.
Corporate winners and losers
Nigerian businesses find themselves navigating dramatically different fortunes depending on their sector. Companies in telecommunications, fintech, and creative industries are riding the wave of digital transformation. The publishing and entertainment sectors posted some of the strongest quarterly expansions, validating years of investment in Nollywood and Nigeria’s burgeoning tech ecosystem. However, manufacturers face a more challenging environment. High interest rates—designed to attract foreign portfolio investment and stabilise the naira—have made credit expensive and reduced consumer spending. Several manufacturing segments, including wood, rubber, and plastics, contracted sharply, with some declining nearly 40 percent quarter-on-quarter. This creates a peculiar dynamic: while aggregate growth appears healthy, many domestic manufacturers struggle with rising input costs, power instability, and weakened demand. The very monetary policies that make Nigeria attractive to foreign investors may be suffocating the small and medium enterprises that form the backbone of job creation.
The household paradox
Perhaps nowhere is Nigeria’s economic contradiction more apparent than at the household level. While GDP grows at over 3 percent, ordinary Nigerians continue grappling with inflation above 22 percent, rising transport costs following fuel subsidy removal, and increasingly expensive food. The growth story is fundamentally urban and digital—benefiting middle-class professionals in Lagos and Abuja while bypassing the rural majority. Even in cities, the benefits are unevenly distributed. While telecom executives and real estate developers prosper, informal traders and service workers struggle with reduced purchasing power and limited access to credit. The rebasing’s inclusion of e-commerce offers some hope for informal entrepreneurs, but digital literacy gaps and infrastructure deficits mean many vulnerable groups remain excluded from these new opportunities. Nigeria is simultaneously experiencing economic growth and widespread economic hardship—a paradox that speaks to fundamental structural weaknesses.
“The very monetary policies that make Nigeria attractive to foreign investors may be suffocating the small and medium enterprises that form the backbone of job creation.”
Beyond the numbers
The rebased GDP figures serve as both mirror and map—reflecting current realities while pointing toward future possibilities. They validate Nigeria’s evolution toward a more diversified, services-oriented economy less dependent on oil revenues. The statistical recognition of creative industries, fintech, and digital services sends important signals to investors and policymakers about where value creation is occurring. But statistics alone cannot address Nigeria’s deeper challenges. The country needs what might be called “inclusive digitization”—ensuring that the benefits of technological advancement reach beyond urban elites. This requires targeted interventions: improving rural internet connectivity, providing digital literacy training, and creating pathways for informal workers to participate in the formal economy.
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Policy imperatives
The rebased GDP data should prompt a fundamental rethinking of development strategy. First, agricultural transformation must become a national priority, with investments in climate-resilient infrastructure, improved security in farming regions, and support for agro-processing industries that can add value to raw agricultural output. Second, monetary policy needs recalibration. While high interest rates have succeeded in attracting foreign capital, they are constraining domestic credit and hampering the very SMEs that should be driving inclusive growth. Finding the right balance—one that controls inflation without stifling entrepreneurship—remains Nigeria’s key economic challenge.
Third, sub-national governments must adapt their development strategies to the new economic reality. States can no longer rely primarily on federal oil revenue distributions. Those that invest in digital infrastructure, ease business registration processes, and create enabling environments for service sector growth will thrive. Those that don’t risk being left behind. Finally, Nigeria needs a new social contract—one that ensures the benefits of economic growth are more widely shared. This might involve targeted cash transfer programs, job creation schemes focused on labour-intensive sectors, or public works projects that provide employment while building needed infrastructure.
The verdict
Nigeria’s Q1 2025 GDP figures, viewed through the lens of rebasing, reveal an economy of remarkable potential hobbled by structural inequalities. The 3.13 percent growth rate represents genuine progress—evidence of resilience and adaptability in a challenging global environment. But it also highlights how economic success can coexist with social strain when growth is insufficiently inclusive. The rebasing exercise has given Nigeria a clearer picture of its economic landscape. The challenge now is ensuring that this clarity leads to policies that spread prosperity more widely. An economy that grows while leaving millions behind is not just economically inefficient—it’s politically unsustainable. Nigeria’s economic future will be determined not by aggregate growth rates alone, but by how well the country manages to transform statistical success into shared prosperity. The rebased GDP figures provide the roadmap; the question is whether Nigeria’s leaders have the vision and political will to follow it.
Dr. Oluyemi Adeosun, Chief Economist, BusinessDay Media
