The International Monetary Fund (IMF) has declared that Nigeria is missing from the list of Africa’s fastest-growing economies, as smaller nations such as Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda continue to dominate the continent’s growth chart. According to the IMF, these countries are not only thriving within Africa but have now joined the ranks of the world’s fastest-expanding economies.
Their progress, the Fund noted, has been propelled by sustained policy reforms, improved fiscal discipline, and major investments in critical infrastructure and manufacturing sectors. This revelation underscores a shifting economic landscape where reform-driven nations are outpacing oil-dependent ones like Nigeria in the race for sustainable development.
At a press briefing on Thursday, monitored by journalists, the Director of the IMF’s African Department, Abebe Selassie, presented the findings during the launch of the Fund’s latest Regional Economic Outlook for Sub-Saharan Africa. He revealed that the five highlighted countries – Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda have emerged as Africa’s economic powerhouses.
“These economies,” he said, “have demonstrated remarkable resilience and consistency, powered by strong policy frameworks and macroeconomic stability.” Selassie added that the region’s overall growth outlook remains steady, projecting an expansion of 4.1 percent in 2025 and a further uptick in 2026.
In his detailed remarks, Selassie explained that while Sub-Saharan Africa continues to face headwinds from global economic turbulence, the region’s growth performance remains encouraging.
“Six months ago,” he recalled, “our assessment highlighted the region’s strong efforts, noting that growth had exceeded expectations last year. But we also observed sudden realignments of global priorities, weaker demand, softer commodity prices, and tighter financial markets. Today, these global headwinds continue to test the region’s recovery and resilience.”
Despite these challenges, he maintained that several African countries are showing impressive results, driven by ongoing reform efforts and fiscal prudence.
The IMF’s assessment, however, places Nigeria outside this elite circle of rapid-growth economies, despite the Fund’s recent revision of the country’s growth forecast. The IMF now expects Nigeria’s economy to grow by 3.9 percent in 2025 a 0.5 percentage point increase from its earlier forecast.
This modest upgrade, the Fund said, reflects optimism over improved oil production, stronger investor confidence, and more supportive fiscal measures by the government.
In July, the IMF had also adjusted Nigeria’s 2025 growth projection upward from 3.0 percent to 3.4 percent, signaling tentative progress. Nonetheless, this performance still lags behind regional leaders like Rwanda and Côte d’Ivoire, whose economies are expanding at nearly double that rate.
The National Bureau of Statistics (NBS) recently reported that Nigeria’s Gross Domestic Product (GDP) grew by 4.23 percent year-on-year in real terms during the second quarter of 2025 a noticeable improvement from the 3.48 percent growth recorded in the same period of 2024.
The NBS attributed this to increased oil output, recovery in non-oil sectors, and easing inflation. Yet, the IMF insists that Nigeria’s growth remains below its full potential. The Fund urged the government to deepen structural reforms, enhance electricity supply, stabilize inflation, and broaden non-oil revenue sources through industrial diversification and efficient tax systems.
Selassie highlighted that many African nations remain vulnerable to mounting debt and external shocks. “We still have quite a few resource-intensive and conflict-affected countries facing significant challenges, with only modest gains in per capita income,” he warned. He pointed to declining oil prices and rising global uncertainty as key threats.
“The external environment remains challenging. Global growth is slowing, and while prices for commodities like copper, coffee, and gold are fairly elevated, oil prices are trending downward.” This imbalance, he said, puts oil-dependent nations like Nigeria at a disadvantage, as their fiscal space continues to shrink amid falling revenues.
A major area of concern for the IMF is the growing financial vulnerability linked to governments’ heavy dependence on domestic bank borrowing. Selassie explained that many African governments, including Nigeria’s, are increasingly turning to domestic banks as external financing sources dry up—a move that, while providing temporary relief, exposes banking sectors to systemic risks.
“As access to external financing tightens,” he cautioned, “several governments have turned to domestic lenders to sustain public spending. This is a double-edged sword that could strain banks’ balance sheets and deepen the link between public debt and financial sector risks.” He further noted that in about half of Sub-Saharan African countries, domestic financial institutions now hold most of the public debt.
Addressing policy priorities for the continent, Selassie outlined two key focus areas: domestic revenue mobilisation and debt management. “The first,” he said, “is increasing domestic revenue through modernised tax systems especially via digitalisation reducing inefficient tax expenditures, and reinforcing compliance.”
He stressed that these reforms must not only be technical but also aim to build public trust, strengthen institutions, and ensure fairness. On debt management, he urged governments to enhance transparency, improve budget oversight, and publish comprehensive debt data. “These measures,” he argued, “will help reduce borrowing costs and unlock innovative financing options.”
Turning to Nigeria’s inflation dynamics, Selassie acknowledged progress but warned of persistent challenges. “We find the decline in inflation consistent with the tightening of policies undertaken in recent years, particularly in monetary policy, as well as the effect of exchange rate adjustments,” he noted.
“However, inflation remains sticky due to what we call a ‘level shift’ prices have settled at higher levels. Continued policy discipline will be crucial to achieving targets.” He added that while the Nigerian government’s efforts have yielded results, the country must sustain momentum in fiscal consolidation and monetary coordination to ensure lasting stability.
Concluding his remarks, Selassie painted a mixed picture for Sub-Saharan Africa. He praised the region’s resilience and the IMF’s continued support, revealing that the Fund had disbursed nearly $69 billion to African countries since 2020, including $4 billion this year alone. “Our capacity development efforts remain substantial,” he said, “with countries in this region among the largest recipients of technical assistance.”
However, he warned that the future remains uncertain, with rising debt service costs, tightening global markets, and external pressures posing new threats. “The region’s recovery is being tested,” Selassie said gravely, “but with sound policies, transparency, and reform commitment, Africa can strengthen its resilience and secure a path toward inclusive and sustainable growth.”
The Fund noted that while many countries on the continent share similar macroeconomic challenges, their specific fiscal realities differ, thus requiring policy approaches tailored to individual circumstances. According to the IMF, the era of “one-size-fits-all” solutions is over; each nation must design strategies that align with its structural strengths and vulnerabilities.
“Boosting growth,” the Fund stressed, “is the surest path to making debt obligations affordable. But it is important to recognise that not all countries are facing the same pressures—hence the need for context-specific policy frameworks that fit each economy’s reality.”
In his remarks, Abebe Selassie, Director of the IMF’s African Department, drew attention to another pressing issue undermining development across the continent: illicit financial flows. He explained that billions of dollars continue to leak out of African economies through trade mis-invoicing, capital flight, and tax evasion.
“Lastly, on illicit financial flows,” Selassie said, “I think, you know, this is the nature of, you know, what comprises things that we consider illicit financial flows vary. Some of it is just simple trade, you know, leakages to do with capital outflows. Others have related to, you know, people trying to circumvent the tax system. S
till others are completely illegal flows, you know, related to corruption or other flows.” He emphasised that curbing such leakages is vital to strengthening domestic resource mobilisation and building fiscal resilience.
Selassie further elaborated that addressing illicit flows demands a systematic, reform-oriented approach. “So I think, you know, the way to tackle this is to identify what the source of the particular flows is and tackle them through reforms,” he said. “A lot of the reforms, the direction of reforms that countries are pursuing should go in a way to help address many of these challenges that we are seeing in terms of illicit financial flows.”
He stressed that improving governance, enhancing transparency, and strengthening regulatory oversight will go a long way in keeping national wealth within the continent and supporting long-term economic transformation.
The IMF chief also warned that although some African countries are beginning to regain access to international capital markets, borrowing conditions remain significantly expensive. He urged governments to exercise extreme caution when contracting new debts. “Market access is improving, but borrowing costs remain high,” Selassie cautioned.
“Governments must treat costly external borrowing cautiously and always anchor such decisions on a sound medium-term fiscal path.” He added that without discipline and careful fiscal planning, expensive debt could become a trap, crowding out essential social and infrastructure spending.
Despite these cautionary tones, Selassie commended Sub-Saharan Africa for its resilience amid global economic headwinds. He acknowledged that reforms in fiscal consolidation, exchange rate flexibility, and monetary tightening—particularly in major economies such as Nigeria – have helped stabilise growth and reduce inflationary pressures.
“On the challenges related to policy in the U.S.,” he said, “the fallout from higher tariffs has not been as bad as feared back in April. The global economy has weathered, and importantly, we have not seen other countries following the same path of tariff hikes. That’s encouraging.” Selassie, however, warned that nations reliant on exports to the U.S. could still face higher trade barriers and must rethink their trade strategies.
He called for a stronger focus on intra-African trade, noting that it offers immense benefits for economic diversification and value addition. “One of the striking things about African trade,” Selassie observed, “is that when we trade with each other, increasingly we tend to trade in more manufactured goods—higher value-added goods. When we trade with the rest of the world, we are exporting natural resources.
So there’s a big plus in terms of trading within Africa, and a big benefit to be had from promoting intra-Africa trade. I think this is also an opportunity to work in those kinds of areas.” His remarks underscored the importance of the African Continental Free Trade Area (AfCFTA) in unlocking new growth opportunities.
Meanwhile, the IMF has commended Nigeria’s recent fiscal and monetary policy reforms, describing the country’s overall policy direction as “broadly positive.”
The commendation came from officials of the IMF’s Fiscal Affairs Department and the Monetary and Capital Markets Department during the presentation of the Fiscal Monitor and Global Financial Stability Report on the sidelines of the 2025 IMF/World Bank Annual Meetings in Washington, DC. They highlighted that Nigeria’s ongoing reforms are beginning to yield tangible results, particularly in stabilising inflation, improving exchange rate transparency, and restoring investor confidence.
Speaking at the event, Davide Furceri, Division Chief at the IMF’s Fiscal Affairs Department, explained that Nigeria currently maintains a “neutral fiscal stance”—a balance between government spending and taxation that supports monetary policy efforts without stifling economic growth. “Currently, what we are projecting for Nigeria is a neutral fiscal stance,” Furceri said.
“We think that this neutral fiscal policy stance is also consistent in helping monetary policies to reduce inflation.” He lauded Nigeria’s reforms in tax administration and public expenditure, saying, “Many of the laws that have been passed have tried to streamline tax codes, reduce tax expenditures, and ease the burden on businesses and low-income households. These are policies that go in the right direction.”
Furceri added that Nigeria could achieve faster and more inclusive growth by improving the quality of its public spending. “Beyond revenue mobilisation,” he said, “Nigeria could achieve greater economic gains by improving the efficiency and composition of public spending – especially by channeling more funds into social protection and reducing vulnerability among low-income groups.” His comments suggest that Nigeria’s fiscal reforms are on track but need to be matched by stronger social policies to ensure equity and stability.
Presenting the Global Financial Stability Report, Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, noted that Nigeria’s exchange rate reforms and tighter monetary policies have strengthened policy credibility.
“Exchange rates are important buffers to adjust the domestic economy relative to shocks,” he said. “A depreciating exchange rate is not necessarily a bad thing; it may actually be a good thing to restore equilibrium. We have indeed seen in Nigeria many steps to strengthen policy frameworks.”
Echoing him, Jason Wu, Assistant Director at the IMF, observed that Nigeria’s revenue collection and foreign reserve transparency have improved remarkably. “Revenue collection has strengthened, and transparency in FX reserve positions has improved,” Wu said. “All of this has contributed to lower inflation from more than 30 per cent last year to 23 per cent this year. So the direction of travel appears to be positive.”
However, the IMF warned that despite these encouraging developments, Sub-Saharan Africa remains vulnerable to global shocks, especially capital flow volatility. Wu cautioned that “previous surge-and-retrenchment cycles could happen again,” exposing fragile economies to renewed pressure if foreign investors withdraw abruptly.
He advised that African nations must consolidate fiscal discipline, strengthen debt management, and deepen structural reforms to withstand future disruptions.
“It is important,” Wu concluded, “for countries to continue to improve fundamentals on the fiscal and monetary policy side, but also to develop more structural policies, like revenue mobilisation, debt management, and hopefully also support from the international community.”