The International Monetary Fund has projected that Nigeria’s economy will grow by 3.4 per cent in 2025, following gains from key economic reforms and stronger investor confidence.
The IMF made the forecast in its Article IV consultation report on Wednesday , a regular assessment of a country’s economic health and policies.
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The fund said Nigeria’s growth is being driven by higher oil output, the expected start of a major domestic refinery, and strong performance in the services sector.
In April, the IMF had projected Nigeria’s economy would grow by 3 per cent in 2024, down from an earlier forecast of 3.2 per cent. But its latest assessment puts growth for the year at 3.4 per cent, up from 2.9 per cent in 2023.
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The IMF said recent reforms, including the removal of petrol subsidies, the end of central bank financing of the budget, and changes to the foreign exchange market have helped to improve macroeconomic stability.
“These reforms have boosted investor confidence,” the IMF said, noting Nigeria’s return to the Eurobond market and the resumption of foreign portfolio inflows.
Inflation is starting to ease.
The organisation said consumer prices rose by 23.7 per cent year-on-year in April 2025, down from an average of 31 per cent in 2024. This was helped by tighter monetary policy, better food supply, and a more stable naira.
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The naira has firmed following reforms in the FX market and the CBN support. Reserves rose in 2024, owing to a strong current account surplus and improved inflows.
Government revenue also increased, helped by naira depreciation, better tax collection and external grants, it said, noting thag these gains outweighed higher spending on interest payments and overheads.
But the IMF said poverty and food insecurity had worsened, and urged the government to speed up support for the most vulnerable.
“While the reform gains are encouraging, they have yet to benefit all Nigerians,” the IMF executive board said. It called for “agile policy making” to protect stability and reduce poverty.
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The fund warned that risks remain high. A fall in oil prices, rising borrowing costs, or worsening insecurity could affect growth, hurt public finances and weaken the exchange rate.
Over the medium term, growth is expected to stay around 3.5 per cent. The IMF said more investment is needed in agriculture, electricity, education and health to lift productivity and support inclusive growth.
It also welcomed the CBN’s tight policy stance, efforts to rebuild reserves and improve FX operations, and steps to strengthen financial oversight, including of fintech and crypto firms.
The IMF said Nigeria’s reform efforts had created a more stable outlook but warned that progress remained uneven, and further action was needed to make the economy more resilient.
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