The International Monetary Fund (IMF) has revised Nigeria’s economic growth outlook upward, projecting a 3.4% Gross Domestic Product (GDP) expansion for 2025 a 0.4 percentage point improvement from its earlier 3.0% forecast in April. This is according to the IMF’s July 2025 World Economic Outlook (WEO) Update, which reflects cautious optimism for Nigeria’s near-term economic performance despite prevailing macroeconomic headwinds.
According to the report, Nigeria’s economic resilience has been underpinned by stronger-than-expected growth in services and industrial sectors, along with a moderate easing in inflationary pressures. The Fund also maintained a 3.4% growth outlook through 2025, followed by a slightly slower 3.2% in 2026 still higher than April’s 2.7% projection.
“The upward revision reflects stronger global financial conditions, temporary easing of trade tensions, and improved capital flows to emerging markets like Nigeria,” the IMF noted.
This marks another sign of confidence in the Nigerian economy despite challenges such as exchange rate volatility, subsidy removal impact, and inflation pressures.
Nigeria Ahead of South Africa, But Below Regional Average
Nigeria’s upgraded growth forecast now positions it well ahead of South Africa, whose growth remains stagnant at 1.0% for 2025 and 1.3% in 2026. However, Nigeria still trails the Sub-Saharan Africa average, which is now expected to expand by 4.0% in 2025 and 4.3% in 2026, representing marginal upward adjustments of 0.2 and 0.1 percentage points, respectively.
“This regional divergence highlights the need for targeted structural reforms in Nigeria to fully unlock growth potential,” noted economic analyst Bismarck Rewane in a recent Arise News interview.
Global Outlook Brighter But With Caveats
The IMF projects global growth at 3.0% in 2025, up from its previous 2.8% estimate, citing front-loaded trade and investment activity ahead of anticipated tariff increases, especially between the U.S. and China.
It added that global headline inflation is projected to decline to 4.2% in 2025 and 3.6% in 2026. However, the IMF warned that the trade-fueled momentum could be short-lived, with growth potentially dipping once temporary trade advantages wear off in 2026.
“The forecast reflects a temporary improvement that might not sustain beyond 2025, especially if tariffs and inflationary pressures return in full force,” the report warned.
Domestic Fundamentals Strengthen Outlook
The IMF’s optimism mirrors recent data from Nigeria’s National Bureau of Statistics (NBS), which reported a 3.13% year-on-year real GDP growth in Q1 2025, up from 2.27% in Q1 2024. Nominal GDP also surged to ₦94.05 trillion in Q1 2025, compared to ₦79.51 trillion in the same period last year an 18.3% increase.
The growth was largely attributed to the service sector’s expansion and improved industrial activity, particularly with increased output in telecommunications, financial services, and manufacturing.
“Nigeria’s economy has shown resilience despite inflationary pressures and forex instability,” said Dr. Yemi Kale, former Statistician General of the NBS. “The rebasing of national accounts to 2019 base year gives a clearer and more accurate reflection of the economy’s structure.”
What This Means for Nigeria
The IMF’s upgraded forecast is a confidence booster for policymakers and investors alike, though experts caution that translating this into sustained growth will require deeper reforms.
“Sustainable growth demands more than favorable external conditions,” said Prof. Akpan Ekpo, former Director-General of the West African Institute for Financial and Economic Management. “Nigeria must address its infrastructure deficits, FX stability, insecurity, and governance challenges.”
Additionally, inflation and the naira’s exchange rate remain key concerns. With the Central Bank of Nigeria (CBN) tightening monetary policy and the fiscal authority exploring economic diversification strategies, how the government balances reforms and stability will determine the durability of this momentum.
Bottom Line
While the IMF’s revision is encouraging, experts agree that Nigeria must now shift focus from cyclical gains to long-term structural transformation. Reforms in tax collection, energy, FX management, and security are seen as critical to achieving inclusive and sustainable growth.
