IMF projects Nigeria as Africa’s third-largest economy in 2026, with GDP expected to reach $334bn, surpassing Algeria

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

Also read: IMF sees resilient global growth despite rising risks

According to the IMF’s World Economic Outlook released in October 2025, Nigeria’s GDP stood at approximately $285 billion in 2025, placing the country fourth in Africa behind South Africa, Egypt, and Algeria.

The anticipated economic rise is attributed to higher oil production, improved foreign exchange liquidity, and ongoing economic reforms, including fuel subsidy removal, exchange-rate liberalisation, and fiscal adjustments.

IMF projections indicate that South Africa will retain its position as the continent’s largest economy with a GDP of $443 billion, followed by Egypt at $399 billion.

Algeria, currently ranked third, is projected to produce $284 billion in 2026.

The report also highlights Nigeria’s increasing contribution to global growth.

The IMF expects the country to account for 1.5 per cent of global real GDP growth in 2026, positioning it among the top ten contributors worldwide, ahead of Brazil, Germany, Saudi Arabia, and Vietnam.

The upward revision aligns with the IMF’s earlier adjustment of Nigeria’s 2026 growth forecast to 4.4 per cent, up from an earlier 4.2 per cent estimate.

The World Bank has also raised its growth projection to 4.4 per cent, reflecting the country’s resilience amid domestic and global economic challenges.

Nigeria’s expansion has been supported by consumption-driven growth, particularly in energy, services, telecommunications, and trade, underlining its role as a key driver among emerging economies.

The IMF report further emphasises the dominance of Asia-Pacific economies, which are projected to contribute nearly 50 per cent of global economic growth in 2026, with China and India leading the way.

Also read: IMF warns Nigeria growth outlook faces political risks

Elon Musk, Chief Executive of Tesla, reacted to the IMF findings, stating: “The balance of power is changing,” highlighting Nigeria’s growing significance in the global economic landscape.