IMF Raises Nigeria’s 2025 Growth Forecast to 3.9%

The International Monetary Fund (IMF) has raised Nigeria’s 2025 growth forecast to 3.9%, citing higher oil output, improved investor confidence, and a stronger fiscal position as key drivers of the projected expansion.

The updated figures, contained in the IMF’s latest World Economic Outlook titled ‘Global Economy in Flux, Prospects Remain Dim, released on Tuesday, reflects a 0.5 percentage point increase from its previous forecast and signals renewed optimism about the country’s medium-term economic prospects.

In July, the IMF revised Nigeria’s economic growth projection for 2025 upward to 3.4 per cent, a 0.4 percentage point increase from the 3.0 per cent forecast published in its April 2025 World Economic Outlook.

Speaking at the press conference to mark the launch of the report, the Chief of the IMF Research Department, Deniz Igan, said, “Yes, we have revised Nigeria’s growth outlook upwards. For 2025, we now project GDP growth at 3.9 per cent, which is 0.5 percentage points higher than our earlier forecast. We have also upgraded the 2026 growth projection by 0.9 percentage points to 4.2 per cent.

“In fact, the 2024 growth figure has also been revised upward to 4.1 per cent, which is 0.7 percentage points higher than previously estimated.

The upward revision for 2024 reflects the authorities’ GDP rebasing, which provides broader coverage of economic activities, including those in the informal sector that were previously under-represented.

“For 2025 and 2026, the improved outlook reflects reduced uncertainty and the limited impact of U.S. tariffs on Nigeria, given its relatively low exposure to those markets; the appreciation of the exchange rate since July and stronger financial conditions due to rising investor confidence, a supportive fiscal stance, and higher oil production under improved security conditions, which has led to stronger hydrocarbon growth. All these factors together contributed to the upward revisions in Nigeria’s medium-term growth forecast.”

While Nigeria’s growth has been reviewed upwards, growth for the sub-Saharan Africa region is expected to remain subdued, unchanged in 2025 from 4.1 per cent in 2024, before picking up to 4.4 per cent in 2026.

“This is an upward revision relative to the April 2025 WEO forecast by a cumulative 0.5 percentage point, but a downward revision of 0.1 percentage point compared with the October 2024 WEO.

“Whereas growth in Nigeria is revised upward on account of supportive domestic factors, including higher oil production, improved investor confidence, a supportive fiscal stance in 2026, and given its limited exposure to higher US tariffs, many other economies see significant downward revisions because of the Changing international trade and official aid landscape,” said a part of the report.

The upward review comes on the heels of Fitch Ratings affirming Nigeria’s Long-Term Foreign-Currency Issuer Default Rating at ‘B’, with a stable outlook. Fitch said the Central Bank of Nigeria remained central to the new rating, saying, “Nigeria’s ‘B’ rating is supported by its large economy, a relatively developed and liquid domestic debt market, large oil and gas reserves and an improved monetary and exchange rate policy framework.”

In the same week, the global index provider, FTSE Russell, in its September 2025 semi-annual country classification review for equities and fixed income, added Nigeria to the Watch List.

Explaining the addition to the watchlist, FTSE Russell said, “For possible reclassification from Unclassified to Frontier market status as the market meets the five FTSE Quality of Markets criteria required for attaining Frontier market status.”

Nigeria had been moved to the “Unclassified” category in September 2023 on the back of severe delays in foreign investors’ capital repatriation and FX transactions experienced by foreign investors as of that time.

Meanwhile, for the sub-Saharan Africa region, the IMF noted that many low-income countries in the region that have benefited from preferential access to the US market under the African Growth and Opportunity Act, which expired in September, are expected to have sizeable negative effects, particularly on Lesotho and Madagascar.

On the global stage, the IMF projected growth at 3.2 per cent this year and 3.1 per cent next year. The organisation hinged the current global outlook on the agility of the private sector, “which front-loaded imports in the first half of the year and speedily reorganised.

supply chains to redirect trade flows, the negotiation of trade deals between various countries and the US, and the overall restraint from the rest of the world, which by and large kept the trading system open.”

The Managing Director of the International Monetary Fund, Kristalina Georgieva, said that the world economy has proven more resilient than expected despite multiple shocks.

Speaking ahead of the WEO launch, the IMF’s Chief Economist, Pierre-Olivier Gourinchas, said, “Global growth is holding steady despite major policy shifts. The increase in tariffs and its effect have been smaller than expected so far. This is thanks to new trade deals, multiple exemptions, and the private sector’s agility in rerouting supply chains. As a result, global growth is now projected at 3.2 per cent this year and 3.1 per cent next year, only a modest downgrade from last October. Yet, beneath the steady surface, complex forces are at work. Easy financial conditions and a weaker dollar, fiscal stimulus in some major countries, and surging artificial intelligence investment are all shaping activity and inflation dynamics.”

Despite a steady first half, the outlook remains fragile, and risks remain tilted to the downside. The main risk is that tariffs may increase further from renewed and unresolved trade tensions, which, coupled with supply chain disruptions, could lower global output by 0.3 per cent next year.

“Risks remain tilted to the downside. The AI surge could trigger a sharp market correction if profit expectations do not materialise. Fiscal pressures are mounting across many countries and may interact with financial market fragilities to further raise borrowing costs and increase rollover risks. And institutional credibility, particularly central bank independence, faces growing political pressures that could de-anchor inflation expectations.

“Still, there are upside risks too. A faster resolution of trade tensions and associated reduction in uncertainty, as well as the potential for significant productivity gains from AI, could all give global growth a meaningful boost,” added Gourinchas.

The IMF went on to project that the combined effects of lower uncertainty, lower tariffs, and AI could raise global output by about one per cent in the near term, thus underscoring how policies that help restore confidence and predictability can improve growth prospects.

“Policies should aim to restore confidence and predictability, stabilise trade relations, reduce uncertainty, and rebuild physical space credibly. Monetary policies should remain independent yet transparent and tailored with a key objective to maintain price stability. Over the longer term, economies should invest in innovation, productivity, and multilateral cooperation, empowering private enterprise and favouring horizontal policies like education, infrastructure, and smart regulation over costly sectoral subsidies,” explained Gourinchas.