Washington D.C., October 15, 2025 – In a resounding vote of confidence for Africa's largest economy, the International Monetary Fund (IMF) has sharply upgraded its growth projections for Nigeria, forecasting a robust 3.9 percent expansion in 2025 and 4.1 percent in 2026. This optimistic revision, unveiled in the latest World Economic Outlook (WEO) report during the ongoing IMF/World Bank Annual Meetings here, contrasts starkly with a darkening global picture, where overall growth is expected to dip amid rising trade barriers and geopolitical headwinds.
The upgrade represents a significant pivot from earlier estimates, which had pegged Nigeria's 2025 growth at just 3.1 percent. IMF analysts attribute this turnaround to a potent mix of domestic policy triumphs: surging oil production, bolstered investor sentiment, exchange rate steadiness, and deep-seated fiscal reforms. "Nigeria's trajectory is a testament to the power of homegrown strategies in navigating turbulent waters," said IMF Economic Counsellor Pierre-Olivier Gourinchas at a packed WEO press briefing on Tuesday.
Domestic Reforms Fuel Nigeria's Resilience
At the heart of Nigeria's revival lies a series of bold reforms spearheaded by President Bola Tinubu's administration since mid-2023. These include the unification of the foreign exchange market, which ended a crippling multiple-rate regime that had stifled investment; aggressive subsidy removals on fuel and electricity to free up fiscal space; and a pivot toward export-led growth. Oil production, the lifeblood of Nigeria's economy, has rebounded from a low of 1.38 million barrels per day (bpd) in late 2023 to an estimated 1.7 million bpd by the end of 2025, thanks to resolved pipeline vandalism and enhanced security in the Niger Delta.
Governor Olayemi Cardoso of the Central Bank of Nigeria (CBN), addressing the Intergovernmental Group of Twenty-Four (G-24) briefing on the sidelines of the meetings, hailed these changes as transformative. "The reforms have fully restructured the economy," Cardoso declared, his voice carrying the weight of recent successes. "We now have a more competitive currency and, for once, a positive balance of trade surplus expected to remain around six percent of GDP. The economy is witnessing a shift from import dependency to domestic production and export growth."
Cardoso's optimism is backed by hard data. Nigeria's foreign reserves have swelled to over $40 billion, providing a sturdy buffer against external shocks. The naira, once battered to 1,600 per dollar, has stabilized around 1,500, fostering investor confidence. Non-oil exports, including agriculture and manufacturing, surged 25 percent year-on-year in the first half of 2025, per CBN figures. Moreover, the ongoing rebasing of Nigeria's Gross Domestic Product (GDP)—last done in 2014—promises to inflate the economy's official size by up to 50 percent, aligning it better with current realities and unlocking more international financing.
These strides have insulated Nigeria from the global tariff wars ignited by U.S. President-elect Donald Trump's promised 60 percent levies on Chinese imports and 10-20 percent on others. "Nigeria’s limited exposure to higher US tariffs, stable foreign reserves, and the GDP rebasing all contribute to this positive outlook," Gourinchas explained, contrasting it with downward revisions for export-heavy peers like Vietnam and Mexico.
A Stark Global Contrast
While Nigeria shines, the WEO paints a sobering global canvas. Worldwide growth is projected to ease from 3.3 percent in 2024 to 3.2 percent in 2025 and a further 3.1 percent in 2026. Protectionist measures, from U.S. tariffs to Europe's carbon border taxes, are eroding the post-pandemic rebound. Fading fiscal stimuli and supply chain fractures add to the drag. "Whereas growth in Nigeria is revised upward on account of supportive domestic factors... many other economies see significant downward revisions because of the changing international trade and official aid landscape," Gourinchas noted.
Emerging and developing economies, as a bloc, will outpace the world at over 4.0 percent annually, driven by Asia's dynamism. Yet advanced economies languish at 1.5 percent, hampered by aging populations and tepid productivity. Inflation, a scourge until recently, is easing to 5.9 percent globally in 2025 from 6.8 percent last year, but downside risks loom from protectionism, Middle East conflicts, and labor shortages.
Sub-Saharan Africa emerges as a regional bright spot, with growth holding steady at 4.1 percent in 2025 before edging up to 4.4 percent in 2026. IMF Deputy Research Director Petya Koeva Brooks spotlighted Nigeria during a panel discussion: "Nigeria’s upward revision sets it apart as one of the region’s key bright spots." Other standouts include Ethiopia (6.2 percent) and Senegal (5.8 percent), fueled by infrastructure booms, while South Africa (1.8 percent) and Angola (2.5 percent) lag due to energy woes.
Policy Imperatives and Lingering Risks
The IMF's report is no unqualified cheer; it's a call to action. Governments must "maintain credible, transparent, and sustainable policies, rebuild fiscal buffers, and preserve central bank independence," the WEO urges. For Nigeria, this means sustaining anti-corruption drives and investing reform savings—estimated at 4 percent of GDP—in social safety nets to cushion the vulnerable.
Globally, short-term fixes like trade rerouting (e.g., Chinese firms relocating to Southeast Asia) offer temporary relief but risk "suboptimal reallocation of resources and technological decoupling," per the report. "The global economy has shown resilience to trade policy shocks, but the drag from shifting policies is becoming visible," it warns, projecting a 0.5 percentage point hit to long-term productivity from fragmentation.
Geopolitical flashpoints amplify uncertainties: Escalating U.S.-China tensions could spike energy prices, hurting Nigeria's oil-dependent budget. Climate shocks, from Sahel droughts to Delta floods, threaten agriculture, which employs 70 percent of Nigerians. Labor supply disruptions, including youth migration, add another layer.
Yet, Brooks struck a balanced tone: "Risks are tilted to the downside, but proactive policies can mitigate them. Nigeria's story shows what's possible."
Stakeholder Reactions and Forward Path
Reactions poured in swiftly. Tinubu, via a statement from Abuja, called the upgrade "validation of our Renewed Hope Agenda." Business tycoon Aliko Dangote tweeted: "From naira floats to oil flows—Nigeria's rising!" The Nigerian Labour Congress, however, cautioned: "Growth must translate to jobs and wages, not just numbers."
Internationally, U.S. Treasury Secretary Janet Yellen praised Nigeria's "model for EMDEs," while Chinese Vice Premier He Lifeng signaled deeper Belt and Road investments. At the G-24, Cardoso outlined next steps: Digital economy push via 5G rollout, green energy transition with 30GW solar by 2030, and AfCFTA integration to boost intra-African trade from 15 percent to 30 percent.
As the Annual Meetings wrap up, Nigeria's upgrade isn't just a forecast—it's a blueprint. In a world fracturing along trade lines, Africa's giant is proving that internal fortitude can defy external storms. With reserves fortified, exports diversified, and policies aligned, 2025 beckons as a year of promise. But as Gourinchas reminded: "Optimism must be matched by vigilance."
