Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has stated that the projected 2025 GDP growth rate of 4.6% falls short of the administration’s ambitions.
Instead, the government is aiming for a 7% annual GDP growth to significantly reduce poverty and drive economic transformation.
Speaking at the Arise/KPMG Budget Day on Monday, Edun expressed optimism about Nigeria’s economic trajectory, citing anticipated declines in inflation, improved macroeconomic stability, and a more favorable business environment.
“We projected growth at 4.6%, but I think that is not our ambition. Our ambition is to, as soon as possible, get to about 7% per annum GDP growth, because it is at that level that you begin to really lift people out of poverty,” Edun remarked.
The minister highlighted key drivers of growth, including stronger revenue performance, increased oil production as reflected in budget estimates, and savings from the removal of fuel subsidies. He also emphasized the importance of creating a conducive environment for private sector investment.
Private Sector as the Engine of Growth
Edun emphasized the pivotal role of the private sector in addressing Nigeria’s infrastructure deficit, which requires an estimated $100 billion in annual investment.
“It is not the government budget that will fund, for example, the infrastructure deficit. The plan, the commitment of Mr. President and his policy is to crowd the private sector,” he explained.
He further noted that recent Federal Executive Council (FEC) decisions have cleared bureaucratic hurdles, paving the way for private sector-led projects such as the Benin-Asaba Highway and Lagos-Abeokuta Road under public-private partnerships.
These initiatives aim to improve travel efficiency and productivity, with Edun citing a potential 75% reduction in travel time for key routes.
Strengthening the External Sector
On the external front, Edun highlighted positive developments, including a stable exchange rate, a trade surplus equivalent to 13% of GDP, and foreign reserves exceeding $40 billion.
- These achievements, he said, reflect the collaborative efforts of the Central Bank of Nigeria and other stakeholders.
- Edun also revealed adjustments to the budget’s funding structure, with a shift from 80% domestic funding to a more balanced mix of 40% domestic, 40% foreign, and 20% from other sources.
This approach, he explained, creates room for private sector access to financial markets, fostering greater investment opportunities.
What you should know
Looking ahead, the minister affirmed the government’s commitment to optimizing its balance sheet by leveraging public assets and encouraging joint ventures and public-private partnerships.
- In January, Edun had said the government has implemented critical reforms that have stabilized Nigeria’s economy and reclaimed 5% of the nation’s GDP that was previously lost to inefficiencies within the federal government and fiscal authorities.
- Speaking to Bloomberg during the World Economic Forum (WEF) in Davos, Edun noted that key reforms have been instrumental in achieving this milestone, particularly the removal of wasteful subsidies and the implementation of market-driven pricing mechanisms for petroleum products and foreign exchange.
He said a stable exchange rate, and greater fiscal transparency position Nigeria as ‘an attractive investment destination.
