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Nigeria’s GDP surges to 3.84% in Q4 2024, but investors remain skeptical
Nigeria’s economy defied expectations, growing by 3.84% in Q4’24—the fastest quarterly expansion in three years. This strong performance pushed full-year growth to 3.4%, up from 2.74% in 2023 and surpassing the IMF’s projected 2.9% real GDP growth, signaling stronger-than-expected economic activity.
Among the fastest-growing sectors were rail transport (43.16%), metal ores (36.15%), and financial institutions (28.47%). Conversely, coal mining (-121.33%), electricity & gas (-5.04%), and air transport (-2.34%) recorded the steepest declines. Notably, the oil refining sector returned to growth in Q4 2024 after five years of consistent quarterly declines likely driven by increased activity at the Dangote Refinery and other modular refineries.
It is also noteworthy that the GDP data was based on the old base year of 2010. Therefore, the increased growth was not as a result of cosmetics.
Naira’s rally sparks cautious optimism
Another major surprise has been the recent rally of the naira in the foreign exchange market, making it one of Africa’s best-performing currencies so far this year. The naira has appreciated by 9.5% since the start of 2025, strengthening to ₦1,508/$ from its 2024 close of ₦1,653/$, largely due to the CBN’s B-Match platform and other policy measures. While investors welcome the stability and appreciation of the naira, they remain skeptical, recalling what happened in 2024 when the naira appreciated by 45% from ₦1,910/$ to ₦1,320/$ before depreciating sharply to ₦1,750/$. However, we anticipate only marginal depreciation this time, with the naira trading between ₦1,530/$ and ₦1,560/$ between now and Easter.
Nigeria’s talent pool is a source of dollar inflows
Despite a balance of trade surplus, Nigeria’s services account remains negative, with a $13 billion service deficit in 2023. Notwithstanding, Nigeria’s creative and talent-driven exports hold untapped significant potential. Global superstars like Tems who recently won a Grammy Award in 2025, along with Wizkid and Burna Boy, are based in Nigeria but earn in U.S. dollars, effectively contributing to service exports.
Lookman vs Burna boy – The more, the merrier
It is important to distinguish between service exports and earnings by Nigerians residing abroad. While the latter does not count toward GDP, the wealth generated by Nigerian athletes and professionals overseas, such as footballer Ademola Lookman of Atlanta and Ola Aina of Nottingham Forest, can indirectly boost foreign exchange supply through remittances and reinvestments.
With better organization, and the involvement of professional asset managers, alongside increased efficiency in the forex market, we expect higher forex inflows from these sources, further strengthening the naira and increasing external reserves.
In this latest edition of Whispers, the FDC Think Tank takes a deep dive into recent economic developments and their impact on your business and corporate strategy.
