IMF Upgrades Nigeria’s Growth Outlook on Stronger Oil Performance and Trade Resilience

The International Monetary Fund (IMF) has revised Nigeria’s economic growth forecast upward for 2025, citing stronger oil production, resilient trade activity, and improved macroeconomic stability as key factors driving optimism. According to the Fund’s latest assessment, Nigeria’s gross domestic product (GDP) is projected to grow by 3.9 percent in 2025, compared to earlier estimates of 3.3 percent, with growth expected to further accelerate to 4.2 percent in 2026.

The IMF attributed the positive revision to a combination of oil sector recovery and stronger non-oil activities, which together have bolstered Nigeria’s fiscal position and foreign exchange earnings. Improved security in oil-producing regions, better compliance with OPEC quotas, and increased investment in upstream operations have lifted crude output closer to the country’s potential production target. The result has been a notable improvement in export revenues and an uptick in government income from petroleum sales.

Beyond oil, the Fund highlighted the resilience of Nigeria’s trade sector, which has remained robust despite global economic uncertainty. Increased regional trade under the African Continental Free Trade Area (AfCFTA) and diversification in agricultural and manufactured exports have contributed to maintaining external balance. Nigeria’s currency reforms, the unification of exchange rates, and greater transparency in the foreign exchange market were also cited as steps that have improved investor confidence and reduced distortions in the economy.

According to IMF officials, Nigeria’s improved fiscal management and the Central Bank’s efforts to stabilize the naira have helped moderate inflationary pressures and strengthen overall macroeconomic fundamentals. The Fund noted that tighter monetary policy, along with measures to boost revenue collection, has created a more sustainable fiscal path, enhancing the country’s ability to withstand external shocks.

The IMF’s latest projection also incorporates the results of Nigeria’s GDP rebasing, which has captured a broader range of economic activities in sectors such as digital services, logistics, and manufacturing. This rebasing has provided a more accurate picture of the nation’s economic potential, leading to an upward revision of previous estimates.

In its assessment, the IMF emphasized that Nigeria’s recovery is being driven not only by oil gains but also by expanding service industries, agricultural output, and manufacturing growth. The ongoing reforms in the energy and power sectors, aimed at addressing infrastructure deficits and promoting private-sector investment, have also begun to yield positive outcomes.

However, the IMF warned that sustaining the current growth momentum will require continuous reform implementation and careful policy coordination. Inflation remains elevated, driven largely by high energy and food prices, while external risks such as global oil price volatility and geopolitical tensions continue to pose challenges. The Fund urged Nigerian authorities to maintain fiscal prudence, enhance public sector efficiency, and strengthen social safety nets to cushion vulnerable populations from inflationary shocks.

In addition, the IMF noted that improving productivity and fostering inclusive growth will depend on tackling structural issues, such as inadequate power supply, limited industrial capacity, and weak infrastructure. It also recommended that Nigeria intensify its efforts to diversify the economy away from oil dependence by promoting manufacturing, technology, and renewable energy industries.

On the external front, the Fund projected that Nigeria would maintain a trade surplus of around six percent of GDP in 2025, buoyed by rising crude oil exports and stable non-oil revenues. The country’s foreign reserves have also stabilized, supported by higher oil prices and better foreign exchange management. These gains, according to the IMF, reflect growing investor confidence and an improved perception of Nigeria’s risk profile in global financial markets.

The Fund’s report comes at a time when many African economies are facing mixed growth prospects due to sluggish global demand and currency volatility. Nigeria’s upward revision, therefore, stands out as a positive signal for the region, indicating that the country’s reform efforts are beginning to yield tangible results.

IMF Managing Director Kristalina Georgieva described Nigeria’s trajectory as encouraging, noting that the combination of structural reforms, monetary discipline, and fiscal adjustments is laying a foundation for sustained growth. She, however, emphasized the need for continuous reforms in revenue generation, public debt management, and the business environment to sustain the gains achieved so far.

Economic analysts have echoed the IMF’s optimism, saying the new projections are evidence that Nigeria’s reform agenda—particularly in exchange rate unification, energy sector restructuring, and trade facilitation—is working. They believe that consistent implementation of these policies could accelerate private investment and job creation, thereby deepening the country’s long-term economic stability.

Nonetheless, experts caution that the path to recovery remains fragile. Persistent inflation, limited access to credit for small and medium-sized enterprises, and security challenges in parts of the country could still undermine the growth outlook. The IMF stressed that consolidating gains will depend on Nigeria’s ability to maintain policy consistency, enhance governance, and ensure that reforms translate into improved living standards for citizens.

Overall, the IMF’s revised forecast signals renewed confidence in Nigeria’s economic direction. With oil output improving, trade remaining resilient, and macroeconomic reforms taking root, the country appears well positioned to achieve stronger, more inclusive growth in the coming years—provided that policy momentum is sustained and external risks are carefully managed.