IMF projects GDP rebound driven by higher oil output, forex reforms, and improved liquidity
Nigeria ranked as Africa’s fourth-largest economy in 2025 but is expected to climb to third place in 2026, according to projections by the International Monetary Fund (IMF).
Data from the IMF’s World Economic Outlook, October 2025 edition, accessed through the Fund’s datamapper, shows Nigeria’s gross domestic product at current prices stood at about $285 billion in 2025. This placed the country behind South Africa, Egypt, and Algeria.
South Africa retained its position as Africa’s largest economy with an estimated GDP of $426 billion, followed by Egypt at $349 billion. Algeria ranked third at $288 billion, narrowly ahead of Nigeria.
However, the IMF forecasts that Nigeria will overtake Algeria in 2026 as economic output rebounds, supported by increased oil production, improved foreign exchange liquidity, and the effects of ongoing macroeconomic reforms.
According to the Fund’s projections, Nigeria’s GDP is expected to rise to $334 billion in 2026, pushing it ahead of Algeria, whose output is projected at $284 billion. South Africa and Egypt are forecast to remain ahead, with GDP estimates of $443 billion and $399 billion respectively.
The IMF noted that recent policy changes, including the removal of petrol subsidies, exchange rate liberalisation, and fiscal adjustments, are expected to underpin medium-term growth, even as the economy grapples with short-term inflationary pressures.
Nigeria’s position among Africa’s largest economies has shifted repeatedly in recent years, influenced by currency devaluations, GDP rebasing exercises, and broader macroeconomic challenges across the continent.
In a related update, the IMF on January 19 revised its forecast for Nigeria’s economic growth rate in 2026 upward to 4.4 percent, from an earlier estimate of 4.2 percent.
Similarly, the World Bank on January 13 raised its 2026 growth projection for Nigeria to 4.4 percent, up from the 3.7 percent forecast released in June 2025.
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