Nigeria Set to Become Africa’s 3rd Largest Economy in 2026 – IMF

Nigeria is projected to climb to the third-largest economy in Africa by 2026, overtaking Algeria, according to the International Monetary Fund (IMF).

The IMF’s World Economic Outlook (October 2025 edition) shows Nigeria’s gross domestic product (GDP) at current prices stood at $285 billion in 2025, ranking behind South Africa, Egypt, and Algeria. South Africa led with $426 billion; Egypt followed with $349 billion, and Algeria came third at $288 billion.

The IMF expects Nigeria’s GDP to rebound to $334 billion in 2026, surpassing Algeria’s $284 billion. This would place Nigeria behind South Africa ($443 billion) and Egypt ($399 billion).

The forecast is driven by higher oil production, improved foreign exchange liquidity, and the impact of ongoing economic reforms.

“Recent reforms, including petrol subsidy removal, exchange-rate liberalisation and fiscal adjustments, will support medium-term growth despite short-term inflationary pressures,” the IMF noted.

Nigeria’s ranking has fluctuated in recent years due to currency devaluations, rebasing exercises, and macroeconomic headwinds. In 2024, Nigeria lost its status as Africa’s largest economy, dropping to fourth place after a series of Naira devaluations.

However, reforms appear to have stabilized the economy. On January 19, 2026, the IMF revised Nigeria’s growth forecast upward to 4.4%, from 4.2%. Days earlier, the World Bank also raised its projection to 4.4%, up from 3.7% in June 2025.

The federal government projects Nigeria’s economy will grow by 4.68% in 2026, supported by easing inflation, improved foreign exchange stability, and fiscal reforms.

Finance Minister Wale Edun said inflation, which peaked above 33% in 2024, fell to 15.15% by December 2025.

He added that foreign exchange volatility has eased, with the Naira trading below ₦1,500 to the Dollar, while external reserves rose to $46 billion.

Edun noted that GDP growth averaged 3.78% by Q3 2025, with 27 sectors recording expansion.

Rate, Like 👍, Comment 💬, Share this article, Follow us on our social media handles, and Submit your own story to get featured and earn rewards!