Nigeria has been left out of the International Monetary Fund’s (IMF) latest list of Africa’s fastest-growing economies, as nations like Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda continue to excel excellently in the continent in growth and fiscal stability.
According to the IMF’s Regional Economic Outlook for Sub-Saharan Africa, released on Thursday, these five countries are now ranked among the world’s fastest-expanding economies, driven by policy reforms, improved fiscal discipline, and investments in infrastructure and manufacturing.
IMF Highlights Africa’s Economic Bright Spots
The IMF’s African Department Director, Abebe Selassie, said during a press briefing that Sub-Saharan Africa’s growth is projected to stabilize at 4.1% in 2025, with a further pickup expected in 2026.
“Several countries in the region — Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda — are among the fastest-growing economies in the world,” Selassie said.
He explained that the strong performance of these economies stems from consistent macroeconomic reforms, better fiscal management, and enhanced governance structures that have boosted investor confidence.
🇳🇬 Nigeria’s Growth Improving, But Still Below Potential
Despite being Africa’s largest economy, Nigeria did not make the IMF’s list, even though its growth outlook was recently revised upward.
The IMF projects Nigeria’s GDP to grow by 3.9% in 2025, up from 3.4% earlier in the year. The growth upgrade is linked to higher oil output, improved investor sentiment, and supportive fiscal policies.
Data from Nigeria’s National Bureau of Statistics (NBS) shows that the country’s GDP grew by 4.23% year-on-year in Q2 2025, compared to 3.48% in Q2 2024 — signaling modest progress in key non-oil sectors and easing inflation pressures.
However, the IMF warned that Nigeria’s growth remains below potential, urging the government to strengthen electricity supply, expand non-oil revenue, and sustain structural reforms to unlock faster economic expansion.
⚠️ IMF Warns of Rising Financial Vulnerabilities
The IMF expressed concern that many African governments — including Nigeria — are increasingly relying on domestic bank borrowing to finance public spending.
Selassie cautioned that this trend could strain banking systems and increase financial stability risks if not properly managed.
“Governments have turned to domestic banks as access to external financing tightens. This has been a source of resilience but also poses vulnerabilities,” he said.
He added that public debt levels remain high across many African nations, urging stronger regulatory oversight and fiscal transparency to limit spillover effects on financial institutions.
— IMF Recommends Tax Reforms and Debt Transparency
To ensure sustainable growth, the IMF advised African governments to focus on two key priorities:
- Domestic Revenue Mobilisation – modernizing tax systems, digitalizing revenue collection, and eliminating wasteful tax expenditures.
- Debt Management Reforms – improving public financial transparency, publishing comprehensive debt data, and strengthening budget oversight.
Selassie emphasized that fiscal reforms must “build public trust in institutions and ensure equitable implementation.”
IMF Commends Nigeria’s Fiscal and Monetary Reforms
Meanwhile, IMF officials praised Nigeria’s ongoing policy reforms, describing them as “broadly positive” amid signs of declining inflation and greater FX market transparency.
Davide Furceri, Division Chief at the IMF’s Fiscal Affairs Department, said Nigeria’s neutral fiscal stance — where spending and taxes are balanced — supports efforts to control inflation without hurting growth.
“Nigeria has done quite a lot in recent years,” Furceri said. “Reforms have simplified tax codes, reduced business burdens, and cut wasteful spending. These are policies in the right direction.”
Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, also noted that Nigeria’s flexible exchange rate and tighter monetary policy have helped restore economic stability.
He described Nigeria’s exchange rate reforms as a “positive adjustment tool” that strengthens the economy’s resilience to external shocks.
According to IMF Assistant Director Jason Wu, Nigeria’s improved revenue collection and stronger FX reserve management have contributed to a decline in inflation — from over 30% last year to 23% this year.
Wu, however, warned that global financial turbulence, commodity price volatility, and capital flow risks still threaten Sub-Saharan Africa’s fragile recovery.
He urged governments to maintain fiscal discipline, diversify exports, and expand intra-African trade under frameworks like the African Continental Free Trade Area (AfCFTA).
While Nigeria’s economy is showing positive momentum, the IMF’s latest assessment indicates that it still lags behind Africa’s top performers such as Rwanda, Ethiopia, and Côte d’Ivoire.
Sustained macroeconomic reforms, infrastructure investment, and revenue diversification will be crucial for Nigeria to reclaim its place among Africa’s fastest-growing economies in the coming years.