Mastercard Economics Institute Projects 2.9% GDP Growth for Nigeria in 2025

Highlights

• Nigeria’s GDP is projected to grow by 2.9% year over year, consumer spending is predicted to rise by 6%, and consumer price inflation is likely to slow to 22.1%
• Migration is leading to a rise in remittances, with the continued digitization of the payments industry bringing cost efficiencies, security and convenience

The Mastercard Economics Institute released ‘Economic Outlook 2025’, its annual report identifying the themes that will shape next year’s economic landscape.

The global economy has managed through a series of shocks admirably over the past few years.

The report anticipates 2025 to be defined by shifts in monetary and fiscal policy and a move toward equilibrium rates for growth and inflation.

In Nigeria, the Mastercard Economics Institute projects 2.9% year over year GDP growth in 2025, slightly below than the global average which is forecast at 3.2.%, reflecting the challenges and opportunities within one of Africa’s largest economies.

Meanwhile, consumer spending in the country is predicted to rise by 6%, despite elevated consumer price inflation of 22.1%, which continues to present challenges for households and businesses.

Economic growth is driven by robust remittance inflows, which sustain household incomes and consumption. Nigeria’s economy demonstrates resilience amid global and regional shifts, leveraging its human capital and remittance ecosystem to navigate challenges.

“Nigeria’s economic outlook for 2025 highlights the country’s resilience and potential for growth, driven by remittance inflows and consumer spending. These trends underscore the importance of fostering financial inclusion and addressing inflationary pressures to support sustainable development,” said Khatija Haque, chief economist, EEMEA, Mastercard.

Folasade Femi-Lawal, country manager, Mastercard (West Africa)

Folasade Femi-Lawal, country manager and Area Business Head for West Africa shared, “Remittances play a pivotal role in driving economic resilience, and Mastercard Nigeria is committed to enhancing contactless payment solutions to simplify transactions, boost security, and reduce costs. Our efforts are aimed at fostering an inclusive financial ecosystem, ensuring seamless, secure payments that support Nigeria’s vibrant economy.”

Key findings from the Mastercard Economics Institute report include:

Pricing priorities

Consumers worldwide have been navigating a bumpy road of rising prices over the last five years, largely driven by the pandemic and geopolitical tensions. Inflation—the rate of increase in prices—remains a significant challenge for Nigeria, even as consumer price inflation is forecast to moderate to 22.1% in 2025 from over 33% in 2024. This reflects persistent pressures from currency volatility and supply chain disruptions.

Lagos (marina)

Despite these challenges, Nigeria’s consumer spending is projected to grow by 6%, driven by the country’s youthful population and robust informal economy. However, high inflation continues to influence purchasing behaviour, with households prioritizing essential goods and services over discretionary spending.

Migration and money

The last few years saw significant movement in people and, by extension, capital. While migration results in a loss of human capital, it also generates substantial remittances, which serve as a lifeline for low- and middle-income communities in developing economies.

According to the World Bank, global remittances surged from $128 billion in 2000 to $857 billion in 2023, with an estimated growth of 3% in 2024 and 2025.

Economic recovery and local reforms are expected to sustain remittance growth through 2025, while the continued digitization of the payments industry allows recipients to shift to digital and mobile channels, resulting in considerable cost efficiencies, security and convenience.

In Nigeria, migration continues to shape the country’s economic landscape, contributing significantly to remittance inflows.

Nigeria passport

The rise of digital payments and mobile money solutions has further enhanced the efficiency and accessibility of remittances, reducing costs and ensuring secure, timely transactions.

These platforms are vital for Nigeria’s financial inclusion efforts, enabling underserved communities to access financial services and participate in the broader economy.

The ‘Economic Outlook 2025’ report draws on a multitude of public and proprietary data sets, including aggregated and anonymized Mastercard sales activity, as well as models that are intended to estimate economic activity.