The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow by 3.0% in 2025.
This is according to the IMF latest World Economic Outlook report released on Tuesday.
The new forecast represents a 0.2 percentage point reduction from the Fund’s previous projection of 3.2%.
According to the report: “For sub-Saharan Africa, growth is expected to decline slightly from 4.0% in 2024 to 3.8% in 2025, before recovering modestly to 4.2% in 2026.
“Among the larger economies, the growth forecast for Nigeria is revised downward by 0.2 percentage point for 2025 and 0.3 percentage point for 2026, owing to lower oil prices.”
The IMF also noted similar economic pressures affecting other major African economies: “In South Africa, the growth forecast is revised downward by 0.5 percentage point for 2025 and 0.3 percentage point for 2026, reflecting slowing momentum from a weaker-than-expected 2024 performance, deteriorating sentiment due to heightened uncertainty, intensification of protectionist policies, and a deeper slowdown in major economies.”
Analysis of the latest forecasts for Nigeria indicates that the West African nation’s gross domestic product (GDP) will grow faster than that of South Africa, estimated at 1 percent this year and 1.3 percent in 2026.
On April 9, crude oil price dropped to $59 for the first time since February 2021 — lower than Nigeria’s budget estimate of over $70.
Speaking at a news conference in Washington DC, Pierre-Olivier Gourinchas, chief economist and director of research department at the IMF, said the decline in oil prices is coming mostly from weaker global demand.
“So it’s the weakening of global activity that is driving the decline in prices,” he said.
“There’s been some increase in supply coming from OPEC plus countries, but broadly speaking, the decline is mostly coming from weaker demand.
”So that is going to play out in ways we’d expect: the commodity exporters are going to face lower export revenues from the decline in oil prices.”
He said this would weigh on their fiscal outlook, and on their growth.
Meanwhile, in a more drastic revision, the IMF also slashed South Sudan’s 2025 forecast: “South Sudan has a downward revision of 31.5 percentage points for 2025 due to delays in resuming oil production following damage to a key pipeline.”
