Nigeria’s economy showed notable resilience in the second half of 2025, buoyed by strong non-oil sector growth, according to the latest OPEC Monthly Oil Market Report (MOMR).
While crude oil production slipped to 1.422 million barrels per day (bpd) in December, down from 1.436 million bpd in November, analysts say the broader economy continued to expand. Quarterly figures show oil output consistently underperformed throughout 2025: Q1: 1.468 million bpd; Q2: 1.481 million bpd; Q3: 1.444 million bpd; Q4: 1.42 million bpd.
Cooling Inflation and Stronger Naira Support Growth
OPEC highlighted that cooling inflation, a firmer naira, and stronger remittance inflows helped offset slower oil sector performance. Headline CPI fell for the eighth consecutive month to 14.5% y-o-y in November, down from 16.1% in October.
Despite these gains, the Central Bank of Nigeria (CBN) maintained its policy rate at 27%, citing the need to secure low and stable inflation. The persistent high policy rate implies real interest rates near 12%, which could constrain aggregate demand in the short term.
Finance Minister Signals Potential Relief
Nigeria’s Minister of Finance, Wale Edun, indicated that interest rate cuts could follow if disinflation trends continue. Speaking at Abu Dhabi Sustainability Week, Edun said lower rates would reduce borrowing costs, ease government debt servicing, and potentially free up funds for fiscal programs.
Non-Oil Sector as Growth Engine
Growth in the non-oil economy rose by 0.3 percentage points to 3.9% y-o-y in Q3, reflecting strengthening activity in agriculture, services, and manufacturing. Analysts say this diversification is key to sustaining economic resilience amid oil production shortfalls.
Public Debt and Fiscal Pressures
Nigeria’s public debt remains high, with budgetary pressures compounded by volatile oil revenues and a widening fiscal deficit. Any easing in borrowing costs could significantly improve the fiscal balance and reduce debt-servicing costs.
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