The International Monetary Fund (IMF) has projected a 3.4 percent expansion in Nigeria’s real Gross Domestic Product (GDP) for 2025, following the conclusion of its annual Article IV consultation with the country. The IMF announced the forecast in a statement on Wednesday, highlighting progress in macroeconomic reforms while cautioning about persistent vulnerabilities.
The Article IV consultation is a regular assessment of a country’s economic performance and policy framework by the IMF’s executive board. The latest review reflects cautious optimism about Nigeria’s economic trajectory amid ongoing reform efforts.
According to the IMF, Nigeria’s growth in 2024 reached 3.4 percent, mainly driven by increased hydrocarbon production and a robust services sector. However, agricultural output remained subdued due to security challenges and falling productivity.
The IMF expects the positive momentum to continue into 2025, supported by the start of operations at a new domestic refinery, higher oil production, and sustained performance in services. It projected that medium-term growth would remain around 3.5 percent, buoyed by domestic reforms despite an uncertain global environment.
“The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience,” the Fund stated. “The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit, and improved the functioning of the foreign exchange market.”
The IMF said investor confidence has improved, noting Nigeria’s successful re-entry into the Eurobond market and the resumption of portfolio inflows. However, it acknowledged that poverty and food insecurity have worsened, pushing the government to prioritize inclusive growth.
The report also highlighted positive trends in external reserves, foreign exchange market stability, and inflation. It noted that inflation dropped to 23.7 percent year-on-year in April 2025 from an annual average of 31 percent in 2024, based on the rebased Consumer Price Index released by the National Bureau of Statistics.
“Naira stabilization and improvements in food production brought inflation to 23.7 percent… Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices,” the IMF said.
On the fiscal front, the Fund said revenue gains from currency depreciation, improved administration, and higher grants helped offset rising interest payments and administrative costs, leading to improved fiscal performance in 2024.
Despite the progress, the IMF warned of growing risks. It said falling global oil prices or rising financing costs could negatively impact Nigeria’s economic stability. “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 IMF further cautioned that any deterioration in domestic security could derail growth and worsen food insecurity across the country.
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