Nigeria Targets 7% GDP Growth to Combat Poverty and Drive Economic Transformation

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has set an ambitious target for the country’s economic growth, declaring that the projected 4.6% GDP growth rate for 2025 falls short of the administration’s broader vision. Instead, the government is pushing for a 7% annual GDP growth to effectively reduce poverty and accelerate economic transformation.

Speaking at the Arise/KPMG Budget Day on Monday, Edun expressed confidence in Nigeria’s economic trajectory, citing expected improvements in inflation control, macroeconomic stability, and a business-friendly environment.

“We projected growth at 4.6%, but 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 lift people out of poverty,” Edun stated.

The minister outlined key economic drivers, including stronger revenue performance, increased oil production in line with budget forecasts, and significant cost savings from the removal of fuel subsidies. He emphasized that fostering a robust investment climate for the private sector is crucial to achieving these goals.

Edun highlighted the critical role of private sector investment in addressing Nigeria’s infrastructure deficit, which requires an estimated $100 billion annually.

“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.

Recent decisions by the Federal Executive Council (FEC) have eliminated bureaucratic hurdles, paving the way for public-private partnership (PPP) projects, including the Benin-Asaba Highway and Lagos-Abeokuta Road. These initiatives aim to improve transportation efficiency and productivity, with projections indicating a potential 75% reduction in travel time on key routes.

On the international front, Edun pointed to positive economic indicators such as a stabilized exchange rate, a trade surplus equal to 13% of GDP, and foreign reserves exceeding $40 billion. He attributed these achievements to coordinated efforts between the Central Bank of Nigeria and key stakeholders.

The minister also announced a shift in Nigeria’s budget funding strategy, reducing reliance on domestic borrowing. Previously, 80% of budget funding came from domestic sources, but the new structure aims for a balanced mix: 40% domestic, 40% foreign, and 20% from alternative sources. This adjustment is designed to enhance private sector access to financial markets and attract greater investment.

Edun reaffirmed the government’s commitment to optimizing its balance sheet by leveraging public assets and expanding joint ventures and PPPs. He noted that recent reforms have already stabilized Nigeria’s economy and recovered 5% of GDP previously lost to inefficiencies within federal financial management.

During an earlier interview with Bloomberg at the World Economic Forum (WEF) in Davos, Edun highlighted the role of critical economic reforms, particularly the removal of wasteful subsidies and the adoption of market-driven pricing for petroleum products and foreign exchange. These measures, he said, have enhanced fiscal transparency and positioned Nigeria as an attractive destination for global investment.