Payment technology firm Mastercard has listed remittance inflow as one of the factors that would drive consumer spending in Nigeria up by about six per cent in 2025.
This was disclosed in its Mastercard Economics Institute’s 2025 Economic Outlook for Nigeria: Steering through Change.
The Mastercard Economics Institute’s annual report identifies the themes that will shape next year’s economic landscape and anticipates 2025 to be defined by shifts in monetary and fiscal policy and a move toward equilibrium rates for growth and inflation. The Economic Outlook 2025 report draws on a multitude of public and proprietary data sets, including aggregated and anonymised Mastercard sales activity, as well as models that are intended to estimate economic activity.
According to the report, Nigeria’s GDP is projected to grow by 2.9 per cent slightly below the global average, which is forecast at 3.2 per cent, reflecting the challenges and opportunities within one of Africa’s largest economies.
The report partly read, “Meanwhile, consumer spending in the country is predicted to rise by six per cent, despite elevated consumer price inflation of 22.1 per cent, which continues to present challenges for households and businesses.
“Economic growth is driven by robust remittance inflows, which sustain household incomes and consumption. Nigeria’s economy demonstrates resilience amid global and regional shifts, leveraging its human capital and remittance ecosystem to navigate challenges.”
It maintained that migration (popularly known as Japa) is leading to a rise in remittances, with the continued digitisation of the payments industry bringing cost efficiencies, security, and convenience.
In the statement accompanying the report, the chief economist, EEMEA, Mastercard, Khatija Haque, said, “Nigeria’s economic outlook for 2025 highlights the country’s resilience and potential for growth, driven by remittance inflows and consumer spending. These trends underscore the importance of fostering financial inclusion and addressing inflationary pressures to support sustainable development.”
Highlighting the role of remittance, Country Manager and Area Business Head for West Africa, Folasade Femi-Lawal, said, “Remittances play a pivotal role in driving economic resilience, and Mastercard Nigeria is committed to enhancing contactless payment solutions to simplify transactions, boost security, and reduce costs. Our efforts are aimed at fostering an inclusive financial ecosystem, ensuring seamless, secure payments that support Nigeria’s vibrant economy.”
Other key findings from the report include that consumers worldwide have been navigating a bumpy road of rising prices over the last five years, largely driven by the pandemic and geopolitical tensions. Inflation—the rate of increase in prices—remains a significant challenge for Nigeria, even as consumer price inflation is forecast to moderate to 22.1 per cent in 2025 from over 33 per cent in 2024. This reflects persistent pressures from currency volatility and supply chain disruptions.
Despite these challenges, Nigeria’s consumer spending is projected to grow by six per cent, driven by the country’s youthful population and robust informal economy. However, high inflation continues to influence purchasing behaviour, with households prioritising essential goods and services over discretionary spending.
The report further read, “The last few years saw significant movement in people and, by extension, capital. While migration results in a loss of human capital, it also generates substantial remittances, which serve as a lifeline for low- and middle-income communities in developing economies. According to the World Bank, global remittances surged from $128bn in 2000 to $857bn in 2023, with an estimated growth of three per cent in 2024 and 2025. Economic recovery and local reforms are expected to sustain remittance growth through 2025, while the continued digitisation of the payments industry allows recipients to shift to digital and mobile channels, resulting in considerable cost efficiencies, security, and convenience. In Nigeria, migration continues to shape the country’s economic landscape, contributing significantly to remittance inflows.
“The rise of digital payments and mobile money solutions has further enhanced the efficiency and accessibility of remittances, reduced costs, and ensured secure, timely transactions. These platforms are vital for Nigeria’s financial inclusion efforts, enabling underserved communities to access financial services and participate in the broader economy.”