Nume Ekeghe and Esther Oluku in Lagos and Emmanuel Addeh and James Emejo in Abuja
Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, clarified yesterday why, despite rumors that the nation might soon turn to the Bretton Woods institution for assistance, Nigeria has no reason to apply for any loans from the international lender, the International Monetary Fund (IMF).
In addition, Mr. Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), revealed yesterday that the bank plans to create a compliance department by February in order to resolve previous issues, bring the financial sector into line with international norms, and create a more robust and transparent industry.
These occurred on the same day that PricewaterhouseCoopers (PwC), a multinational consulting firm, predicted that Nigeria’s GDP will grow by 3.3% in 2025 as a result of ongoing policy improvements.
Additionally, the company forecasted a comparatively stable economy with stable currency rates bolstered by CBN reforms in the foreign exchange market, which are anticipated to increase capital inflows.
However, Edun clarified to Arise Television during the ongoing World Economic Forum (WEF) in Davos, Switzerland, that Nigeria is now depending on the World Bank and the African Development Bank (AfDB) for comparatively cheaper borrowing sources.
Furthermore, he contended that Nigeria will not require the international bank’s short-term funding intervention because it does not have a balance of payments issue.
“If you saw a scenario where you were saying that Nigeria approaches the IMF for funding, I can imagine the headlines.” However, the truth is that, as a developing nation, we do, of course, need money. The government needs money to invest in important infrastructure that will improve the business-friendly environment. We also need to borrow money.
“The entire range of funds has been utilized, including comparatively inexpensive money from the World Bank, AFDB, and the multilaterals. By persuading Nigerians of the president’s macroeconomic strategy and its potential for commercial and economic expansion as well as for enhancing the business environment, we have been able to rely on their savings.
Naturally, the commercial end of funding is the Euro bond market, which we have now approached. We have thus covered the entire spectrum. Generally speaking, IMF money is intended to assist with short-term crises and balance of payments problems.
We have a favorable trade balance when it comes to Nigeria. Our current account balance is positive. We are increasing our reserves. The Central Bank Governor recently declared that we have improved and increased the reserves by more over $10 billion.
Funding from the IMF is not the right source in this situation. At this point, we must maximize our assets after making the most use of concessional and multilateral financing strategies.
Equity must be used. In particular, the private sector in Nigeria and the private sector globally must rely on crowding in the savings through foreign direct investment. We must keep in mind that we have made great progress in enhancing the economic climate thus far,” Edun said.
He acknowledged that food inflation and living expenses are still excessive, but he clarified that in addition to limiting demand, the supply side must also be strengthened in order to reduce inflation.
But we also acknowledge and face head-on the reality of rather significant inflation. Living expenses are considerable. Food is expensive. And that is the main emphasis of Mr. President’s decision regarding the future course of action. Naturally, the Central Bank, which controls monetary tools, including interest rates, is to blame for the high rate of inflation. Furthermore, inflation affects more than simply the economy.
We are all fighting inflation. Additionally, there is much work to be done to increase the supply from a fiscal standpoint. There is more to lowering a good’s price than only limiting competition.
Increasing supply is another issue. And specifically, as has occurred during this dry season harvest in Nigeria, with coordinated efforts to supply the various inputs, herbicides, fertilizer, and seeds to smallholders in particular, we are having a decent crop, but more work needs to be done there.
In addition to expanding the economy overall, Edun noted that there is a commitment to boosting food production, which would result in reduced food prices and greater availability and affordability for Nigerians.
The minister made the case that Nigeria was progressively improving, emphasizing that the economy of this year differs from that of previous year since the necessary changes have been mainly carried out and are starting to show results.
“The economy is expanding once more. Foreign reserves are increasing. Both the deficit and the debt servicing as a proportion of GDP are declining, as is the debt servicing as a percentage of revenue. Therefore, in terms of the investment climate, we’re in a much better spot,” the minister continued.
He claims that the Nigerian delegation to Davos, headed by the vice president, has discussed business issues that will lead to billions of dollars in investments in Nigeria, particularly from those in the fast-moving consumer goods, financial payments, and large international corporations sectors.
Additionally, they have previously stated that they are prepared and eager to make these investments right away given the better foreign exchange system and investment climate.
In addition, the minister noted, “we have several other bilateral meetings scheduled to speak with investors who we hope will be making their decisions to invest in the Nigerian economy, create jobs, grow the economy, and help reduce poverty in our country.”
In addition, he said that President Bola Tinubu is currently receiving a lot of praise and respect for having guided Nigeria’s economy and society away from what he called disastrous, unnecessary, and extremely expensive spending on various subsidies.
After achieving that, he emphasized that investors would soon begin flooding into Nigeria and gave his word that Tinubu was committed to continuing on the path of economic improvement.
Once more, in the context of Africa, Nigeria is drawing the greatest amount of investment in the oil and gas industry. It had previously lagged behind. It has returned to the forefront. Additionally, I believe that other sectors of the Nigerian economy are experiencing the same issue. Every one of the 19 main subsectors is expanding. They’re getting better.
And it is important to stress that investors, both Nigerian investors as well as foreign direct investors, are waiting in line and prepared to enter. The outlook, in my opinion, is for an ongoing improvement in the investment climate, which would raise the Nigerian economy’s competitiveness and productivity. The economy will expand, jobs will be created, and poverty will be decreased.
When it comes to lowering poverty, there is a shared commitment to preserving the social safety net and enhancing the provision of assistance, especially to the most vulnerable and impoverished, through direct benefit transfers and other measures that lower living expenses. Thus, the future is promising. He asserted, “The outlook is very positive.”
He said that the recent approval of a 50% increase in phone charges will help the telecoms run more efficiently and that it will be reviewed further.
“Well, I agree with you that it’s important to take into account the fact that, over the course of a 12-year period, costs have increased and inflation has occurred. This must naturally be reflected in the competition for business among the telcos, which, of course, have regulated their pricing to some degree. They are not simply allowed to impose any tariff they choose.
Therefore, it is necessary to represent the recent increase in the cost of living. However, I believe that fifty percent is a good place to start. It all comes down to compromise and the order and timing of some of these adjustments, which are already required. In this instance, we want the telecoms, which are an essential part of the Nigerian economy and the infrastructure that is a part of the Nigerian business environment, to function well.
“We want them to end calls quickly.” We do not want calls to be dropped. We want them to provide high-quality services. Additionally, we want them to expand, create jobs, and essentially raise the nation’s GDP.
And for that reason, this fifty percent increase has occurred. And as we move forward, I think that this is a scenario that will be examined from a forward perspective. In this area, study, conversation, and discussion will continue,” he continued.
By February, the Central Bank of Nigeria (CBN) would have a compliance department, according to Cardoso, the bank’s governor. According to him, the action was taken to rectify previous issues, bring the financial sector into compliance with international norms, and create a more resilient and transparent industry that might propel the nation’s progress.
The Nigerian Economic Summit Group (NESG) released its 2025 Macroeconomic Outlook Report in Lagos, and Cardoso was a speaker at the event.
He added that the department will be operational by the end of February and will have both an internal and external focus.
According to him, the government would improve market oversight by keeping an eye on participants to make sure best practices are followed, and those who don’t would face consequences.
It is anticipated that this approach will increase investor trust and build a more reliable and effective financial system.
Building on the 3.36 percent growth anticipated in 2024, the CBN also estimates a 4.17 percent GDP growth for the nation in 2025.
According to Cardoso, the continued execution of governmental reforms, steady crude oil prices, higher domestic oil output, and improved refining capabilities will be the main drivers of the positive growth trajectory.
Additionally, it forecasted a 3.3% growth rate for the Nigerian economy in 2025, fueled by ongoing policy reforms. It also predicted a comparatively stable economy with stable exchange rates, bolstered by the apex bank’s FX reforms, which are anticipated to increase capital inflows.
The tax and advisory services organization also predicted that tighter monetary policies and improvements in the nation’s foreign exchange market dynamics would cause inflation to drop to 26%.
In collaboration with BusinessDay, the company organized an executive roundtable on Nigeria’s 2025 Budget and Economic Outlook, where it shared its forecasts.
But according to Cardoso, “GDP growth is projected to rise from 3.36 percent in 2024 to 4.17 percent in 2025.” Stable crude oil prices, the Dangote refinery’s expansion of refining capacity, and the revival of the Port Harcourt and Warri refineries serve as the foundation for this growth. Maintaining this upward trajectory will also depend heavily on a steady exchange rate.
He also revealed that, thanks to $6 billion in foreign capital inflows and higher oil output, Nigeria’s foreign exchange reserves had surpassed $40 billion by the end of 2024. By the middle of 2025, the nation’s oil production is expected to exceed 2.3 million barrels per day, which would further propel economic expansion.
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He emphasized the effects of the CBN’s foreign exchange policy, pointing out that programs like the Electronic Foreign Exchange Matching System (EFEMS) and the Foreign Exchange (FX) Code have increased market transparency and efficiency.
The foreign exchange matching system and the foreign currency disclosure repatriation and investment scheme will improve market efficiency and transparency, lessen the discrepancy between official and Bureau de Change (BDC) exchange rates, and promote market stability, the CBN governor stated. As of right now, our market is showing the fruits of many of those initiatives,” he said.
Additionally, the CBN started the non-resident BVN program and gave new International Money Transfer Operators (IMTOs) preliminary clearance in order to boost diaspora remittances. By giving Nigerians residing overseas access to banking services in their nation of residence, this action seeks to promote greater involvement with the financial system.
“The foreign currency disclosure repatriation and investment scheme and the foreign exchange matching system will improve market efficiency and transparency,” he stated. and promote market stability by lessening the difference between the official and BDC exchange rates. The outcome of many of those initiatives is currently seen in our market.
“We will undoubtedly fortify our systems to continuously monitor market players, guarantee that everyone operating in that market is subjected to best practices, and treat those who do not comply with them appropriately.”
“The bank recently introduced the nonresident BVN to allow Nigerians living abroad to access banking services in their birthplace and approved new IMTOs in principle to increase diaspora remittances through official channels.”
“This is a clear example of recent initiatives and products that we have launched in response to the dialogue we have had with many people overseas, understanding their problems and opportunities they are looking for in Nigeria and being able to make life much easier for them,” he said.
“I have no doubt that the outcome will be extremely favorable. The effects are already beginning to become apparent. Both the international remittances and the IMTOs are noteworthy.
With more than $6 billion in foreign capital inflow into Nigeria’s external reserves surpassing $40 billion in 2024—a major milestone that reflects increased investor confidence—our efforts have paid off. We stress once more that reserves are increasing in both quantity and quality.
He went on, “As we move forward through 2025, we want to make sure that the market-oriented policies and reforms will support a more competitive business environment.” Businesses operating in Nigeria will need to adjust to a changing economic environment as a result of these developments.
There is a lot to say about the fact that we are now in a position where the foreign exchange rate has changed. This has drawbacks, particularly for people who rely heavily on imports, but it has also created opportunities, and I see many foreign investors stepping in to seize those opportunities.
In order to adjust to the changing economic realities, “our currency is much more competitive at this stage, and the implications for exports and productive activity are significant.”
Dr. Olusegun Omisakin, the Chief Economist and Director of Research and Development at NESG, said that with consistent policy changes, Nigeria’s economy might develop at a 5.5% GDP rate. He underlined that specific actions could unleash the nation’s economic potential.
Christian Ebeke, the International Monetary Fund’s (IMF) Resident Representative for Nigeria, praised the CBN for failing to give the Federal Government Ways & Means advances in 2024, calling it a positive step. He asked decision-makers to mitigate the effects of economic reforms on marginalized populations.
However, PwC voiced fears that the nation’s growth potential might be severely hampered by ongoing economic challenges, pointing out that the CBN was probably going to stick to its monetary tightening policy throughout the year, which would result in higher interest rates in order to ensure long-term price stability.
Mr. Olusegun Zaccheaus, a partner and lead for PwC Strategy and Practice in West Africa, stated that this would affect companies by raising borrowing costs.
PwC specifically expressed worry that because of large budget deficits and high debt payment costs, fiscal sustainability may continue to be somewhat elevated.
Zaccheaus also found ways for companies to improve certain value chains, take advantage of export markets in Africa and around the world, and adjust to industry consolidation.
According to him, the National Bureau of Statistics’ (NBS) ongoing attempts to rebase the nation’s GDP might boost economic growth and lower the debt-to-GDP and tax-to-GDP ratios.
However, he warned that underlying fiscal issues including income shortfalls and growing debt servicing costs would continue, further eroding prospects for development.
An updated consumption basket, according to PwC, would give monetary authorities a more precise gauge of changes in the cost of living, allowing them to set interest rates and carry out focused interventions.
Zaccheaus added that although moderate revenue growth was projected, production and operating costs could increase due to high energy costs and infrastructure issues.
He added that FX reforms are expected to boost exports and raise Nigeria’s standing internationally.
Increased capacity for refining crude oil would lower fuel imports, he continued, while population growth and demographic changes might create chances for 5G adoption, youth-oriented businesses, energy-efficient data centers, broadband expansion, and digital innovation.
“Businesses can explore new markets and increase exports through the African Continental Free Trade Area (AfCFTA) and other regional initiatives,” he said.
“Businesses can take advantage of the growing interest in value addition for processed agricultural products.”
Businesses should get ready for such developments, he said, noting that regulatory capital needs may force mergers in the banking and insurance industries.
According to him, higher borrowing costs could reduce demand for expensive goods and have an impact on discretionary expenditure.
Kenneth Erikume, a PwC partner, also outlined important elements that are anticipated to influence the county’s industrial growth over the medium term, specifically taxation, special agro-industrial processing zones, and agricultural policy reforms.
In order to promote growth, Erikume emphasized the significance of encouraging the use of compressed natural gas (CNG), small and medium-sized businesses (SMEs), and tourism. In order to draw in investments and promote economic growth, he also emphasized the necessity of efforts that make conducting business easier.
Erikume found that mining and quarrying, especially the production and export of gemstones, were important sectors for sector-specific growth. He suggested spending money on surveillance technology to stop illicit mining.
In order to boost connection and ease trade, he also recommended building roads, hospitals, security facilities, and schools in addition to extending the country’s fiber optic network by 90,000 kilometers.
