IMF Predicts New Position for Nigeria among Africa’s Biggest Economies in 2026
- IMF projects Nigeria to become Africa’s third-largest economy by 2026, ousting Algeria from the position
- Nigeria's GDP forecast expected to rise to $334 billion amid economic reforms
- International institutions optimistic about Nigeria's growth trajectory despite ongoing challenges
Nigeria is poised for a major economic comeback on the African continent, with the International Monetary Fund (IMF) projecting the country to rise to third place among Africa’s largest economies by 2026.
According to the IMF’s latest World Economic Outlook (October 2025 edition), Nigeria ranked as Africa’s fourth-largest economy in 2025 but is expected to climb one spot higher next year as economic reforms begin to yield results.
Source: Getty Images
Nigeria’s current standing in Africa
IMF data accessed through the Fund’s datamapper shows that Nigeria’s gross domestic product (GDP) at current prices stood at approximately $285 billion in 2025.
This placed Africa’s most populous nation behind South Africa, Egypt, and Algeria.
South Africa remained the continent’s largest economy with an estimated GDP of $426 billion, followed by Egypt at $349 billion, while Algeria ranked third with about $288 billion, narrowly ahead of Nigeria.
IMF projects Nigeria’s climb in 2026
The outlook changes significantly in 2026. The IMF forecasts Nigeria’s GDP to rise sharply to around $334 billion, allowing it to overtake Algeria, which is projected to post a GDP of $284 billion.
If realised, this growth would position Nigeria as Africa’s third-largest economy, behind South Africa, whose GDP is projected at $443 billion, and Egypt at $399 billion.
What’s driving Nigeria's expected rebound?
The IMF attributes Nigeria’s projected climb to a combination of structural and macroeconomic improvements.
Key among these are higher oil production, improved foreign-exchange liquidity, and the impact of ongoing economic reforms.
Recent policy moves such as the removal of petrol subsidies, exchange-rate liberalisation, and tighter fiscal adjustments are expected to strengthen investor confidence and support medium-term growth, even as the economy grapples with short-term inflationary pressures.
A shifting economic landscape
Nigeria’s position among Africa’s biggest economies has fluctuated in recent years, shaped by currency devaluations, GDP rebasing exercises, and broader macroeconomic headwinds affecting major African economies.
These shifts underline how exchange-rate dynamics and policy choices can significantly alter continental rankings, even when real economic activity remains robust.
Growth outlook gets boost
Beyond GDP rankings, international financial institutions are growing more optimistic about Nigeria’s growth trajectory.
On January 19, the IMF revised Nigeria’s 2026 economic growth forecast upward to 4.4 per cent, from an earlier estimate of 4.2 per cent.
Similarly, the World Bank, on January 13, raised its 2026 growth projection for Nigeria to 4.4 per cent, up from 3.7 per cent forecast in June 2025.
Looking ahead
While challenges such as inflation, exchange-rate volatility and cost-of-living pressures persist, the IMF’s projections suggest that Nigeria’s economy is regaining momentum.
Source: Twitter
If reforms are sustained and external conditions remain supportive, Africa’s largest population could soon reclaim a stronger economic position on the continent.
Rewane predicts weaker naira in 2026
Legit.ng earlier reported that the managing director of Financial Derivatives Company, Mr Bismarck Rewane, shared a cautious yet hopeful outlook for Nigeria’s economy in 2026.
He said the year would bring moderate global growth, pressure on the naira, rising public debt, and new investment opportunities in important sectors.
Speaking on Thursday, January 22, 2026, in Lagos at the Nigerian-British Chamber of Commerce (NBCC) January 2026 Economic Outlook event, Rewane explained that the global economy is expected to grow steadily in 2026.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
