Nigeria is already the biggest economy in Africa, ahead of countries like Egypt and South Africa, but there’s still a lot of room for growth. The “Giant of Africa” hasn’t grown overnight, though. The steep upward trend started in the 1970s when the country scaled up its oil production to become one of the largest oil exporters worldwide.
Indeed, the global crisis in the oil market during the 1980s shook its economy pretty hard, but the path forward was already paved. Today, Nigeria has much more than oil, as it has become a hotbed for technology, fintech, construction, and agriculture investments. Here’s what to expect from the Nigerian economy in 2025.
The Way Forward
The global oil crisis has taught Nigerians a bitter lesson: it’s unsafe to anchor the national economy to a single commodity, no matter how valuable. The necessity of diversifying its production became crystal clear after a decade of political and economic instability, and so it did. Oil is still a sizeable part of the country’s GDP, but investments in sectors like manufacturing, services, and agriculture have risen considerably.
Arguably, the massive investment in technology infrastructure is the real game-changer here. After all, increasing the 5G coverage and other digital technologies directly impacts nearly every other sector, boosting productivity across several industries and creating new business opportunities for everyone. Nowadays, Nigeria is the largest 5G provider in Central and West Africa, having the third-largest 5G network in Africa.
Here’s a snapshot of 5G adoption in the region.
| Countries | 5G Adoption | Mobile Subscription |
| South Africa | 5,000,000 | 12,397,558 |
| Mauritius | 80,000 | 2,095,499 |
| Nigeria | 50,000 | 209,450,208 |
| Togo | 33,000 | 6,402,786 |
| Seychelles | 16,410 | 200,750 |
The importance of having fast and widely accessible internet for economic development can’t be overstated, and Nigeria has grown to become a tech hub in Africa. New business opportunities range from e-commerce and delivery services to iGaming, attracting major companies like Live88. Better jobs and a more skilled workforce are some of the byproducts of technology investments, fuelling economic growth.
Thanks to widespread internet and smartphone ownership, iGaming has become a massive industry in Nigeria. According to recent stats, about 60 million Nigerians engage with online games regularly, which turns the country into one of the largest markets in the region. Indeed, the revenue generated by iGaming companies in the country is, by no means, neglectable, and it’s set to reach over USD 10 billion in 2025.
More than an engaged gaming community, Nigeria also provides the infrastructure for live casino API businesses to thrive for instance. Still, this is only the fun side of the story, as digital technologies can do much more.
Digital Transformation
If it’s true that Nigeria is still behind in digital transformation compared to more developed markets, it’s also true that it already has groundbreaking effects in the country. For instance, digital transformation has created the perfect scenario for fintech companies to thrive. Fintech stands for financial technology, which implies the creation of innovative financial products, services, and even business models. It’s such a relief in a country where over 30% of the population doesn’t have access to the traditional banking system.
Fintech has democratized access to online payments and transactions, meaning a much larger clientele for internet-based businesses. The new industrial revolution, “Industry 4.0”, includes artificial intelligence, robotic automation, big data, and blockchain technologies. Fintech companies heavily rely on such technologies to automate banking services, risk assessment, insurance, trading, and investments.
The fintech sector has attracted over USD 550 million in venture capital investments in 2020, and figures continue to grow. There are many reasons for optimism here. For instance, when London established itself as a fintech hub in Europe in 2016, investments in the financial technology market spiked by 53%. In the United States, over 70% of trading decisions are backed by AI-powered systems, and a similar trend can be found in Nigeria, where the stock market already registered significant growth in recent years.
The improved technological infrastructure is also turning Nigeria more attractive for manufacturing industries. Indeed, the country has always been abundant in natural resources, but it lacked the structure to make the best out of them. Moreover, the increasing digitization of the country’s daily life has created a more skilled labor force, a mandatory feature for industrial development.
Indeed, the country’s infrastructure has come a long way in the past decades, but there’s still a lot to be done. The Federal Government has ensured a USD 2 billion investment in digital infrastructure for the next years, upgrading its cybersecurity systems and measures to protect people’s data privacy. It means more opportunities for companies and private investors to create innovative solutions on that end.
More importantly, the Nigerian population is young and tech-savvy: over 60% of Nigerians are 25 or younger. This means they are much more prone to adhere to innovations in the digital economy, both as consumers and investors, and they are creating new business models requiring considerably less capital.
Additionally, Industry 4.0 has major effects on one of Nigeria’s staples, agriculture, leading to the creation of a new term: Agriculture 4.0. As it turns out, digital technologies help to boost productivity, prevent problems in the supply chain, and increase food security, leading to much better business decisions and increased competitiveness on the global stage.
FAQ
How is 5G coverage in Nigeria compared to other African countries?
Nigeria is the largest 5G provider in Central and West Africa, having the third-largest 5G coverage in the continent.
What are the main sectors benefiting from digital transformation?
Nigeria has established itself as a local hub for fintech companies, but implementing a better digital infrastructure has also impacted telecommunications, cybersecurity, agriculture, and service industries.
What is the future of the digital economy in Nigeria?
It’s a great moment for investments in the country’s digital economy. Apart from technology infrastructure enhancements, Nigeria has a largely young population that is more enthusiastic about innovative technologies, creating a vast potential market for such products.
