Nigeria has been notably absent from the International Monetary Fund’s (IMF) list of Africa’s fastest-growing economies, with countries such as Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda leading the continent’s growth trajectory. The IMF highlighted these nations as some of the fastest-expanding economies globally, crediting their growth to robust fiscal reforms, infrastructure investment, and improved policy management, according to Abebe Selassie, Director of the IMF’s African Department.
The IMF report, released during the Sub-Saharan Africa Regional Economic Outlook briefing, projects the region’s overall growth at 4.1% for 2025, with a modest improvement expected in 2026. Selassie acknowledged that while these economies are flourishing, global challenges like weaker commodity demand, softening prices, and tighter financial markets continue to test the resilience of the region. “Several countries, including Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda, are among the world’s fastest-growing economies,” he said, emphasizing the role of macroeconomic stability and reform efforts.
Despite missing the growth list, Nigeria’s economy shows signs of recovery. The IMF recently revised Nigeria’s 2025 growth forecast upward to 3.9%, citing higher oil production, improved investor confidence, and supportive fiscal policies. Similarly, the National Bureau of Statistics reported a 4.23% year-on-year GDP growth in Q2 2025, up from 3.48% in the same period last year, reflecting gains in both oil and non-oil sectors alongside easing inflationary pressures. However, the IMF warned that growth remains below potential, urging the government to deepen structural reforms and diversify revenue sources.
The IMF also expressed concern over rising financial vulnerabilities in Nigeria and other Sub-Saharan nations. With governments increasingly relying on domestic bank borrowing due to dwindling external financing, the so-called “sovereign-bank nexus” could strain banking sector stability. Selassie highlighted the need for robust debt management, fiscal discipline, and strengthened regulatory oversight to mitigate risks, noting that roughly half of public debt in some countries is held by domestic financial institutions.
On a positive note, IMF officials praised Nigeria’s recent fiscal and monetary reforms, describing them as “broadly positive.” Measures such as tax administration improvements, expenditure efficiency, and more flexible exchange rate policies have helped reduce inflation from over 30% to 23% and strengthen foreign exchange reserves. Nevertheless, the IMF urged continued policy discipline, enhanced structural reforms, and vigilant management of external shocks to sustain growth and financial stability in Nigeria and across Sub-Saharan Africa.
source: Punch