The International Monetary Fund (IMF) has raised its economic growth projections for Nigeria, signaling cautious optimism for the West African nation’s near-term prospects. In its July 2025 World Economic Outlook (WEO) report, the IMF revised Nigeria’s GDP growth forecast to 3.4% for 2025, a 0.4 percentage point increase from its April estimate. The 2026 outlook was also adjusted upward to 3.2%, reflecting a 0.5 percentage point rise compared to earlier projections. These upgrades align with modestly improved global forecasts, with world economic growth now pegged at 3.0% for 2025 and 3.1% for 2026—a 0.2 and 0.1 percentage point increase, respectively, from April’s predictions.
Sub-Saharan Africa’s regional growth projections similarly saw upward revisions, climbing to 4.0% in 2025 and 4.3% in 2026. While this marks an improvement from prior estimates, IMF officials underscored that sustained progress hinges on urgent structural overhauls. “Growth is expected to be relatively stable in 2025 in sub-Saharan Africa before picking up in 2026,” the report noted, while cautioning that persistent challenges like infrastructure gaps and governance issues require immediate attention.
Deniz Igan, the IMF’s Research Department Division Chief, emphasized the need for reforms targeting regional trade integration, transportation infrastructure, and state-owned enterprises—particularly in energy and transport sectors. “These changes are critical pillars for renewing growth,” Igan stated, adding that fiscal reforms must prioritize equity to avoid exacerbating inequality or social tensions. She called for phasing out poorly designed tax exemptions, expanding progressive income taxes, and fostering public trust through transparent policymaking. “Sequencing measures carefully and protecting vulnerable groups is essential to ensure reforms gain broad support,” she explained, referencing the IMF’s October 2024 analysis on equitable fiscal strategies.
IMF Research Director Pierre-Olivier Gourinchas highlighted fiscal vulnerabilities, warning that high debt levels and deficits in many economies increase exposure to global financial volatility. He stressed that safeguarding central bank independence remains crucial for macroeconomic stability. “Undermining this independence risks destabilizing price controls and investor confidence,” Gourinchas said, advocating for prudent fiscal policies and enhanced international cooperation.
While the upgraded forecasts reflect resilience in Nigeria and parts of sub-Saharan Africa, the IMF’s repeated calls for reforms signal lingering structural risks. The institution’s dual focus on growth optimism and reform urgency underscores the delicate balance policymakers face in nurturing recovery while addressing systemic weaknesses.
