Nigeria Sets Ambitious Plan For 8% Economic Growth by 2028

News in brief:

-Nigeria has issued new economic projections targeting GDP growth rising from 4.6% in 2025 to 7.9% by 2028, driven mainly by non-oil activity.

-Economists say the targets are ambitious given persistent structural challenges, including power shortages, insecurity and weak manufacturing performance.

Nigeria has unveiled new medium-term economic forecasts projecting gross domestic product (GDP) growth to rise steadily from 2025 through 2028, with the government expecting a significant lift from non-oil sectors. Projections presented by the Ministry of Budget and Economic Planning indicate growth rising from 4.6% in 2025 to 4.7% in 2026, then advancing to 6% in 2027 and 7.9% in 2028.

Officials say the outlook reflects the impact of ongoing reforms introduced since President Bola Tinubu assumed office in 2023, along with more orthodox monetary policies adopted by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso.

Government officials state that tighter monetary conditions, changes to foreign exchange management and fiscal adjustments have begun to ease inflationary pressure and stabilise the naira, contributing to an improved credit rating outlook.

Structural Constraints Raise Questions on Feasibility

Despite the improved sentiment, analysts caution that the near-doubling of growth within three years faces considerable hurdles. Nigeria continues to grapple with unreliable electricity supply, poor transport and industrial infrastructure and security challenges that disrupt farming and trade in some regions.

Brendon Verster, senior economist at Oxford Economics Africa, said the long-term growth potential exists but warned that reaching the government’s upper-end target would be difficult. He noted that easing inflation and a firmer currency could support domestic demand, but global oil prices remain subdued.

Inflation, which slowed to 16.1% in October, is forecast to reach 18% in 2025 and close to 20% in 2027 and 2028, according to government figures. Crude oil output is projected to rise modestly to 2.06 million barrels per day in 2026 and 2.10 million barrels per day in 2027, compared with 1.64 million barrels per day in the third quarter.

Non-Oil Sector Expected to Dominate Output

The government’s outlook assumes a significant shift toward non-oil activity, with the sector expected to account for nearly 99% of total output by 2028, up from 89% in 2024. Current data revealed that the economy expanded by 4% year-over-year in the third quarter, slightly slower than the previous quarter but above expectations as the country absorbed weaker oil prices and higher trade-related costs.

However, experts say structural bottlenecks continue to limit the economy’s maximum pace. Joachim MacEbong, a senior analyst at Control Risks, said growth appears to be around 4% unless longstanding issues, such as insecurity, power shortages and regulatory uncertainty, are addressed.

Manufacturing Weakness Undermines Broader Gains

While telecommunications and real estate boosted services to become the fastest-growing segment in the third quarter, concerns persist about lagging manufacturing output. Yvonne Mhango, Africa economist at Bloomberg Economics, said manufacturing has expanded at less than 2% annually for the past three years, held back by weak electricity supply, high logistics costs and expensive borrowing. She added that without improvements in these areas, investment will remain subdued and overall growth will fall short of government projections.