The International Monetary Fund has lowered its economic growth projection for Nigeria, citing falling oil prices as a primary factor behind the adjustment.

According to the IMF's April 2025 World Economic Outlook report published Tuesday, Nigeria's real GDP is now forecast to grow by 3.0 percent in 2025, down from the previous estimate of 3.2 percent. This revised figure also falls below the 3.4 percent growth estimated for 2024, with a further slowdown to 2.7 percent anticipated in 2026.

The IMF explained that the downgrade reflects how declining oil prices are affecting Nigeria's fiscal and external positions, emphasizing that energy exports continue to be the country's main source of foreign exchange and government revenue.

"For sub-Saharan Africa, growth is expected to decline slightly from 4 percent in 2024 to 3.8 percent in 2025 and recover modestly in 2026, lifting to 4.2 percent," the report stated. "Among the larger economies, the growth forecast in Nigeria is revised downward by 0.2 percentage point for 2025 and 0.3 percentage point for 2026, owing to lower oil prices."

While Nigeria is maintaining a current account surplus, its external position is expected to weaken in coming years. The IMF projects the country's current account balance will decrease from 9.1 percent of GDP in 2024 to 6.9 percent in 2025, dropping further to 5.2 percent in 2026.

The Central Bank of Nigeria recently reported a balance of payments surplus of $6.83 billion for 2024, driven by a goods trade surplus of $13.17 billion. However, these surpluses may not be sustainable according to the latest IMF projections.

Investment bank JP Morgan has warned that Nigeria could slip into a current account deficit if oil prices remain below the fiscal breakeven benchmark of $60 per barrel. Meanwhile, Fitch Ratings offered a more optimistic view, projecting that Nigeria's current account surplus will average 3.3 percent between 2025 and 2026, supported by improved refining capacity and ongoing energy sector reforms.

Regarding inflation, the IMF forecasts that Nigeria's headline inflation will average 26.5 percent in 2025—down from 33.2 percent in 2024—but could surge to 37.0 percent in 2026.

These projections follow the National Bureau of Statistics' rebasing of the Consumer Price Index in January 2025, which updated the base year from 2009 to 2024. After rebasing, inflation eased to 24.48 percent in January from 34.80 percent in December 2024, falling further to 23.18 percent in February before rising again to 24.23 percent in March.

The Central Bank of Nigeria maintained its Monetary Policy Rate at 27.5 percent in February to contain inflation, though it may need to implement further rate hikes as inflation and money supply increased in March 2025.

The IMF also highlighted concerns about weak income growth among Nigerians. It projects that Nigeria's real output per capita will grow by just 0.6 percent in 2025 and 0.3 percent in 2026, indicating limited improvements in living standards. These figures remain below the Sub-Saharan African average, underscoring the slow translation of economic growth into improved household incomes.​​​​​​​​​​​​​​​​