IMF Projects Nigeria To Become Africa’s Third Largest Economy By 2026

The International Monetary Fund (IMF) has projected that Nigeria could emerge as Africa’s third-largest economy by 2026, with its Gross Domestic Product (GDP) expected to rise to $334 billion, overtaking Algeria.

According to the IMF’s World Economic Outlook (October 2025), Nigeria ranked fourth in Africa in 2025 with an estimated GDP of $285 billion, trailing South Africa, Egypt and Algeria.

The Bretton Woods institution attributed Nigeria’s anticipated economic rise to increased oil production, improved foreign exchange liquidity, and ongoing macroeconomic reforms, including the removal of fuel subsidy, exchange-rate liberalisation, and fiscal adjustments.

The IMF noted that while these reforms have triggered short-term inflationary pressures, they were designed to support medium-term economic growth and stability.

Algeria’s GDP is projected to stand at $284 billion in 2026, which would place it behind Nigeria if current trends persist.

South Africa is expected to retain its position as Africa’s largest economy, with a projected GDP of $443 billion in 2026, followed by Egypt at $399 billion.

In 2025, South Africa led the continent with a GDP of $426 billion, followed by Egypt at $349 billion, while Algeria ranked third with $288 billion.

Nigeria’s economic ranking has fluctuated in recent years due to currency devaluation, GDP rebasing, and broader macroeconomic challenges. However, recent projections suggested a rebound.

The IMF recently 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 raised its growth projection to 4.4 per cent, up from 3.7 per cent in mid-2025.

The IMF further projected that Nigeria would contribute 1.5 per cent to global real GDP growth in 2026, placing it among the top 10 contributors worldwide.

China is expected to remain the largest contributor at 26.6 per cent, followed by India at 17 per cent and the United States at 9.9 per cent.

Reacting to the IMF report, Tesla Chief Executive Officer, Elon Musk, said, “The balance of power is changing.”

Despite persistent domestic and global headwinds, analysts said Nigeria’s consumption-driven economy continued to fuel growth in energy, services, telecommunications and trade, reinforcing its standing among emerging market economies.