Welcome to the December 2024 edition of the Duplo Economic Digest! As we close out the year, this month’s newsletter reflects on the key financial and economic events that shaped 2024 and explore the trends and opportunities set to define 2025.
Nigeria Macroeconomic Recap
2025 is expected to look a little like 2024, with a little more intensity
Nigeria’s economy showed resilience in 2024, with a projected growth rate of 3.1%. This growth was primarily driven by a significant rebound in the oil sector, which expanded by 10.2% in Q2 compared to previous quarters. While the non-oil sector also contributed to growth, its pace was more modest at 2.8%. The services sector led the non-oil growth with a 3.8% increase, while agriculture struggled due to ongoing insecurity, recording a mere 1.4% growth. Despite these positive indicators, inflation remained a major concern, peaking at around 31.7% due to rising food and transportation costs. In 2025, Nigeria’s economic outlook is characterised by a commitment to stabilising the economy through fiscal and monetary policies, alongside structural reforms and social protection measures to foster sustainable growth and reduce poverty.
Dangote to begin crude oil production: The Dangote Refinery, having commenced initial production in January 2024, is poised for a significant operational ramp-up by early 2025. Targeting a processing capacity of 650,000 barrels per day (bpd) by the first quarter of 2025, the refinery projects an annual output of approximately 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tonnes of aviation fuel. This substantial production is expected to significantly reduce Nigeria’s dependence on imported refined petroleum products. The refinery’s contribution is anticipated to enhance fiscal sustainability through job creation and increased tax revenues while also improving the trade balance by boosting exports of refined products. Although the Dangote Refinery has faced challenges securing sufficient domestic crude oil supplies, it plans to mitigate this by commencing crude oil production from its Niger Delta assets in early 2025, with an initial target of approximately 20,000 bpd to stabilise feedstock supply.
Investment in Nigeria’s private sector remains cautiously optimistic: Nigeria’s private sector outlook remains cautiously optimistic, driven by abundant investment opportunities and a growing market, though challenges like economic instability and currency devaluation persist. Promising emerging sectors include the digital economy and renewable energy. Nigeria’s expanding digital economy, particularly sectors like food delivery, is attracting significant international investment. Despite challenges such as high food inflation, the industry is projected to more than double in value over the next eight years, signalling robust growth potential. Concurrently, there’s a growing focus on renewable energy investments, aligning with global sustainability trends and addressing local energy needs, offering opportunities for economic diversification and job creation.
FG doubles down on 2023 and 2024 efforts: While maintaining its focus on fiscal stability following the 2023 removal of petrol subsidies and currency devaluation, the Nigerian government is also expected to increase spending, partly through borrowing. This will be coupled with efforts to broaden the tax base and improve tax collection to support development and pro-poor spending. The Central Bank of Nigeria (CBN) is projected to maintain a tight monetary policy to combat inflation, which reached 32.7% as of November 2024. The CBN has affirmed its commitment to using all available tools to stabilise prices.
If disinflation and economic stability are sustained, a potential monetary policy easing is likely by mid-2025, with possible rate reductions of up to 400 basis points by year-end. Driven by improved security, increased oil production, and stronger consumer demand, GDP growth is projected at 3.3% for 2024, rising to an annual average of 3.7% between 2025 and 2027. This growth is also contingent on continued government efforts to address structural constraints, including investments in infrastructure and improvements to the business environment, to enhance productivity and competitiveness. Given that 63% of the population is affected by multidimensional poverty, policies focused on creating productive jobs and building human capital are expected to remain a priority in 2025. To mitigate the impact of economic challenges, particularly inflation, the government will likely continue enhancing social protection frameworks, including cash transfer programs and other support initiatives for vulnerable populations.
Finance Flashback
The Nigerian finance sector is expected to remain resilient through the economic storms.
The finance sector in Nigeria experienced significant growth in Q2 2024, expanding by a remarkable 28.8%. This surge was primarily driven by banks bolstering their capital bases to comply with new regulatory requirements set by the CBN. However, the sector faced challenges from rising interest rates, which were increased substantially to combat inflationary pressures. To combat rising inflation, the CBN raised interest rates six times in 2024, totalling an increase of 875 basis points. The fintech sector saw significant milestones, with companies like Moniepoint achieving ‘unicorn’ status after raising $110 million, reflecting robust growth and investor confidence.
As Nigeria approaches 2025, its financial sector, encompassing banks and other financial institutions, is poised to navigate a complex landscape shaped by regulatory changes, economic reforms, and evolving market dynamics. The CBN has mandated higher minimum capital thresholds for banks, requiring international banks to hold at least ₦500 billion in capital by March 2026. This directive aims to strengthen the financial system amid economic challenges, including currency devaluation and high inflation.
| Metric | Jan 2024 | Dec 2024 |
| GDP growth | 2.98% (Q1 2024) /2.54% (Q3 2024) | 3.46% (Q3 2024) |
| Inflation | 29.9% | 34.6% (November 2024) |
| Petrol prices | ₦668/litre | ₦1,065/litre |
Technological innovation is also playing a key role, with the CBN’s Payment System Vision 2025 aiming to drive cross-border payments, advance open banking, and expand the regulatory sandbox, fostering innovation within the banking sector to enhance financial inclusion and operational efficiency. Nigerian fintech companies, such as Moniepoint, have achieved significant milestones, with valuations exceeding $1 billion, addressing banking infrastructure challenges and planning expansion across Africa, contributing to the sector’s dynamism. Despite Fitch Ratings projecting a tough operating environment for Nigerian banks in 2025 due to high inflation and economic instability, banks are expected to maintain resilience through high interest rates, satisfactory loan growth, and strong efficiency.
NGX Performance
Cautious optimism all around
The Nigerian Stock Exchange (NGX) has exhibited dynamic performance in 2024, with significant trading volumes, fluctuating investor sentiment, and notable sector-specific trends. Despite local and global economic challenges, the NGX has demonstrated resilience. As of December 2024, the NGX All-Share Index (ASI) has surged by 31.34% year-to-date, positioning it as one of Africa’s top-performing exchanges. This growth is particularly impressive, given high inflation and foreign exchange market volatility. The index has climbed from 74,773.77 points at the start of the year to approximately 98,760.59 points by mid-December. In the first nine months of 2024, the NGX recorded a substantial trading volume of ₦3.968 trillion, a 46.4% increase from ₦2.712 trillion during the same period in 2023. Domestic investors have been the dominant force, accounting for 82.44% of total transactions, while foreign investors contributed approximately 17.56%. This trend signifies growing confidence among local investors despite the challenges posed by inflation and currency depreciation.
From January to November 2024, the NGX saw significant market capitalisation growth, rising by ₦18.2 trillion (approximately $24 billion) to close at ₦59.1 trillion. The All-Share Index (ASI) also experienced a notable 30.4% increase, reflecting strong performance driven by banks and other sectors responding to CBN regulatory changes and capital requirements. In 2025, the Nigerian stock market faces complex challenges and opportunities, suggesting cautious engagement from companies considering public listings. However, several factors will influence market dynamics and investor sentiment.
The initial public offering (IPO) market is projected to contract, with a negative compound annual growth rate (CAGR) of -6.05% between 2024 and 2025, resulting in a total IPO amount of approximately $2.33 billion by 2025. This cautious approach to public listings may stem from ongoing market volatility and broader economic uncertainties deterring potential issuers. Despite this projected IPO downturn, the NGX has demonstrated resilience. The anticipated listing of the Dangote Refinery and its associated fertiliser plant on the Nigerian Stock Exchange in the first quarter of 2025, with plans for a dual listing in London and Lagos, could attract substantial investor interest and boost market capitalisation.
FX Performance
The long road to stabilisation
Nigeria’s foreign exchange market has faced significant challenges throughout 2024, primarily marked by the depreciation of the Naira against major currencies. The average official exchange rate fluctuated, starting the year at approximately ₦1,386.5 per US dollar and closing December 2024 at around ₦1,545 per US dollar. Despite the CBN’s efforts to stabilise the currency and the federal government’s structural reforms, liquidity issues have persisted, contributing to the Naira’s depreciation.
As Nigeria approaches 2025, its foreign exchange (FX) market is anticipated to undergo significant developments shaped by economic policies, global market trends, and domestic economic activity. The CBN targets increased remittance inflows, aiming for $1 billion monthly by issuing diaspora bonds in the United States. This initiative seeks to leverage the naira to attract investments from Nigerians abroad, thereby enhancing FX liquidity. Analysts also project that Nigeria’s trade surplus will persist into early 2025, supported by a weakened naira that makes exports more competitive and sustained global demand for crude oil, which is expected to contribute to FX reserves positively.
The Nigerian government has forecasted an exchange rate of ₦1,400 to the U.S. dollar for the 2025 budget, stronger than the official closing rate of ₦1,534 as of 18 December., suggesting a naira appreciation or stabilisation expectation in the official market. Several factors are expected to influence naira movements, such as improved access to U.S. dollars and easing currency controls. These have been noted as positive changes that could attract foreign investment, potentially strengthening the naira. Global economic conditions, particularly fluctuations in global oil prices and economic conditions in major trading partners, will continue to impact Nigeria’s FX market dynamics. The naira may experience volatility in the short term due to ongoing economic adjustments and global market conditions. However, as reforms take hold and if the government’s projections materialise, there could be a trend towards stabilisation or appreciation in the medium term, especially in the official market.
Company Focus – DANGOTE REFINERY – One to watch in 2025
The poster child for pushing boundaries in Nigeria
The Dangote Refinery in Lekki, Nigeria, is a monumental project with a 650,000 barrel-per-day (bpd) refining capacity, making it the world’s largest single-train refinery. Officially launched in January 2024, it aims to transform Nigeria’s oil landscape by reducing reliance on imported refined petroleum products and enhancing its status as a regional energy hub. Since its launch, the refinery has achieved significant milestones. Shortly after commencing operations, it began producing various petroleum products, including diesel and aviation fuel. By mid-2024, it had started exporting Euro V diesel and producing naphtha for domestic use. The refinery began exporting diesel to international markets, including Europe and the Caribbean, signifying Nigeria’s export potential and enhancing foreign exchange earnings.
Despite these achievements, the refinery has faced challenges. Securing sufficient crude oil supplies from the Nigerian National Petroleum Company (NNPC) took a lot of work. This led to reliance on imported crude from countries like the U.S. and Brazil, exacerbated by disputes with international oil companies regarding pricing and supply agreements. Minor delays in ramping up production capacity also occurred due to regulatory approvals and logistical challenges, though these have been gradually resolved through government intervention and support. The refinery also faces competition from existing local refineries operating at low capacities and risks associated with fluctuating global oil prices.
To address these challenges, Dangote Group has implemented several strategies. Starting in early 2025, the group plans to begin crude oil production from its upstream assets in Oil Mining Leases (OMLs) 71 and 72 in the Niger Delta, enhancing self-sufficiency by providing a reliable feedstock. The company has also partnered with government bodies to secure favourable terms for crude purchases and streamline regulatory processes to stabilise supply chains and ensure consistent operations. Furthermore, Dangote Group is preparing for a public listing on the Nigerian Exchange Group (NGX) by early 2025 to raise capital for further expansion and operational improvements while also allowing public investment in this landmark project.
The year 2025 is pivotal for the Dangote Refinery for several reasons. By mid-2025, the refinery is expected to reach its full 650,000 bpd capacity, significantly enhancing its domestic and export output. The planned commencement of crude oil production at around 20,000 bpd will provide a crucial internal supply source, mitigating reliance on external imports. The anticipated NGX listing will provide financial backing and increase public interest and investment in Nigeria’s energy sector, potentially leading to greater transparency and accountability while fostering broader economic participation.
Africa Focus
Positive vibes all round
In 2024, Africa’s economy showed resilience, with real GDP growth projected to rise from 3.1% in 2023 to 3.7%, driven by infrastructure investments and diversified growth. East Africa led a robust recovery while oil-exporting and tourism-dependent economies faced slower growth due to global market dynamics and stabilising tourism numbers. Challenges like high debt, tight financing, and structural weaknesses persisted, necessitating fiscal reforms and sustainable development strategies to enhance economic stability and improve living standards across the continent.
Generally positive outlook: Africa’s economic outlook for 2025 reflects resilience amid challenges such as high debt levels, inflationary pressures, and geopolitical tensions. While the continent is projected to be the second-fastest-growing region globally after Asia, achieving sustained growth will require addressing governance issues, enhancing institutional capacities, and ensuring economic benefits reach the broader population. The economic outlook for Africa in 2025 is generally positive, with projections indicating an average growth rate of 4.3%, up from 3.7% in 2024. This growth will be driven by various factors, including regional dynamics, sectoral developments, and the implementation of strategic policies aimed at fostering economic resilience.
Food driving growth: Agriculture, focused on food security and export potential, is expected to remain a cornerstone of economic development. As countries transition to sustainable energy, investment in renewable energy technologies will likely increase significantly. The tech sector is poised for rapid growth amid accelerating digital transformation across industries. Post-pandemic tourism recovery is expected to benefit economies reliant on this sector, especially in North Africa.
East Africa in the lead: East Africa is projected to lead continental growth, with its GDP rising from 4.9% in 2024 to 5.7% in 2025, fueled by strong agricultural performance and increasing infrastructure investment. West Africa’s growth is anticipated to increase from 4.2% in 2024 to 4.4% in 2025, supported by recovering commodity prices and improved trade relations. North Africa is expected to experience growth from 3.6% to 4.2%, benefiting from a rebound in tourism and energy exports. Central Africa’s growth is forecast to improve from 4.1% to 4.7%, driven largely by rising demand for critical minerals. In contrast, Southern Africa is projected to see more modest growth, increasing slightly from 2.2% in 2024 to 2.7% in 2025, constrained by structural issues and persistent energy supply challenges.
Upcoming events in November
- Global trade review West Africa
April 24-25 2025
Lagos, Nigeria - Africa Tech Summit
12-13 February 2025
Nairobi, Kenya - Private Credit Africa
26 March 2025
Cape Town International Convention Centre
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2024 has brought its share of challenges, from forex fluctuations to economic shifts, but it has also shown the resilience and innovation of businesses across Nigeria. As we step into 2025, we do so with hope, determination, and the belief that brighter opportunities lie ahead
