IMF raises Nigeria's 2025 growth forecast to 3.9%, projects 4.2% in 2026

By Seun Ibiyemi

The International Monetary Fund (IMF) has upgraded its economic growth forecast for Nigeria, projecting a 3.9 percent expansion in 2025 and 4.2 percent in 2026.

This revised outlook signals increased confidence in the country's reform-driven recovery.

The updated projections were announced on Tuesday during the launch of the World Economic Outlook (WEO) report at the ongoing World Bank-IMF Annual Meetings in Washington, D.C.

The latest forecast represents a significant 0.5 percentage point increase from the IMF's July 2025 projection of 3.4 percent growth for Nigeria.

The Fund attributed the improved outlook to a combination of supportive domestic factors, including higher oil production, rising investor confidence, and an anticipated supportive fiscal stance in 2026.

"Whereas growth in Nigeria is revised upward on account of supportive domestic factors many other economies see significant downward revisions due to changes in international trade and official aid," the IMF stated in the WEO report.

Nigeria's projected growth places it ahead of South Africa, whose 2025 forecast was marginally raised from 1.0 to 1.1 percent, though its 2026 projection was revised down from 1.3 to 1.2 percent.

The overall growth outlook for Sub-Saharan Africa also improved slightly, moving from 4.0 to 4.1 percent in 2025 and from 4.3 to 4.4 percent in 2026. Nigeria's forecast remains slightly below this regional average.

Economic analysts suggest the improved outlook is linked to Nigeria's ongoing fiscal reforms, increased crude oil output, and efforts to stabilize the foreign exchange rate and attract foreign investment.

Globally, the IMF expects economic growth to reach 3.2 percent in 2025, easing to 3.1 percent in 2026. While a modest improvement from the July 2025 update, this global forecast remains below pre-2024 projections due to ongoing policy shifts, trade tensions, and uncertainty.

While the revised forecast is a positive signal for Nigeria, the IMF cautioned that sustaining this momentum will require consistent policy implementation and macroeconomic stability. The Fund emphasized that the focus must remain on deepening reforms in fiscal management, oil sector efficiency, and non-oil diversification to ensure long-term economic resilience.