The International Monetary Fund (IMF) has revised Nigeria’s 2025 GDP growth forecast upward to 3.40%, up from 3.0%, citing improved oil production, a resilient services sector, and progress on macroeconomic reforms. The update, released in the IMF’s July 2025 World Economic Outlook, marks a pivotal moment for Nigeria’s economic recovery and is fueling renewed optimism among investors and businesses.
The IMF also raised its projection for 2026 to 3.20%, up from 2.70%, reflecting growing confidence in the country’s reform trajectory. This revision follows the recent rebasing of Nigeria’s GDP and the release of Q1:2025 growth data, which showed a year-on-year expansion of 3.1%—a significant improvement from 2.3% in Q1:2024 under the new statistical series.
Analysts at Meristem Securities attribute the upgrade to tangible improvements across key sectors. “This growth revision is underpinned by stronger oil output, a more robust services sector, and meaningful macroeconomic reforms,” stated the firm in its latest weekly economic report.
Notably, crude oil production (including condensates) rose 10.9% year-on-year in H1:2025, averaging 1.70 million barrels per day. Meanwhile, the services sector expanded by 4.3% year-on-year, driven by double-digit growth in Financial & Insurance (+15.0%), Transportation (+14.1%), and ICT (+7.4%).
The IMF also highlighted the impact of increased local refining capacity, which has eased pressure on the foreign exchange market and reduced reliance on imported petroleum products.
Recent gains in price and currency stability have further strengthened Nigeria’s economic narrative. Headline inflation eased to 22.2% in June, the lowest level in six months and the third consecutive monthly decline. Monthly inflation remained below 2.0% throughout Q2—signaling improved price control after more than a year of volatility.
On the exchange rate front, the naira closed July at ₦1,533.55/$1.00, reflecting only a 0.1% depreciation year-to-date—a dramatic improvement over the 38.8% decline recorded in the same period in 2024.
Afrinvest Research noted that these developments “have created a more favorable environment for sustained growth and foreign capital inflows.”
With improved investor sentiment and stronger macroeconomic fundamentals, financial institutions may begin to ease lending conditions. United Capital Research projects that businesses could soon access credit at lower interest rates.
“Reduced country risk and potential credit rating upgrades could translate into lower borrowing costs,” the firm stated. “This would support entrepreneurship, housing finance, and expansion in key sectors like manufacturing and pharmaceuticals—especially if the naira continues to stabilize.”
Despite the positive outlook, analysts caution that structural challenges persist. Agriculture grew by just 0.1% in Q1:2025, largely due to a 16.7% contraction in the livestock sub-sector. Other risks include tight credit conditions, rising public debt, and global trade uncertainties.
However, United Capital believes Nigeria could achieve 4.1% or higher GDP growth in 2025 if critical reforms are sustained and key issues addressed: Resolving insecurity in food-producing regions, Reviving the power sector by clearing legacy debts, Accelerating reforms in oil and gas.
“If these steps are taken decisively, Nigeria can transition from recovery to sustained, inclusive growth,” the firm concluded.
Cowry Assets Management emphasized that Nigeria is not alone in benefiting from shifting global dynamics. “Softer global inflation, a weaker dollar, and modest global growth momentum are creating a favorable window for emerging markets,” they said. “But Nigeria must maintain reform momentum to attract and retain foreign investment.”
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