IMF Upgrades Nigeria’s Economic Growth Forecast to 3.9%
Reflecting improved macroeconomic indicators, the International Monetary Fund (IMF) has revised Nigeria’s 2025 growth forecast up to 3.9% as reforms begin to yield results.
In its latest World Economic Outlook released during the IMF/World Bank Annual Meetings in Washington DC, the Fund now expects Nigeria’s economy to expand by 3.9% in 2025 and 4.2% in 2026.
These represent significant upward revisions of 0.5, and 0.9 percentage points, respectively, from its earlier forecasts.
The IMF attributed the improved outlook to a combination of factors, including a stronger exchange rate, better fiscal management, increased oil output, and enhanced security around key energy installations.
It also noted that investor sentiment and financial conditions have strengthened, while Nigeria’s limited trade exposure to recent U.S. tariffs has insulated it from external shocks.
Nigeria’s economy recorded a robust 4.2% year-on-year growth in Q2 2025, outperforming both CSL’s estimate of 3.9% and the Bloomberg consensus of 3.6%, according to the National Bureau of Statistics (NBS).
This represents a strong rebound from 3.1% in Q1, driven largely by significant improvements in the oil and agriculture sectors. The oil sector surged by 20.5% year-on-year, compared with just 1.9% in Q1, lifting overall industrial growth to 7.5% and offsetting mild weakness in manufacturing.
The expansion was supported by higher crude oil output, averaging 1.68 million barrels per day, up from 1.41 mbpd a year earlier amid tighter security measures that sharply reduced oil theft and pipeline vandalism to the lowest levels since 2009.
Meanwhile, the agriculture sector grew by 2.8%, rebounding from 0.1% in Q1, with notable recoveries in livestock (+1.6%) and fishing (+2.6%), which helped drive a 3.6% rise in non-oil GDP.
These gains underscore the economy’s resilience and the positive impact of targeted reforms on key productive sectors. Looking ahead, we project that Nigeria’s economy will grow by 3.6% year-on-year in Q3 2025, while maintaining our full-year growth forecast at 3.7%.
“This outlook is supported by expectations of continued recovery in the oil sector and a favourable base effect, which could result in oil sector growth of around 11.1% for the year”, CSL said in a commentary note.
However, recent signs of weaker oil production—down 3.09% month-on-month to 1.58 million barrels per day in September—alongside persistent structural bottlenecks, present downside risks to this projection.
The non-oil sector is expected to remain resilient, driven by steady performances in agriculture and ICT.
Notably, the government has recently intensified efforts to boost agricultural productivity, announcing plans to deploy 2,000 tractors and over 9,000 specialised farming tools to support farmers, enhance food production, and strengthen national food security. In summary,
Nigeria’s economic outlook for 2025 remains broadly positive, underpinned by stronger oil output, improving agricultural performance, and continued policy efforts to stabilise the macroeconomic environment.
Analysts said while short-term risks persist—particularly from fluctuating oil production and structural constraints—the overall growth trajectory suggests that the economy is gradually building resilience and diversification.
CSL Stockbrokers said sustained reforms aimed at improving infrastructure, enhancing security in oil-producing regions, and supporting key non-oil sectors such as agriculture and ICT will be critical to consolidating these gains and ensuring more inclusive, broad-based growth in the years ahead.
