The Centre for the Promotion of Private Enterprise (CPPE) has warned that the cost of living may rise despite Nigeria’s GDP growth in the third quarter of 2025.
This was contained in its latest policy brief, signed by CEO, Dr Muda Yusuf, made available to Nairametrics.
Nigeria’s GDP grew by 3.98% YoY in Q3 2025, slightly lower than the 4.3% posted in Q2, but still reflecting what CPPE described as a sustained consolidation of macroeconomic stability.
Drivers of growth
The think tank attributed the performance to improved exchange-rate stability, moderating inflation, stronger fiscal operations and rising investor confidence.
These gains, it said, have supported business activities across key sectors, particularly services, ICT, construction and finance.
However, CPPE warned that the social impact of reforms remains a significant challenge.
“Although disinflation is underway and some food and manufactured goods are easing in price, the cost-of-living crisis continues to weigh heavily on households,” the organisation noted, calling for urgent targeted interventions to protect vulnerable groups.
Structural reforms
CPPE urged the Federal Government to intensify structural reforms and accelerate targeted investments to secure stronger, more inclusive economic growth.
The organization said that while the economy is on a “gradual but steady recovery path,” long-standing structural constraints, particularly in agriculture, manufacturing, trade, and housing, continue to limit productivity, weaken competitiveness and heighten cost-of-living pressures for households.
“With continued reforms, targeted investments, and strengthened governance, Nigeria is well-positioned to deliver stronger economic outcomes in the months ahead,” the CPPE stated.
Sectoral highlights
- Services Sector: The services sector remained Nigeria’s primary growth engine, contributing 53% of total GDP, driven by digital adoption, financial inclusion and improved business sentiment.
- Agriculture: Agriculture recorded 3.79% growth, an improvement on Q2, but still constrained by insecurity, weak rural logistics, insufficient mechanisation and declining purchasing power.
- Manufacturing: Manufacturing grew by only 1.25%, one of the weakest sectoral performances, undermined by high energy and transport costs, expensive borrowing, reliance on imported inputs, and smuggling.
- ICT: The ICT sector expanded by 5.78%, sustaining its role as a key non-oil growth pillar despite a slight decline from the previous quarter.
- Real Estate: Real estate posted an extraordinary 89% nominal growth, driven by rising property values. But CPPE warns that the trend is worsening housing affordability in major cities.
- Financial Services: Financial services emerged as the fastest-growing sector with 19.63% growth, reflecting rising economic activity, improved fiscal flows and stronger financial-system confidence.
- Trade: Trade grew by 1.98%, still constrained by high import costs, weak demand and ongoing import-substitution measures.
Social sectors such as education (2.51%) and health (2.89%) showed limited progress, which CPPE attributed to chronic underfunding.
Sectors in decline
CPPE says the textile and apparel industry remained in recession, contracting by 2.41%, while the paper and pulp subsector fell by 1.07%.
The review also noted slower activity across crude petroleum, cement, transportation, rubber and plastics, and food and beverages.
Meanwhile, accelerated growth was observed in pharmaceuticals, construction, oil refining, entertainment, broadcasting, auto assembly and health services.
Key policy imperatives
To sustain growth and ease pressures on businesses and households, CPPE outlined several priority policy actions:
- Reduce structural bottlenecks: Improve electricity supply, lower logistics costs, enhance port efficiency and fast-track transport infrastructure.
- Mitigate the cost-of-living crisis: Implement targeted social support programmes and address sector-specific constraints in agriculture, transportation, energy and pharmaceuticals.
- Strengthen agricultural productivity: Improve security in farming regions, expand irrigation, upgrade rural roads and support mechanisation.
- Rebuild manufacturing competitiveness: Provide concessionary credit, curb smuggling, reduce import duties on industrial inputs and strengthen supply chains.
- Improve housing affordability: Reform land administration and deepen the mortgage finance system.
- Boost education and health: Increase funding and improve governance across social sectors.
- Enhance non-oil exports: Reduce production costs for exporters and improve logistics, certification and standards.
- Stabilise oil output: Improve security in oil-producing communities and incentivise investments in upstream and gas-based industries.
What you should know
In Q2 2025, NBS reported that Nigeria’s GDP grew by 4.23% year-on-year in real terms in the second quarter of 2025.
This marks a stronger performance than the 3.48% recorded in the corresponding period of 2024.
The report shows that aggregate GDP at basic prices stood at N100.73 trillion in nominal terms, compared with N84.48 trillion in Q2 2024, representing a nominal growth of 19.23% year-on-year.