AfDB Slashes Nigeria’s 2025 Growth Forecast to 3.2% Amid Economic Uncertainty and Policy Concerns
By Okafor Joseph Afam – June 27, 2025
The African Development Bank (AfDB) has revised Nigeria’s 2025 economic growth projection downward to 3.2%, citing rising macroeconomic uncertainty, sluggish policy reforms, and mounting fiscal pressures. The new forecast is a sharp cut from its earlier 3.9% estimate, reflecting concerns over Nigeria’s unstable investment climate, foreign exchange volatility, and slow progress in structural reforms.
In its newly released African Economic Outlook, AfDB pointed to Nigeria’s inflationary pressures, energy crisis, and foreign exchange scarcity as major factors undermining growth potential. The bank warned that unless urgent steps are taken to address structural inefficiencies and boost investor confidence, the country may struggle to meet even the revised target.
The report also flagged delays in implementing key economic reforms, such as the transition to cost-reflective electricity tariffs, petroleum subsidy removal, and broader tax policy restructuring. These delays have stalled private investment inflows and created uncertainty among domestic and foreign investors.
“Policy inconsistency, weak infrastructure, and a lack of clarity in the forex regime continue to weigh heavily on Nigeria’s economic outlook,” the AfDB report stated. It also noted that while the government’s recent push for reforms is a step in the right direction, poor execution and political resistance remain key obstacles.
The AfDB emphasized that growth in 2025 would rely heavily on improved oil production, enhanced power supply, and stronger fiscal discipline. Without these, Nigeria risks prolonged stagnation in both GDP expansion and job creation.
As Nigeria grapples with inflation near record highs, rising debt servicing costs, and dwindling foreign reserves, the AfDB’s warning adds urgency to the need for bold, consistent, and investor-friendly reforms to restore macroeconomic stability and sustainable growth.
