DESPITE the much touted economic reforms of the Bola Tinubu administration, International Monetary Fund (IMF) has downgraded Nigeria’s real gross domestic product (GDP) by 0.2 per cent from the 3.2 per cent it had forecast earlier.

The Bretton Woods institution says Nigeria’s economy will now grow by 3.0 per cent this year, citing lower oil prices as the reason for the downgrade.

It projected this in its April 2025 World Economic Outlook report released on Tuesday, April 22.

The latest projection is also below the 3.4 per cent growth estimated last year.

Nigeria’s revised economic growth projection reflects the impact of declining oil prices on Nigeria’s fiscal and external balances, the IMF stated.

Noting that energy exports remain Nigeria’s dominant source of foreign exchange earner and public revenue, the IMF further feared that the growth is expected to slow further to 2.7 per cent in 2026.

The International Financial institution also expects sub-Saharan Africa’s growth rate to decline to 3.8 per cent this year from four per cent last year.

It, however, sees a modest recovery in 2026, lifting to 4.2 per cent.

“Among the larger economies, the growth forecast in Nigeria is revised downward by 0.2 percentage points for 2025 and 0.3 percentage points for 2026, owing to lower oil prices, and that in South Africa is revised downward by 0.5 percentage point for 2025 and 0.3 percentage point for 2026, reflecting slowing momentum from a weaker-than-expected 2024 outturn, deteriorating sentiment due to heightened uncertainty, the intensification of protectionist policies, and a deeper slowdown in major economies,” it stated.

The IMF further stated that, even though Nigeria maintained a current account surplus, however, its external position is expected to weaken in the coming years.

It estimates its current account balance to shrink from 6.9 per cent in 2025 and further to 5.2 per cent in 2026, from 9.1 per cent of GDP in 2024.

The ICIR reports that the Central Bank of Nigeria (CBN) said Nigeria’s current balance of payments surplus stood at $6.83 billion for 2024, driven by a goods trade surplus of $13.17 billion. However, the IMF said the surplus might not be sustained.

This comes even as JP Morgan had also warned that Nigeria could slide into a current account deficit if oil prices remain below the country’s benchmark of $60 per barrel.

Nigeria’s inflation to hit 37% in 2026

In the same vein, the IMF expressed concern that Nigeria’s headline inflation will rise sharply to 37 per cent in 2026.

It stressed that the persistent price pressures and structural constraints would likely keep inflation elevated over the medium term.

It stated specifically that Nigeria’s inflation is expected to average 26.5 per cent this year before surging to 37.0 per cent in 2026.

The Nigerian inflation came down from an average of 33.2 per cent in 2024 after the National Bureau of Statistics (NBS) rebased the Consumer Price Index in January this year.

The NBS rebasing saw inflation ease to 24.48 per cent in January from 34.80 per cent in December 2024.

In February, it fell further to 23.18 per cent but rose to 24.23 per cent in March, signalling resumed upward pressure on consumer prices.

The IMF also flagged weak income growth among Nigerians.

It projects the country’s real output per capita to grow by just 0.6 per cent in 2025 and 0.3 per cent in 2026, reflecting limited gains in living standards.

UPDATE: 2.0 in the lede was updated to 0.2.