The International Monetary Fund raised Nigeria’s 2025 growth estimate to 3.4% in its July outlook, a meaningful upgrade that reflects stronger oil output, a new domestic refinery and improving investor confidence as President Bola Tinubu’s administration presses ahead with difficult reforms. But while headline growth is trending the right way, Nigeria still faces high inflation, rising food insecurity and a poverty challenge that many analysts say will require sustained growth well above today’s pace. 

Key figures at a glance

• IMF 2025 GDP growth forecast (Nigeria): 3.4% (WEO July 2025 / Article IV).  
• Inflation (CPI): 23.7% y/y (April 2025, backcasted rebased CPI).  
• Oil production (2025 forecast): ~1.7 million barrels per day.  
• Nominal GDP projection (market prices): ₦320 trillion (2025 est.).  
• Poverty rate (most recent IMF/World Bank estimate cited by IMF): ~42% (2023).  

(Sources: IMF World Economic Outlook Update (July 2025) and the IMF Article IV summary and staff commentary). 

Why the IMF raised the bar- three concrete drivers

1. Stronger hydrocarbon output and a new domestic refinery. The IMF credits higher oil production and the coming on-line of a major private refinery with directly supporting headline growth and export receipts. These supply-side gains helped lift the 2025 forecast.  
2. Services sector resilience. Services have been the largest single contributor to recent output gains, cushioning the economy as agriculture and some parts of industry lag.  
3. Macroeconomic credibility from hard reforms. The government and Central Bank’s moves, ending large fuel subsidies, halting monetary financing of the state, and liberalizing the foreign-exchange market, have reduced distortions, narrowed the official/parallel FX gap and restored investor appetite (including a return to Eurobond markets). Those changes underpin improved portfolio flows and a healthier current-account picture.  

The numbers that complicate the narrative

Headlines about a 3.4% expansion hide hard realities. The IMF’s staff note that Nigeria’s growth is still modest in per-capita terms and that the country’s social indicators have not improved commensurately:

• Consumer price inflation remains in the 20%+ range and was 23.7% in April 2025 on the rebased CPI, a serious drag on real incomes.  
• The official fiscal accounts show revenue gains, but public interest payments and a still-elevated debt stock limit fiscal room for big spending expansions. The IMF flags the need for realistic budget assumptions as international oil prices remain volatile.  
• Most stark: poverty and food insecurity have worsened even as macro stability has improved, IMF staff put the 2023 poverty rate at about 42%, underscoring that growth gains are not yet translating into broad welfare improvements.  

The IMF’s prescription: pragmatic, targeted, urgent

The IMF’s July commentary is clear about what must follow the headline revision:

• Scale up targeted cash transfers. The Fund stresses that without a stronger social safety net, reforms will leave the most vulnerable worse off; scaling transfers is essential but constrained by data gaps and low financial-inclusion rates.  
• Make budgets realistic and shield priority spending. Given oil price volatility, the IMF calls for prudent budget assumptions, stronger expenditure management and dedicating savings from subsidy removal toward growth-enabling investments.  
• Keep monetary policy tight until disinflation is entrenched. The IMF endorsed the Central Bank’s tight stance while urging improved central-bank governance to anchor a sustainable disinflation path.  

The Fund also highlights structural bottlenecks, electricity, agricultural productivity, security, that constrain private investment and employment growth. 

The real risk: oil price volatility and budget assumptions

Nigeria’s 2025 budget was drafted on an oil price assumption materially higher than market reality. The IMF and global press warn the government to recalibrate fiscal plans to lower oil prices, scale up revenue collection, and preserve buffers against shocks. Even modest drops in oil receipts can quickly reopen financing gaps and force austerity that would undercut growth and social programs. 

Can growth double and should it?

Senior officials and some analysts say Nigeria must aim much higher. Finance Minister Wale Edun has publicly argued Nigeria needs to double growth within one to two years to make a dent in poverty and meet political promises, a steep ask that would require sustained 6%+ annual growth, higher investment, and faster agricultural and industrial productivity gains. Whether that scale of acceleration is realistic without major improvements in security, infrastructure and governance is the crucial policy question of 2025. 

What investors should watch now

• Oil receipts and Brent pricing: fiscal space depends on sustained oil revenues; watch monthly export and price data.  
• FX and reserves trajectory: a stable, credible FX policy underpins foreign inflows, IMF has welcomed recent progress but urges caution.  
• Implementation of tax reform and public investment plans: revenue mobilization and capital spending choices will determine medium-term growth capacity.  

A measured verdict

The IMF’s upgrade to 3.4% is welcome: it signals that hard policy choices can restore macro credibility and that structural levers (a domestic refinery, recovering oil output, thriving services) can lift activity. But credible policymaking must now pivot from stabilization to inclusion, scaling social protection, funding agriculture, unlocking private credit, and investing in electricity and transport. Otherwise, headline growth will remain a poor proxy for the wellbeing of Nigeria’s 200+ million citizens. 

For Interface Africa readers — the bottom line

Nigeria’s recent numbers tell a two-part story: stabilization and the return of investor confidence on one hand; stubborn inflation, food insecurity and entrenched poverty on the other. The IMF’s upgrading of the 2025 forecast is a useful validation of reforms so far but it must be the start, not the endpoint, of deeper structural change that turns recovery into shared prosperity.

Sources and further reading

• IMF, World Economic Outlook Update, July 2025.  
• IMF, IMF Staff Completes 2025 Article IV Mission with Nigeria (press release, July 2, 2025).  
• Reuters, Nigeria needs to recalibrate its budget for lower oil prices, says IMF (July 2, 2025).  
• IMF views piece, How Nigeria Can Unleash its Economic Potential (Axel Schimmelpfennig & Christian Ebeke, July 7, 2025).  
• Financial Times, editorial and analysis on Nigeria’s reforms and inflation dynamics (summer 2025).