GDP growth dropped by 0.25% in Q3 2025, Cardoso tells Senate

…says FX market steadier, reserves at 7-year high, capital inflows surge

Olayemi Cardoso, governor, Central Bank of Nigeria (CBN), has revealed that the country’s economy grew at a slower pace in the third quarter of 2025, despite maintaining positive momentum.

Cardoso announced that the nation’s Gross Domestic Product (GDP) increased by 3.98 per cent in Q3 2025, an improvement on the 3.86 per cent posted in the same period last year but still 0.25 percentage point lower when compared with the second quarter’s 4.23 per cent growth.

He gave the update on Thursday while appearing before the Senate Committee on Banking, Insurance and Other Financial Institutions, chaired by Tokunbo Abiru (Lagos East), for the statutory briefing for the second half of 2025.

Giving an overview of the latest economic indicators, the CBN governor said, “At the domestic front, real GDP growth sustained its positive trajectory with the economy expanding by 3.98 per cent in the third quarter 2025.

“This was higher than the 3.86 per cent recorded in the corresponding quarter of 2024 but 0.25 percentage lower than the preceding quarter.”

Cardoso attributed the year-on-year improvement to stronger output in several key sectors, noting that, “The key contributors to the broad-based growth include crop production, ICT, real estate, and financial and insurance.”

He also reported significant progress in the foreign exchange landscape, saying the CBN’s reforms had delivered a more stable market environment.

According to him, “The FX market stabilised following reforms, boosting investor confidence and foreign inflows and supporting broader economic activity.”

Cardoso added that Nigeria’s external reserves had grown substantially and that the ongoing recapitalisation exercise within the banking industry was yielding results.

He stated, “Similarly, external reserves strengthened significantly, supported by non-oil inflows and reduced reliance on FX swap, while the bank recapitalisation programme advanced, with most banks meeting new capital requirements.”

The Apex bank governor disclosed that the country’s reserves reached their highest level in nearly seven years as of mid-November.

“Foreign reserves have also rebounded strongly, reaching US$46.7 billion as of November 14, 2025, the highest level in nearly seven years, providing about 10.3 months of import cover in goods and services.

“Equally encouraging, diaspora remittances have surged by 66.7 per cent from about US$200 million per month to around US$600 million per month in recent months,” he said.

Cardoso further announced the clearance of the long-standing verified FX backlog, a move he said has significantly boosted investor trust and spurred unprecedented capital inflows.

“Another important outcome was the resolution of the US$7 billion of verified FX backlog, restoring credibility and confidence to the Nigerian economy. Consequently, foreign capital inflows reached US$20.98 billion in the first ten months of 2025, a 70 per cent increase over total inflows for 2024.

“This also represents a 428 per cent increase, compared to the US$3.9 billion recorded in 2023, reflecting a clear resurgence in investor confidence.

“The sharp increase has boosted FX liquidity, strengthened external reserves, reinforced investor confidence, supported economic growth through higher investment, and improved Nigeria’s credit profile by lowering borrowing costs.”

Briefing lawmakers further, Cardoso highlighted Nigeria’s removal from the Financial Action Task Force (FATF) grey list as another milestone that is helping restore global trust in the financial system.

He said, “Completing this progress, Nigeria’s removal from the FAFT grey list marks another significant milestone in restoring international confidence in our financial system.

“Through strengthened supervision, better compliance reporting, improved data sharing, and new governance tools, we addressed deficiencies that had kept Nigeria on the Grey list.”

He added that the benefits are both immediate and far-reaching, “Mr Chairman, it is important to note that Nigeria’s exit from the grey list has immediate and tangible benefits for us and the broader economy.

“It reduces compliance burden on correspondence banks, improves access to international finances, and ease cross-border payments and remittances.”