…Says manufacturing remains fragile as high borrowing costs weigh on productivity
By Charles Ebi
Nigeria’s economy sustained its recovery momentum in the third quarter of 2025, recording a real Gross Domestic Product ,GDP, growth of 3.98% , according to the latest policy brief by the Centre for the Promotion of Private Enterprise ,CPPE.
Although slightly below the 4.3% posted in the second quarter, the think tank said the performance reflects continued consolidation driven by improved macroeconomic stability and the impact of ongoing reforms.
The CPPE noted that stabilising the foreign exchange market, moderating inflation, improving fiscal conditions, and rising investor confidence contributed significantly to business recovery and the positive GDP outturn.
It added that these gains have strengthened sentiment across key sectors of the economy.
Despite the progress, the organisation cautioned that the cost-of-living crisis remains a major concern for households. While disinflation has begun to ease pressures on food and manufactured goods,
It stressed that social outcomes of economic reforms continue to weigh on vulnerable groups. CPPE said targeted interventions will be crucial to ensure that macroeconomic stability translates to tangible improvements in welfare.
The think tank attributed the Q3 expansion largely to the resilience of the services sector, which maintained its dominance and accounted for 53% of total output.
Digital adoption, expanding financial services and improved business confidence were identified as the main drivers.
Agriculture also posted moderate recovery with a 3.79% growth rate, up from 2.82% in the previous quarter, though insecurity, limited mechanisation and weak rural infrastructure continue to impede full recovery.
Manufacturing grew by 1.25%, reflecting sustained fragility amid high production costs, expensive borrowing, dependence on imported inputs and smuggling of competing products.
ICT remained one of the strongest performers, expanding by 5.78% driven by rapid digitalisation and increased technology adoption. Real estate recorded an exceptional 89% nominal growth, fuelled by rising property values, though CPPE warned that this trend is worsening housing affordability in major cities.
Financial services emerged as the strongest performer in the period with a growth rate of 19.63% supported by stronger economic activity and improved fiscal operations.
Trade grew modestly by 1.98%, reflecting weak consumer demand and high import costs, even as the country recorded consistent trade surpluses.
The social sectors, including education and health, recorded modest improvements at 2.51% and 2.89%, respectively, underscoring the need for increased public investment and stronger governance.
Some sectors, including textiles and apparel, paper and pulp, crude petroleum and gas, transportation, cement, iron and steel, rubber and plastics, and parts of manufacturing, experienced slower growth or remained in recession due to structural challenges.
Conversely, financial services, pharmaceuticals, construction, oil refining, auto assembly, and entertainment sectors recorded improved performance, albeit from low bases.
To sustain the recovery trend, CPPE emphasised the need for the government to address structural bottlenecks such as energy supply constraints, high logistics costs, port inefficiencies and transport infrastructure gaps.
The organisation called for targeted measures to mitigate the cost-of-living crisis, including interventions in agriculture, pharmaceuticals, transportation and energy.
It also urged strengthened agricultural productivity, enhanced manufacturing competitiveness, increased funding for social sectors, improved housing affordability through land reforms and mortgage expansion, and support for exporters to boost non-oil competitiveness.
In addition, CPPE highlighted the need to stabilise oil production and secure critical infrastructure to prevent vandalism and encourage investments in the upstream and gas industries.
The organisation concluded that Nigeria’s Q3 GDP performance reaffirms a gradual but steady recovery path supported by improved macroeconomic stability and strong showings in services, ICT, financial services and pharmaceuticals. However,
This is just as other experts stressed that achieving inclusive and sustainable growth will require addressing long-standing structural constraints while ensuring that reform benefits are felt across households and businesses.
