"Nigeria grows when oil performs. Ghana and Kenya grow regardless. That's the difference between a resource trap and a real economy."
"Nigeria grew 4.2% this quarter. We're celebrating. Meanwhile, Ghana which just came out of a debt crisis, grew 6.3% and Kenya hit 5%, both without oil windfalls. That should tell you everything about where Nigeria actually stands."
West African economist, Lagos
THE GIST
Nigeria's economy grew 4.23% in Q2 2025, the fastest pace since the post-COVID bounce in 2021, driven by oil production recovering to levels not seen since 2020. Thirteen sectors expanded by more than 7%. Foreign reserves hit $43 billion, the highest in six years. Inflation dropped from a 28-year peak of 34.2% to 18%. The government is declaring victory.
But here's the context that changes everything:
Ghana grew 6.3% the same quarter. Kenya hit 5% neither experienced oil booms driving their numbers.
When Nigeria had oil windfalls in 2011-2014, growth averaged 7-8%. Now, with oil recovering, Nigeria can only manage 4.2%. Meanwhile, manufacturing shed nearly 19,000 jobs, minimum wage increases were eaten by inflation, and the sectors booming are extractives, not the diversification Nigeria has promised for decades.
WHY IT MATTERS:
đź’Ľ For Founders:
The good news: Coal mining grew 57%, rail transport 43%, road transport 24%. If you're in logistics, energy, or infrastructure supply chains, Nigeria's industrial sectors are expanding. Government is spending ₦700 billion on infrastructure. Position for contracts in transport, construction materials, energy services.
The uncomfortable news: Manufacturing is in crisis; port bottlenecks, $29 billion in annual losses from power failures, FX chaos. 18,935 manufacturing jobs lost this year. The Manufacturers Association of Nigeria says the sector is "on its last breath." If your business depends on imported inputs, stable power, or predictable FX, growth numbers don't reflect your reality.
The comparison: Ghana and Kenya are growing faster than Nigeria with less resource wealth. They're building on services, tech, and more stable policy environments. Nigeria is growing on oil, again.
đź’° For Investors:
The bull case: Foreign reserves are up to $43 billion the highest since 2019. Inflation has dropped from 34% to 18%. Both the IMF and World Bank have upgraded Nigeria’s outlook. Thirteen sectors are growing above 7%. If you’ve been waiting for macro stability before deploying capital, Nigeria’s starting to check the right boxes.
The bear case: Growth hit 4.2%. Ghana grew 6.3%. Kenya grew 5%, and neither depends on oil for growth. Nigeria’s problem isn’t resources; it’s structure. Port bottlenecks. $29 billion lost annually to poor power. Manufacturing on its last breath.
So yes, the numbers are rising. But without fixing what’s broken under the hood, Nigeria’s “recovery” may just be another oil-fueled illusion.
The pattern: Back in 2011–2014, when oil prices boomed, Nigeria grew 6.5–8% a year.
Now, in 2025, with oil output recovering and prices supportive, growth is just 4.2%.
The difference?
The economy is more fragile today than it was a decade ago, even with similar resource tailwinds. Infrastructure decay, FX volatility, and policy inertia have eroded the leverage oil once gave.
Reform momentum is real, but Nigeria’s sprinting in sand, while Ghana and Kenya are running on pavement.
🎯 For Professionals:
Wage reality check: Nigeria’s minimum wage jumped 83% this year from ₦30,000 to ₦70,000. Sounds transformative. But inflation peaked at 34% and still sits at 18%. Real wages? Barely moved. If you’re in finance, oil & gas, or tech, you’ve likely felt a bump. If you’re in manufacturing, services, or informal work, your paycheck is still chasing prices.
Sector reality: The 13 sectors growing above 7% are mostly extractives and transport. Coal mining, quarrying, oil & gas, rail. If you work in these industries, hiring and promotions are accelerating. If you're in manufacturing (which shed 18,935 jobs) or services (steady but not spectacular growth), this boom isn't landing in your sector.
The bigger picture: Ghana and Kenya are creating economies where professional services, tech, and diversified industries drive growth. Nigeria is still betting on what comes out of the ground. Career paths in Nigeria remain volatile, boom when oil booms, bust when oil busts. That’s not diversification.
That’s a resource trap.
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THE BIG PICTURE
Nigeria’s been here before, many times.
In 2011–2014, during the last oil boom, GDP grew 6.5–8% annually. Growth was broad-based: services, agriculture, manufacturing all contributed. Then oil prices crashed, and by 2016, Nigeria was in recession. The pattern is old: Oil up, Nigeria grows. Oil down, Nigeria contracts.
But something has changed.
Q2 2025’s 4.23% growth is Nigeria’s best since the post-COVID bounce, but far weaker than the 7–8% growth of a decade ago under similar oil tailwinds. The difference is that the economy is more structurally broken.
- $29 billion lost annually to power failures
- Port bottlenecks choking imports and supply chains
- FX scarcity making planning impossible
- 18,935 manufacturing jobs lost this year
Meanwhile, the neighborhood looks different:
- Ghana has a 6.3% growth no oil boom, just post-debt restructuring recovery
- Kenya has a 5% growth powered by agriculture, finance, and tech
- South Africa has 0.8% growth stuck in the same structural traps Nigeria knows too well
The uncomfortable truth:
Nigeria grows 4.2% with an oil boom.
Ghana grows 6.3% without oil dependency.
Kenya grows 5% building on services and agriculture.
Nigeria’s “advantage” ,oil , has become its curse.
The Finance Minister credits the current reforms: inflation down from 34% to 18%, reserves up to $43B. Those are wins. But they hide a deeper flaw, an economy built on extraction, not production.
Here what we think: When your best-performing sectors are coal (up 57%), oil & gas, and quarrying, you’re not building a modern economy. You’re just digging faster.
The real test:
- Can Nigeria sustain 4%+ growth when oil prices soften?
- Ghana and Kenya already have.
- Nigeria, in fifty years, never has. #sigh
THE BOTTOM LINE
Nigeria's economy is growing, 4.23%, fastest in years. Oil production recovered. Reserves are up. Inflation is down from crisis levels. These are real wins.
But Nigeria is growing slower than Ghana and Kenya despite being Africa's largest oil producer in the midst of a production recovery. That's the story.
The question isn't whether Nigeria can grow when oil performs. The question is: When will Nigeria build an economy that doesn't need oil to perform? Because Ghana and Kenya already have.
Watch what happens when oil prices shift again.
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RESOURCES đź“š
TOP 5 SUMMARY TABLE
| Rank | Sector | Growth Rate | What it Really Means |
| 1 | Coal Mining | 57.53% | Energy crisis driving demand for domestic alternative |
| 2 | Quarrying/Minerals | 45.86% | Infrastructure boom creating materials demand |
| 3 | Rail Transport & Pipelines | 43.08% | Moving extractive resources (oil, coal, minerals) |
| 4 | Water Transport | 27.90% | Export activity (shipping oil, minerals out) |
| 5 | Road Transport | 24.50% | General economic activity + logistics |
🔍 THE PATTERN IN THESE TOP 5:
What they ALL have in common:
- Extractive or extractive-adjacent - Mining, transporting what's mined, infrastructure for mining
- Resource-linked - Either pulling resources out of ground OR moving them to export
- Not value-added manufacturing - Not processing raw materials into finished goods
- Infrastructure-dependent - Growth tied to government spending, not private sector innovation
- Commodity-cycle vulnerable - Will contract when oil/mineral prices drop
SOURCES
- 1. National Bureau of Statistics (NBS) - Nigeria Q2 2025 GDP Report https://www.nigerianstat.gov.ng/elibrary/read/1241288
2. Ghana Statistical Service - Q2 2025 GDP Report
https://www.reuters.com/world/africa/ghanas-economy-grows-63-q2-2025-driven-by-services-sector-2025-09-10/
3. Kenya National Bureau of Statistics (KNBS) - Q2 2025 GDP Report
https://www.reuters.com/world/africa/kenyas-economy-grows-5-second-quarter-2025-2025-09-30/
4. Central Bank of Nigeria (CBN) / Trading Economics - Inflation & Historical GDP Data - (Inflation): https://www.cbn.gov.ng/rates/inflrates.html
- (Historical GDP): https://tradingeconomics.com/nigeria/gdp-growth-annual
- (Reserves): https://punchng.com/fx-reserves-hit-42bn-highest-in-six-years/
5. Manufacturers Association of Nigeria (MAN) / Business Day - Manufacturing Crisis Report https://punchng.com/manufacturing-sector-growth-stalls-amid-port-bottlenecks/
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