IMF Raises Nigeria’s 2025 Growth Forecast to 3.9% Amid Oil Gains and Investor Confidence
The International Monetary Fund (IMF) has revised Nigeria’s 2025 economic growth forecast upward to 3.9%, citing a rebound in oil production, improved investor confidence, and a more supportive fiscal stance as the main drivers. The new projection, published in the IMF’s World Economic Outlook report released on Tuesday, represents a 0.5 percentage point increase from its earlier estimate and reflects growing optimism about Nigeria’s medium-term economic prospects.
According to Deniz Igan, Chief of the IMF’s Research Department, the Fund also upgraded Nigeria’s 2026 growth projection to 4.2%, alongside an upward revision for 2024 to 4.1%, following the country’s recent GDP rebasing. The rebasing expanded the coverage of Nigeria’s economy, capturing previously underrepresented informal sector activities. Igan explained that Nigeria’s improved growth outlook was largely influenced by the appreciation of the naira, improved security in oil-producing regions, and a steady rise in investor inflows since mid-2024.
The IMF report highlights that Nigeria’s limited exposure to U.S. tariffs, compared to other emerging markets, has cushioned its economy from global trade disruptions. The Fund noted that while Nigeria’s domestic conditions are improving, growth across Sub-Saharan Africa is expected to remain moderate at 4.1% in 2024 and 4.1% in 2025, before climbing to 4.4% in 2026. Many regional economies are still grappling with the effects of shrinking foreign aid and shifting global trade patterns.
The IMF’s upward revision comes on the heels of Fitch Ratings reaffirming Nigeria’s Long-Term Foreign-Currency Issuer Default Rating at ‘B’ with a stable outlook, underscoring stronger monetary policy reforms by the Central Bank of Nigeria. Similarly, FTSE Russell has placed Nigeria on its Watch List for potential reclassification to Frontier Market status, reflecting renewed international investor interest after earlier foreign exchange challenges that had led to the country’s downgrade in 2023.
Globally, the IMF expects the world economy to expand by 3.2% in 2025 and 3.1% in 2026, despite ongoing trade tensions and policy shifts. The Fund’s Managing Director, Kristalina Georgieva, praised the resilience of the global economy, noting that new trade deals, flexible supply chains, and innovation, particularly in artificial intelligence, are supporting global stability. However, the IMF cautioned that risks remain, with rising tariffs, fiscal pressures, and potential financial market corrections posing threats to global growth in the year ahead.
source: punch