The International Monetary Fund (IMF) says its executive board has concluded the 2025 Article IV consultation with Nigeria, projecting a 3.4 percent expansion in the country’s real GDP for 2025.
The IMF Article IV consultation is a regular review of a country’s economic performance and policies, providing assessments and recommendations for improvement.
In April IMF projected Nigeria’s economy will grow by 3 percent this year, compared to the 3.2 per cent forecasted in October 2024.
In a statement on Wednesday, the IMF has forecasted that inflation would continue to fall in the medium term, citing sustained tight macroeconomic policies and an expected easing in retail fuel prices.
“The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience,” the IMF said.
“The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market.
“Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows. At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth.
“Growth accelerated to 3.4 percent in 2024, driven mainly by increased hydrocarbon output and a vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity.
“Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 31⁄2 percent, supported by domestic reform gains.
“Gross and net international reserves increased in 2024, with a strong current account surplus and improved portfolio inflows. Reforms to the fx market and foreign exchange interventions have brought stability to the naira.
“Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the backcasted rebased CPI index released by the Nigerian Bureau of Statistics. Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices.
“Fiscal performance improved in 2024. Revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending.
“Downside risks have increased with heightened global uncertainty.
“A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures.”
The IMF added that any deterioration in security could negatively impact growth and worsen food insecurity.