Nigeria’s H1 2025 Economic Review and H2 Outlook: Bridging the Transition Gaps

Recent developments in the trade policy of the United States (US) have introduced uncertainty as a make-or-break factor for nations across the globe. The associated disruptions for most nations have generated significant shifts in economic trends, as prospects for a stable economy falter while market volatility heightens. The series of tariffs, threats, and negotiations has modified the trajectory of the international trade system, resulting in increased uncertainty. A previously endorsed pathway toward peace, which could have mitigated conflicts, now appears less feasible as international tensions escalate, thereby risking supply chains, reducing demand owing to higher prices, and impeding overall economic growth.

Recovering or growing economies remain vulnerable, and their capacity to continue expanding is continually tested. Nevertheless, each economy remains cautious and advances prudently in actions and reactions to sustain global trade, partnerships, and the associated benefits.

Global Geopolitics Flashpoints

The global economy has experienced numerous transformations following various political disturbances. It is crucial to recognise that macroeconomic factors are not the sole significant drivers of these global disruptions; there is also a strong correlation with political interests and defences. Global geopolitics has swiftly necessitated that many emerging and developing nations develop robust foundations to counteract increasing challenges.

In 2025, global institutions forecasted cautious economic growth, with GDP growth projected to be between 2.3% (World Bank) and 4.7% (Goldman Sachs). Inflation may ease, but the IMF’s 5.5% forecast shows ongoing risks. Monetary policy may shift with steady or easing interest rates, potentially bringing an end to the global tightening. Overall, 2025 appears stable, with resilient growth and gradual inflation and rate normalisation.

African Economic Flashpoints

In the first half of 2025, the African economy exhibited both vulnerabilities and resilience. Global disruptions, caused by geopolitical tensions, trade conflicts, immigration restrictions, and tariffs, heavily impacted key economies. Recovery efforts were hindered by political instability in the Sahel, energy challenges in South Africa, political/social discontent in Eastern Africa, and climate-related agricultural disruptions. Inflation averaged 13.8%.

Rising public debt remained a key area of concern for the economy, and currency depreciation burdened countries like Nigeria and Egypt. Conversely, for economies such as Ghana, the currency stood out as the best-performing in Africa, following the success of debt restructuring, firming commodity prices, reduced speculative activity in the foreign exchange market, and central bank liquidity interventions.

On a positive note, Inflation pressures moderated mainly across Africa, despite US global trade tariff threats amidst strong recovery in continent’s average GDP growth rate reached 3.9% at the end of 2025, driven by strong performances in the services, mining, construction and tourism, particularly in Central North Africa where economies such as Morocco saw a +19% tourism sector growth in H1 2025. Additionally, the AfCFTA is beginning to show early benefits, as tariff reductions and harmonised trade rules facilitated more cross-border trade among African countries in H1 2025