Story by SpringnewsNG Media Limited | April 22, 2025

Nigeria’s projected economic growth for 2025 has been revised downward to 3.0% by the International Monetary Fund (IMF), a notable drop from the earlier estimate of 3.4% for 2024. The adjustment was detailed in the IMF’s most recent World Economic Outlook (WEO) report, unveiled during the IMF/World Bank Spring Meetings in Washington, D.C.

Declining Oil Output and Global Demand Hit Nigeria’s Economic Prospects

The IMF attributes the revised forecast to falling oil production levels and a weakening in global trade, which continue to weigh on Nigeria’s revenue prospects. As a country heavily reliant on crude exports, Nigeria is expected to experience tighter fiscal space due to reduced demand from importing nations.

“Exporters are set to see weakening oil supply and declining revenues, which will affect fiscal space,” the report noted, warning that economic vulnerabilities are rising for oil-reliant economies.

Rising Trade Barriers Deepen Global Economic Uncertainty

The IMF also raised alarms over the rapid rise in global trade restrictions. A new wave of tariffs imposed by the United States and subsequent retaliatory actions by major economies have created a volatile trade environment.

“We are entering a new era as the global economic system that has operated for the last 80 years is being reset,” said Pierre-Olivier Gourinchas, Chief Economist at the IMF. “Effective tariff rates are now at levels not seen in a century.”

These trade tensions are expected to have long-term negative impacts on both international demand and investment flows, affecting countries across the developing world.

Sub-Saharan Africa and Emerging Markets Face Growing Risks

For the sub-Saharan African region, including Nigeria, economic expansion is projected to continue losing momentum. The possibility of a recession in the U.S., combined with ongoing market volatility, could pose additional risks to countries with close economic ties to American financial systems.

Key forecasts include:

• Emerging markets and developing nations are expected to grow by 3.7% in 2025, easing slightly to 3.9% in 2026.
• Global inflation is projected to average 4.3% in 2025 and drop to 3.6% in 2026.
• Inflation in advanced economies may stay higher than anticipated, while developing countries may experience a modest decrease.

Policy Uncertainty Clouds Outlook

The IMF emphasized that central banks, particularly in the U.S., are navigating complex challenges with inflation pressures persisting. Recently introduced tariffs are adding to price instability, while economic policy frameworks are being reshaped globally in response to new geopolitical dynamics.

“The unfolding of these trade measures is a significant negative shock to global growth,” the IMF stated. “The economic landscape has shifted dramatically in just a few months.”

Nigeria, amid these global headwinds, may need to adopt more resilient economic strategies to stabilize its growth trajectory and manage emerging risks.