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. This upgrade is attributed 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 stabilize the foreign exchange market.
According to the IMF, the Nigerian authorities have made significant progress in improving macroeconomic stability and enhancing resilience. “Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows,” the IMF stated. The economy is expected to expand by 3.4 percent in 2025, supported by increased oil production, the coming onstream of a new domestic refinery, and continued strength in services.
The IMF also noted that growth in 2024 accelerated to 3.4 percent, driven primarily by higher hydrocarbon production and a vibrant services sector. However, agricultural output remained subdued due to persistent security challenges and declining productivity. 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, with year-on-year inflation dropping to 23.7 percent in April 2025, down from an annual average of 31 percent in 2024. The decline was driven by naira stabilization, 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.
Despite the positive outlook, the IMF warned of rising downside risks, including a further decline in oil prices or increase in financing costs, which could adversely affect growth, fiscal and external positions, undermine financial stability, and exacerbate exchange rate pressures. Insecurity was also flagged as a continuing threat to economic performance and food security, with any deterioration potentially dampening growth prospects and worsening already high levels of poverty and food insecurity.
