…In its forecast, the IMF predicts Nigeria’s economy will grow 3.0%, a 0.2 percentage point drop from 3.4% in 2024, and a further 0.3 percentage point drop to 2.7 by 2026.
By C. Ike-Okoh
TUE APRIL 22 2025-theGBJournal| The International Monetary Fund (IMF) downgraded Nigeria’s growth forecast for 2026 in its latest economic outlook published on Tuesday, pointing to lower oil prices.
In its forecast, the IMF predicts Nigeria’s economy will grow 3.0%, a 0.2 percentage point drop from 3.4% in 2024, and a further 0.3 percentage point drop to 2.7 by 2026.
The figures are part of the IMF’s World Economic Outlook Reference Forecast, in which it forecast a slight decline of 4 percent in 2024 to 3.8 percent in 2025 for sub-Saharan Africa.
Nigeria’s growth downgrade for 2025 reflects the cooling global oil prices which has fallen far below Nigeria’s budget assumption of $75 per barrel as well as Nigeria’s plummeting crude oil production which has equally fallen far below target production assumption of 2.06 million barrels per day for 2025.
Brent crude is currently trading around $66.50 per barrel, $8.5 below the budget assumption while crude oil production (including condensates), according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data, declined for the second consecutive month, decreasing by 4.1% m/m to 1.60 mb/d in March(February: 1.67 mb/d), its lowest level since October 2024, and far below the Federal Government assumption.
Issues of pipeline vandalism and sub-optimal investments in the oil sector remains, further casting doubts even on the latest IMF growth forecast for the country.
Amidst the downgrades, Nigeria’s economy shows no signs of life. The latest monthly inflation figures released by the National Bureau of Statistics (NBS), showed headline inflation spiking by 105bps to 24.23% y/y in March (February: 23.18% y/y), bucking the slowdown trend from the prior two months since the CPI rebasing.
Meanwhile, ”in the near term, under the reference forecast, global growth is projected to fall from an estimated 3.3 percent in 2024 to 2.8 percent in 2025, before recovering to 3 percent in 2026,” the IMF said.
For the IMF, the downgrades are broad-based across countries and reflect in large part the direct effects of the new trade measures and their indirect effects through trade linkage spillovers, heightened uncertainty, and deteriorating sentiment.
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