The International Monetary Fund (IMF) has revised Nigeria’s 2025 GDP growth projection upward to 3.4 percent, slightly above the 3.2 percent recorded in 2024 and higher than its earlier estimate of 3 percent released in April.
The announcement follows the conclusion of the IMF Executive Board’s 2025 Article IV consultation with Nigeria—a routine assessment of a country’s economic performance and policy direction.
The IMF attributed the improved outlook to key structural reforms implemented by Nigerian authorities over the past two years, including the removal of fuel subsidies, cessation of monetary financing of fiscal deficits, and efforts to stabilise the foreign exchange market.
“The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience,” the IMF said in a statement issued on Wednesday. “Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows.”
Growth in 2024 accelerated to 3.4 percent, driven primarily by higher hydrocarbon production and a vibrant services sector, while agricultural output remained subdued due to persistent security challenges and declining productivity.
Looking ahead, the IMF expects the same growth rate of 3.4 percent in 2025, supported by increased oil production, the coming onstream of a new domestic refinery, and continued strength in services. Medium-term growth is projected to remain around 3.5 percent, underpinned by reform momentum despite a “complex and uncertain external environment.”
Inflation has also shown signs of easing. The fund noted that year-on-year inflation dropped to 23.7 percent in April 2025, down from an annual average of 31 percent in 2024, based on the Nigerian Bureau of Statistics’ rebased Consumer Price Index. The decline was driven by naira stabilisation, improved food production, and tight macroeconomic policies. Inflation is expected to fall further over the medium term, aided by an anticipated drop in retail fuel prices.
Nigeria’s external position also improved in 2024, with increased gross and net international reserves, a strong current account surplus, and greater portfolio inflows. Reforms in the foreign exchange market and targeted interventions helped stabilise the naira.
On the fiscal front, performance improved in 2024 as revenues were boosted by naira depreciation, improved revenue administration, and higher grants, which more than offset increased spending on interest payments and overheads.
However, the IMF warned of rising downside risks. “A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability, and exacerbate exchange rate pressures,” it said.
The Fund also flagged insecurity as a continuing threat to economic performance and food security. Any deterioration, it noted, could dampen growth prospects and worsen already high levels of poverty and food insecurity.
Boluwatife Enome
Follow us on:
