By Peter Salami
The International Monetary Fund (IMF) has revised Nigeria’s economic outlook upward, projecting sustained expansion driven by improved investor confidence, stronger oil output, and continuing reforms under the Tinubu administration.
At a news conference in Washington yesterday to present the Global Financial Stability Report, the IMF’s Chief of Research Department, Deniz Igan, said Nigeria’s Gross Domestic Product (GDP) is now expected to grow by 3.9 per cent in 2025 and 4.2 per cent in 2026, up by 0.5 and 0.9 percentage points respectively from earlier projections.
She explained that the 2024 growth forecast was also upgraded to 4.1 per cent, reflecting the country’s recent GDP rebasing, which provides broader coverage of economic activities, including the informal sector.
According to Igan, the improved projections stem from “reduced uncertainty, exchange rate appreciation since July, rising investor confidence, a supportive fiscal stance, and higher oil production amid improved security conditions.”
“These developments have contributed to stronger hydrocarbon growth and overall economic resilience,” she said.
The IMF said the revised forecast signals renewed optimism for Africa’s largest economy as reforms aimed at stabilising the macroeconomic environment, attracting investments, and diversifying revenue sources continue to take root.
“For Sub-Saharan Africa, we have upgraded growth projections,” Igan added. “Growth for 2025 and 2026 has been revised up by 0.2 percentage points. We now project 4.1 per cent growth this year and 4.4 per cent next year.”
She noted that the region’s resilience is supported by reform efforts in major economies such as Ethiopia and Nigeria. However, she cautioned that “resource-dependent and conflict-affected countries continue to face significant headwinds,” urging African governments to strengthen institutions, deepen reforms, and improve revenue mobilisation through tax reforms.
“Improving debt management, transparency, and governance, alongside broader structural reforms, will be key to unlocking the region’s economic potential,” she said.
Also speaking, the IMF’s Assistant Director in the Global Markets Analysis Division, Jason Wu, commended Nigeria’s ongoing reforms, particularly in exchange rate flexibility and fiscal transparency, describing them as “steps in the right direction toward restoring macroeconomic stability.”
He noted that the recent depreciation of the naira should not be seen as entirely negative, arguing that “a more flexible exchange rate helps restore equilibrium in the economy.”
“A depreciating exchange rate is not necessarily a bad thing; it may actually be a good thing in order to restore balance,” Wu said. “We have indeed seen many steps in Nigeria to strengthen policy frameworks, especially on the monetary side, and we generally recommend moving towards more flexibility.”
Wu observed that Nigeria’s efforts to boost revenue collection and enhance transparency in managing foreign exchange reserves were already yielding results.
“Revenue collection has strengthened in Nigeria, and transparency in terms of FX reserve positions has improved,” he said. “I think all of these have contributed to lowering inflation from more than 30 per cent last year to 23 per cent this year, while improving FX reserve positions.”
According to him, the overall direction of Nigeria’s economy now appears positive, with stronger fundamentals emerging under the government’s reform agenda.
While acknowledging Sub-Saharan Africa’s resilience, Wu warned that the region still faces potential vulnerabilities from global capital flow reversals and financial tightening.
“To safeguard these gains, African countries, including Nigeria, need to sustain fiscal discipline, deepen structural reforms, and strengthen debt management frameworks,” he said.