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Experts disagree as IMF downgrades Nigeria’s 2025 GDP forecast - DAILY TRUST
By Philip Shimnom Clement
Experts have disagreed to the recent downgrade of the Nigeria’s Gross Domestic Outlook from 3.2 per cent to 3 per cent in 2025 by the International Monetary Fund (IMF).
The projection is a downgrade from the IMF’s estimate of 3.2 percent announced in October 2024, according to the Fund’s World Economic Outlook (WEO) report presented at the ongoing spring meetings on Washington DC.
The Bretton Woods organisation also expects Nigeria’s economic growth to further slowdown at 2.7 percent in 2026.
The estimates reflect a broader decline in global economic activities, following the announcement of tariffs by United States and countermeasures by trading partners, according to the IMF.
Meanwhile, Nigeria’s real per capita output is projected to rise by just 0.6% in 2025 and 0.3% in 2026, indicating minimal gains in individual income levels despite overall growth. This lags behind the Sub-Saharan Africa average and underscores continued inequality and weak household purchasing power.
What Experts are saying
Speaking on Daily Trust, lead economist for ECOWAS, Prof. Ken Ife, said contrary to the IMF’s projections, Nigeria’s economy would outperform up to 4 percent in 2025
He said: “I disagree with the IMF projections because they don’t understand our economy well. There are indices that reflect on GDP growth and Nigeria is doing well in that regard.
“These indices include household consumption, balance of payments and investments
“In terms of balance of payments, we posted positive balance of payments of $6.8 billion and our household and public consumption is set to increase if the tax reform bill is passed because of the amendments, some taxes will be removed and household consumption will increase
“Also in terms of investments, we are not seeing Foreign Direct Investments but we are also seeing portfolio investments. Also we are seeing domestic investments in the case of Dangote refinery which is now selling refined petroleum in Naira and saving us alot of forex,” he explained
Prof. Ife added that with the recent indices, Nigeria’s economy was poised for growth and exceed the projections by the IMF
In his own view, Dr. Oluseye Ajuwon, a lecturer at the African School of Economics, noted that the downgrade might not be only for Nigeria considering the current trade war initiated by American President Donald Trump.
According to him, “I don’t think the downgrade is only for Nigeria considering the trade wars currently happening between America and the world and Nigeria has its own fair share.
“We are seeing that the tariffs imposition including that of Nigerian goods will also impact the economy negatively including the exchange rates which has now increased to about N1,650 to $1.”
Asked if that will affect investments into Nigeria, he said, “I don’t think the forecast will have any impact again, other than what we have seen.”
Headline inflation to average at 26.5%
Checks by Daily Trust showed that the IMF had also projected that Nigeria’s headline inflation would average 26.5% in 2025, following a recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS).
The inflation rate, although down from 33.2% in 2024, is expected to spike again to 37.0% in 2026, according to the IMF
The IMF’s April 2025 World Economic Outlook (WEO) paints a cautious picture of Nigeria’s macroeconomic prospects amid reform-driven adjustments and external volatility.
Despite a temporary slowdown in inflation, the IMF warns that price stability remains elusive.
Data by the Central Bank of Nigeria shows that Nigeria recorded a Balance of Payments surplus of $6.83 billion in 2024, its first in three years. This was driven by a $17.22 billion surplus in the current and capital account, supported by a goods trade surplus of $13.17 billion.
However, the sustainability of this surplus is in question.
Similarly, JP Morgan has warned that prolonged oil prices below Nigeria’s fiscal breakeven of $60 per barrel could reverse the current account into a deficit.
In contrast, Fitch Ratings expects a moderate surplus averaging 3.3% of GDP over 2025–2026, supported by refinery projects by Dangote and energy reforms.
NBS report
In January 2025, the NBS updated the CPI base year from 2009 to 2024 to reflect more current household spending patterns.
As a result, inflation figures were recalibrated, with the January rate easing to 24.48% from 34.80% in December 2024.
The moderation continued in February, falling to 23.18%, before inching back up to 24.23% in March, indicating persistent cost-of-living pressures.
Food inflation—a major contributor—declined marginally in February but remains elevated. The Central Bank of Nigeria (CBN) has held its Monetary Policy Rate at 27.5%, signaling a cautious but firm stance in the face of inflationary risks.
Subsequently, in its recent statement, the IMF acknowledged Nigeria’s bold policy steps, including the removal of fuel subsidies, cessation of central bank deficit financing, and unification of exchange rates.
However, it emphasised the need for broader reforms to address structural inefficiencies, boost productivity, and reduce inflation over the long term.
Edun leads Nigeria’s delegation to IMF/World Bank Spring meetings
Meanwhile, Wale Edun, the Minister of Finance and Coordinating Minister of Economy, has led the Nigeria’s delegation to the 2025 International Monetary Fund (IMF) Spring Meeting holding in Washington DC.
The meeting holds from April 21 to April 26 in the US capital is being attended by delegations from 190 countries.
On the Nigeria’s delegation are Chief Executive Officers of financial institutions, representatives of the private sector, Civil Society Organisations, Non-Governmental Organisations and other stakeholders.
The meeting aimed at promoting global macroeconomics financial stability, along IMF’s long-standing mission would provide policy advice, surveillance of member countries’ economies, and financial assistance to countries facing balance-of-payments issues.
The meetings will focus on building a better balanced and more resilient world economy that can better withstand economic shocks and promote sustainable development.
The specific activities of the meeting also include analysing the world economy, holding bilateral consultations with member countries, and providing support to countries navigating economic challenges.
It will also discuss the global economic outlook, global financial stability, and poverty eradication
The meetings will also discuss the need for reforms to the global financial architecture to support developing countries as well as poverty eradication and inclusive economic growth
Other key area of discussion at the meeting is how to address the economic impacts of climate change on the nations.
Specifically, the IMF conducts economic surveillance, both at the national and global levels to monitor the health of its 190 member countries.
