.Forcasts 4.2% GDP expansion by 2026
The International Monetary Fund (IMF) has lauded Nigeria’s recent economic reforms, like Naira flexibility and fiscal transparency, in driving a positive outlook.
The Assistant Director in the IMF’s Global Markets Analysis Division, Jason Wu, gave the commendation at a news conference to unveil the Global Financial Stability Report in Washington on Tuesday.
Wu said that the steps were in the right direction towards restoring macroeconomic stability and strengthening investor confidence.
He said that the depreciation of the Naira should not necessarily be viewed negatively, adding that a more flexible exchange rate would help restore balance in the economy.
“A depreciating exchange rate is not necessarily a bad thing, it may actually be a good thing in order to restore equilibrium.
“We have, indeed, seen in Nigeria many steps to strengthen policy frameworks, such as on the monetary policy side, and we generally recommend moving towards more flexibility,” he said.
Wu said that Nigeria’s efforts to bolster revenue collection and enhance transparency in the management of foreign exchange reserves has begun to yield positive results.
“Revenue collection has strengthened in Nigeria, and transparency in terms of FX reserve positions has improved.
“I think all of these have contributed to lower inflation from more than 30 per cent last year to 23 per cent this year. They have also improved FX reserve positions,” he said.
He said that the overall direction of Nigeria’s economy appeared positive, with stronger fundamentals emerging under the ongoing policy reforms.
He said that while Sub-Saharan Africa had shown resilience, the region still faced significant challenges.
“Sub-Saharan Africa continues to face headwinds. While growth has been pretty strong during this period when financial conditions are easy and capital flows are resuming.
“It is possible that previous capital flow surges and retrenchment cycles could recur.
“When that happens, it exposes vulnerabilities, especially in economies dependent on foreign investments,” Wu said.
He said that to safeguard these gains, African countries including Nigeria, needed to sustain fiscal discipline, deepen structural reforms and strengthen debt management frameworks.
“It is important for countries to continue improving fundamentals on the fiscal and monetary policy side,” he said.
He said that the IMF’s latest assessment aligned with recent data showing improved investor sentiment toward Nigeria, following a series of reforms in exchange rate unification, monetary tightening, and fiscal transparency.
“It is all aimed at stabilising Africa’s largest economy,” he said.
Meanwhile, the International Monetary Fund (IMF), on Tuesday reviewed Nigeria’s economic growth outlook upward.
The IMF cited stronger investor confidence, improved oil production and a more stable macroeconomic environment.
The Chief of IMF Research Department, Deniz Igan, made this known at a news conference to unveil the Global Financial Stability Report in Washington on Tuesday.
She said that the fund projected Nigeria’s Gross Domestic Product (GDP) to grow by 3.9 per cent in 2025, an increase of 0.5 percentage point from its earlier forecast.
Igan said that the fund also upgraded the 2026 growth projection to 4.2 per cent, up by 0.9 percentage point, while the 2024 growth estimate had been adjusted to 4.1 per cent, 0.7 percentage point higher than previously estimated.
She said that the upward adjustment for 2024 reflected Nigeria’s recent GDP rebasing, which offers broader coverage of the economy, including previously underrepresented informal sector activities.
According to her, the 2025 and 2026 outlook reflect reduced uncertainty and the limited impact of U.S. tariffs on Nigeria, given its relatively low exposure to those markets.
Igan said that the IMF attributed brighter outlook to several key factors, including the appreciation of the exchange rate since July, rising investor confidence, a supportive fiscal stance, and higher oil production amid improved security conditions.
“These developments have contributed to stronger hydrocarbon growth and overall economic resilience,” she said.
According to her, the revised projections signal renewed optimism for Africa’s largest economy as it continues to carryout reforms aimed at stabilising the macroeconomic environment, attracting investments, and diversifying its revenue base.
“For Sub-Saharan Africa, we have upgraded growth projections.
“Growth for 2025 has been revised up by 0.2 percentage point, and the same applies to 2026.
“We now project 4.1 per cent growth this year and 4.4 per cent next year,” Igan said.
She said that the resilience across the region had been supported by macroeconomic stabilisation measures and ongoing reform efforts in several key economies notably Ethiopia and Nigeria.
Igan, however, said that vulnerabilities remained.
“Resource-dependent and conflict-affected countries continue to face significant headwinds, and our medium-term outlook indicates that low-income economies in the region are still grappling with a widening per capital income gap compared to advanced economies.
“In such an environment, it is crucial for countries to strengthen institutions, deepen structural reforms, and mobilise domestic revenue through effective tax reforms.
“Additionally, improving debt management, transparency and governance, alongside broader structural reforms, will be key to unlocking the region’s economic potential,” she said.
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