Economists and experts have raised concerns over the International Monetary Fund (IMF)’s recent upward revision of Nigeria’s Gross Domestic Product (GDP) growth forecast, asserting that the projection is overly optimistic and fails to reflect the country’s current economic challenges.
On July 1, 2025, the IMF released its assessment following its Executive Board’s 2025 Article IV consultation with Nigeria, predicting a 3.4% expansion in the nation’s GDP for the year ahead. This marks a slight upward revision from the 3% forecast published earlier in April.
The IMF’s Article IV consultations are routine evaluations of a country’s economic performance, offering key policy recommendations and assessments. Despite the forecast, experts are sceptical about the realism of such projections, citing various factors that undermine the expected growth.
IMF Commends Nigeria’s Recent Reforms
The IMF’s report acknowledged several of Nigeria’s economic reforms, including the passage of four significant tax reform Bills signed by President Bola Ahmed Tinubu. These reforms aim to bolster revenue generation and expand fiscal space for development.
“The IMF commended the authorities for advancing the tax reform bill, a vital step towards enhancing revenue mobilisation and creating fiscal space for development spending while ensuring debt sustainability,” the report stated.
In addition to tax reforms, the IMF praised the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso for dismantling the country’s long-standing multiple exchange-rate regime and implementing a more market-driven “willing-buyer, willing-seller” framework.
The IMF noted that the policy shift in the foreign exchange market has brought about greater stability to the Naira, as evidenced by a significant reduction in the FX premium—now below 3%—and increased foreign exchange inflows to $6.9 billion in Q1 2025.
Inflation and Growth Concerns
While the IMF’s outlook reflects optimism, Nigerian economists are voicing concerns over underlying structural issues that may hinder sustained growth.
Dr. Marcel Okeke, an economist, called the IMF’s projection “unfounded and unrealistic,” pointing to the challenges posed by ongoing poverty and rising inflation rates in the country.
“How can a country with an increasing poverty rate project growth? With more Nigerians becoming poorer, how is this supposed to translate into higher GDP growth?” Okeke argued. He further noted the country’s oil output of 1.6 million barrels per day—below the 2.2 million barrel target set in the 2025 budget—and the declining prices of crude oil, which remain a critical source of government revenue.
As of the latest data, Brent Crude prices hovered around $68 per barrel, significantly lower than the $75 per barrel benchmark used in government projections. These factors, Okeke warned, may lead to fiscal shortfalls that contradict the IMF’s predictions.
High Public Debt and Inflation Remain Key Concerns
The current state of Nigeria’s public debt is also raising alarm. As of March 2025, the Debt Management Office (DMO) reported the national debt at a staggering N149 trillion, which further complicates the country’s economic recovery prospects.
With inflation at 22.97% and food prices continuing to rise, the country’s purchasing power is under severe strain. “In developed countries, inflation is typically low, around 1-3%. In Nigeria, it is still very high, eroding the purchasing power of the average citizen,” said Okeke.
Professor Ndubisi Nwokoma, an Economics expert, agreed with Okeke’s assessment, stating that the IMF’s projections often face revisions and questioned their accuracy in light of Nigeria’s ongoing challenges. “There is no clear sign of a drastic change. The bureaucracy, insecurity, and high inflation remain pressing issues that the IMF often overlooks,” Nwokoma added.
Support for IMF’s View: A Macro-Economic Perspective
Despite the critiques, some experts believe the IMF’s projections might still hold merit from a broader macroeconomic perspective. Dr. Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprises (CPPE), expressed cautious agreement with the IMF’s view, highlighting that while the reforms are taking effect at the macro level, they may not fully address the underlying social costs.
“The IMF’s focus is largely on macroeconomic variables, which do show some positive developments,” Yusuf stated. “The subsidy reforms, the foreign exchange market adjustments, and tax reforms are all vital steps in the right direction, but these alone cannot tackle Nigeria’s welfare challenges, such as poverty and low productivity.”
Economic Outlook: A Divided Opinion
While the IMF’s positive outlook provides hope for economic recovery, experts remain divided. For some, the economic reforms are commendable, but the lack of significant progress in key sectors—such as electricity, security, and public administration—continues to hold back Nigeria’s potential for a sustainable recovery.
