The International Monetary Fund (IMF) has revealed that Nigeria is not among Africa’s fastest-growing economies, with smaller nations such as Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda and Uganda now driving the continent’s economic expansion.
According to the IMF’s latest Regional Economic Outlook for Sub-Saharan Africa, the five countries are among the world’s top-performing economies—benefiting from sustained policy reforms, fiscal discipline and robust investment in manufacturing and infrastructure.
Presenting the report in Washington on Thursday, the IMF’s Director for Africa, Abebe Selassie, said overall growth in the region is projected to stabilise at 4.1 per cent in 2025, with a modest acceleration expected in 2026. He credited this resilience to improved macroeconomic management, though he cautioned that global headwinds continue to test Africa’s recovery.
“Benin, Côte d’Ivoire, Ethiopia, Rwanda and Uganda are now among the fastest-growing economies in the world,” Selassie said. “Their performance reflects sustained reform momentum and macroeconomic stability. But challenges remain—slower global growth, weaker demand, and tighter financial markets continue to weigh on the region.”
Nigeria’s exclusion from the IMF’s list comes despite a recent upward revision of its own growth forecast. The Fund now expects Africa’s largest economy to expand by 3.9 per cent in 2025, supported by higher oil output, improved investor confidence and more supportive fiscal policies—an increase from its July projection of 3.4 per cent.
Official data from Nigeria’s National Bureau of Statistics show GDP grew by 4.23 per cent in the second quarter of 2025, up from 3.48 per cent a year earlier, buoyed by gains in oil production and non-oil sectors. Yet, the IMF warns that growth remains below potential and calls for deeper reforms to address structural bottlenecks.
Selassie urged Nigeria to prioritise electricity reform, non-oil revenue mobilisation, and inflation control, while tackling the growing risk of financial instability linked to public debt. “Many governments are increasingly dependent on domestic banks to finance spending,” he said. “This deepens the sovereign-bank nexus and raises concerns about financial stability.”
The IMF estimates that in about half of Sub-Saharan African countries, domestic banks now hold most of the public debt—a trend that could expose the financial sector to sovereign risks if borrowing continues to rise.
Inflation, though easing across the region, remains in double digits in several countries, while foreign reserves are under pressure. The Fund called for “modernised tax systems, improved debt transparency, and stronger regulatory oversight” to bolster fiscal resilience and rebuild buffers.
Turning specifically to Nigeria, Selassie said the recent decline in inflation—now around 23 per cent from more than 30 per cent a year earlier—reflects the impact of tighter monetary policy and a more flexible exchange rate regime. However, he warned that prices remain “structurally higher,” urging continued policy discipline.
Speaking separately during the IMF and World Bank Annual Meetings, Davide Furceri, Division Chief in the IMF’s Fiscal Affairs Department, described Nigeria’s fiscal stance as “neutral,” adding that its reforms in tax administration and public spending were “steps in the right direction.”
“Nigeria has made significant progress in simplifying its tax code and reducing wasteful expenditure,” Furceri said. “To accelerate growth, the focus should now shift to improving spending efficiency and expanding social protection for vulnerable groups.”
Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, also commended Nigeria’s monetary tightening and exchange rate reforms, noting that they have improved policy credibility and strengthened external buffers. “A depreciating exchange rate can help restore equilibrium,” Adrian said. “We have seen Nigeria take important steps to strengthen its policy frameworks.”
However, the IMF cautioned that Sub-Saharan Africa’s broader recovery remains fragile, with declining oil prices, volatile commodity markets, and tightening global financing conditions threatening to slow progress. While countries like Kenya and Angola have regained limited access to international capital markets, many others continue to face high borrowing costs and dwindling aid inflows.
Selassie concluded that the region’s economic resilience will depend on governments’ ability to sustain reforms, mobilise domestic revenue, and deepen intra-African trade. “Africa’s recovery is holding,” he said, “but it remains under pressure. The next phase must be about building trust in institutions, strengthening debt management, and ensuring that growth is both durable and inclusive.”
