IMF Raises Nigeria’s 2025 GDP Growth Forecast to 3.4%, Calls for Urgent Reforms in Sub-Saharan Africa
The International Monetary Fund (IMF) has revised Nigeria’s 2025 GDP growth projection upwards to 3.4%, a 0.4 percentage point increase from its earlier forecast. The 2026 projection was also raised to 3.2%, up from 2.7%, according to the Fund’s July 2025 update of its World Economic Outlook (WEO). The report, titled “Global Economy: Tenuous Resilience amid Persistent Uncertainty,” reflects cautious optimism in the face of economic challenges facing emerging markets.
In its assessment of the Sub-Saharan Africa (SSA) region, the IMF emphasized the urgent need for structural and institutional reforms to address persistent weaknesses. These include improving regional trade integration, reforming state-owned enterprises, and enhancing transport infrastructure. Deniz Igan, Division Chief of the IMF’s Research Department, underscored that such reforms are crucial to achieving sustainable and inclusive growth.
The IMF stressed the importance of equitable fiscal reforms to avoid worsening inequality. Specifically, the Fund advised removing inefficient tax exemptions, increasing the use of progressive income taxes, and improving governance transparency. The goal, according to Igan, is to boost revenue without triggering social unrest—particularly important in countries with high public debt and limited fiscal space.
Pierre-Olivier Gourinchas, Director of the IMF Research Department, highlighted the macroeconomic risks of high debt levels and budget deficits across several economies, including Nigeria. He warned that fiscal vulnerabilities make countries susceptible to abrupt financial market shifts. He also emphasized the necessity of maintaining central bank independence to ensure price stability and investor confidence.
Overall, the IMF’s revised forecast signals a positive economic outlook for Nigeria, but one that hinges heavily on continued reforms and responsible policy execution. The report serves as both an encouragement and a warning—growth is possible, but only with careful management of fiscal policy, public trust, and institutional stability.
Source: Leadership