The International Monetary Fund (IMF) has lowered its economic growth projection for Nigeria in 2025, citing declining oil prices as a major concern. According to its April 2025 World Economic Outlook released Tuesday, the IMF now expects Nigeria’s economy to expand by 3.0%, down from its previous estimate of 3.2%, and below the 3.4% growth recorded in 2024.
The IMF attributed the downward revision to the negative impact of falling oil prices on Nigeria’s fiscal and external accounts. With energy exports still the country’s primary source of revenue and foreign exchange, the Fund projects further slowing, with GDP growth expected to decline to 2.7% in 2026.
“For sub-Saharan Africa, growth is forecast to decline slightly from 4.0% in 2024 to 3.8% in 2025, before recovering to 4.2% in 2026,” the report said. “Among the larger economies, Nigeria’s growth forecast is revised downward by 0.2 percentage point for 2025 and 0.3 for 2026 due to lower oil prices.”
The IMF also flagged concerns over Nigeria’s external position. Despite recording a current account surplus of $6.83 billion in 2024—driven by a $13.17 billion trade surplus—the surplus is projected to narrow. The current account balance is expected to shrink to 6.9% of GDP in 2025 and 5.2% in 2026.
JP Morgan has warned that Nigeria risks slipping into a current account deficit if oil prices fall below the breakeven threshold of $60 per barrel. However, Fitch Ratings has a somewhat more optimistic view, forecasting a current account surplus averaging 3.3% between 2025 and 2026, supported by reforms and enhanced refining capacity.
On inflation, the IMF forecasts average headline inflation at 26.5% in 2025, down from 33.2% in 2024, but expects it to rise again to 37.0% in 2026. This comes after the National Bureau of Statistics rebased the Consumer Price Index in January 2025, which temporarily brought inflation down to 24.48% in January, before it edged up again to 24.23% by March.
Despite efforts by the Central Bank of Nigeria to curb inflation—including maintaining the Monetary Policy Rate at 27.5%—price pressures remain high. Rising inflation and an expanding money supply may force the Bank to consider further tightening.
The IMF also highlighted weak income growth as a persistent challenge. Nigeria’s real output per capita is projected to grow by just 0.6% in 2025 and 0.3% in 2026, trailing the sub-Saharan African average and underscoring the slow pace of improvement in household living standards.
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