…Highlighting the Foundations of Nigeria’s Economic Strength at Home
By Emeka Anaeto, Business Editor; Babajide Komolafe, Economy Editor; and Emma Ujah, Abuja Bureau Chief
The International Monetary Fund (IMF) has upgraded its forecast for Nigeria’s economic growth to 3.9 percent, crediting this improvement to vigorous domestic economic activities, heightened investor confidence, and diminished effects from ongoing global trade frictions.
This new estimate marks a 0.5 percentage point rise from the IMF’s July 2025 projection and nearly a full percentage point increase compared to the April forecast.
In its October 2025 World Economic Outlook (WEO) report, titled “Global Economy in Flux,” the IMF anticipates Nigeria’s real Gross Domestic Product (GDP) to grow by 3.9 percent in 2025. While this reflects a slight deceleration from the 4.1 percent growth achieved in 2024, the economy is expected to rebound with a 4.2 percent expansion in 2026.
The Fund attributes Nigeria’s economic durability to a blend of higher crude oil output, more adaptable fiscal strategies, and a surge in investor optimism. The report highlights that reforms within the energy and financial sectors have begun to draw new capital investments, while adjustments in the exchange rate have enhanced transparency in the foreign exchange market.
Moreover, the IMF points out that Nigeria’s economy has largely been insulated from the adverse impacts of global tariff conflicts sparked by recent U.S. trade policies, which have dampened growth in many developed nations.
Despite these encouraging growth trends, inflation remains a significant concern. The IMF forecasts that average consumer price inflation in Nigeria will fall from 31.4 percent in 2024 to 23.0 percent in 2025, with a further decline to 22.0 percent projected for 2026.
Year-end inflation is expected to ease to 21 percent in 2025 and 18 percent in 2026, indicating a gradual easing of inflationary pressures despite ongoing rises in food and energy costs.
External Balances and Updated Statistical Frameworks
The current account surplus is projected to shrink from 6.8 percent of GDP in 2024 to 5.7 percent in 2025, and then to 3.6 percent in 2026, as increased import demand offsets gains from oil export earnings.
The IMF’s outlook incorporates a thorough revision of Nigeria’s national accounts, adopting 2019 as the new base year. This update captures previously underrepresented sectors such as the digital economy, informal agriculture, and artisanal refining, leading to a nominal GDP increase exceeding 40 percent.
While acknowledging these positive shifts, the IMF emphasizes the need for continued prudent fiscal and monetary management, stronger institutional frameworks, and accelerated reforms to ensure sustainable macroeconomic stability and inclusive growth.
At the WEO press conference, Denz Igan, Division Chief of the IMF’s Research Department, remarked on Nigeria’s growth prospects: “Our updated forecast for Nigeria’s 2025 growth is 3.9 percent, reflecting a 0.5 percentage point increase from our earlier estimate. The 2026 forecast has also been raised by 0.9 percentage points to 4.2 percent.
“The upward revision for 2024 to 4.1 percent, which is 0.7 percentage points higher than previous projections, largely stems from the authorities’ GDP rebasing exercise that broadens the scope of economic activities measured, including informal sectors that were previously excluded.
“Looking ahead to 2025 and 2026, the improved outlook is mainly driven by reduced uncertainties and Nigeria’s limited exposure to U.S. tariff measures, given its relatively modest integration into global trade networks. Since July, we have observed currency appreciation, stronger financial conditions supported by rising investor confidence, and a favorable fiscal environment.
“Additionally, the upward revision in the hydrocarbon sector’s growth reflects increased oil production and improved security in key producing regions. Collectively, these factors underpin a more optimistic economic forecast for Nigeria.”