CPPE: Nigeria’s Q3 GDP Performance Reaffirms Gradual, Steady Economic Recovery

•Highlights positive impact of ongoing economic reforms

Dike Onwuamaeze

Centre for the Promotion of Private Enterprise (CPPE) has declared that Nigeria’s third quarter (Q3) Gross Domestic Product’s (GDP) performance reaffirmed that the Nigerian economy is on a gradual but steady recovery path.

The declaration by the Lagos-based firm followed Nigeria’s latest GDP report for the third quarter of 2025, which indicated that the economy grew by 3.98 per cent in real terms, but lower than the 4.3 per cent growth recorded in the second quarter.

It emphasised that the data confirmed that the economy remained firmly on a path of steady recovery and consolidation.

Chief Executive Officer of CPPE, Dr Muda Yusuf, made the assertions yesterday in the firm’s “Policy Brief on Nigeria 2025 Third Quarter GDP.”

Yusuf said the GDP performance highlighted the positive impact of ongoing economic reforms, especially in stabilising the foreign exchange market.

He stated, “Nigeria’s Q3 GDP performance reaffirms that the economy is on a gradual but steady recovery path, supported by improved macroeconomic stability, stronger investor sentiment, and resilience across key sectors such as services, ICT, financial services, chemical and pharmaceutical and construction.”

He added that the “Q3 performance highlights the positive impact of ongoing economic reforms, especially in stabilising the exchange rate, moderating inflation, improving fiscal conditions, and gradually restoring investor confidence.

“These macroeconomic gains have strengthened business sentiment and supported activity across key sectors of the economy.”

Yusuf, however, stated that despite improving fundamentals, “The cost-of-living crisis remains a concern. While disinflation is underway and prices of some food items and manufactured products are easing, the social outcomes of economic reforms continue to weigh on households.

“It is, therefore, imperative for policymaking to prioritise targeted interventions to address the uneasiness around the cost of living and ensure that GDP Growth and macroeconomic stability translate into real improvements in citizens’ welfare, particularly for vulnerable groups.”

He ascribed the sustained recovery recorded in Q3 to greater exchange rate stability resulting from FX market reforms, decelerating inflation, and improved investor confidence.

He said the developments demonstrated that “the government’s reform programme is beginning to generate tangible and measurable outcomes across the economy”.

Yusuf said the service sector maintained its position as the largest contributor to GDP, accounting for 53 per cent of total output.

According to him, the service sector’s continued resilience, which is supported by digital adoption, financial services expansion, and improved business confidence, remains central to the overall economic performance.

In his breakdown of the report, Yusuf said agriculture recorded moderate recovery amid structural constraints, while the manufacturing sector still remained fragile and under pressure.

He stated, “Agriculture grew by 3.79 percent, up from 2.82 per cent in Q2.

“Despite this modest improvement, insecurity in farming communities, weak rural logistics, limited mechanisation, and declining purchasing power continue to constrain full-scale recovery.

“Manufacturing expanded by 1.25 per cent, one of the weakest performances across major sectors due to persistent challenges that included high energy and logistics costs; costly borrowing conditions; dependence on imported industrial inputs and smuggling of competing products.

“These structural weaknesses continue to erode competitiveness and limit job creation.”

He also identified the ICT sector as a key non-oil growth anchor even with 5.78 per cent growth, which was slightly below its Q2 growth of 6.6 per cent.

“Nonetheless, the sector remains one of the economy’s strongest performers, driven by rapid digitalisation, e-commerce expansion, and increased technology adoption by households and businesses,” he said.

Yusuf stated that the financial services sector emerged the best-performing major economic sector, expanding by 19.63 percent, up from 6.13 percent in Q2.

“This reflects increased economic activity, stronger fiscal operations across all levels of government, and rising confidence in the financial system,” he said.

Yusuf also stated that the trade sector recorded slow and fragile recovery, with 1.98 per cent, up from 1.29 per cent in Q2.

He said the recovery was still limited at the social sector, as education and health grew by 2.51 per cent and 2.89 per cent, respectively.

“These modest gains reflect under-investment, underscoring the need for expanded public spending and stronger governance across social services,” he said, adding that the textile and apparel sector remain in recession and contracted by 2.41 per cent mainly due to high production costs and smuggling.

The paper and pulp sector also contracted by 1.07 percent, he said.

Yusuf said to consolidate the gains recorded in Q3 and unlock stronger, more inclusive growth would require policy interventions to reduce structural bottlenecks, mitigate the cost-of-living crisis, strengthen agricultural productivity and rebuild manufacturing competitiveness.

He said, “However, achieving higher, more inclusive, and sustainable growth will require tackling long-standing structural constraints, especially in agriculture, manufacturing, and trade.

“Targeted policies to ease cost-of-living pressures are crucial to making the reform process inclusive.

“With continued reforms, targeted investments, and strengthened governance, Nigeria is well-positioned to deliver stronger economic outcomes in the months ahead.”