IMF Upgrades Nigeria Growth Forecast to 3.8% on Oil Output Recovery

The International Monetary Fund has revised upward its growth forecast for Nigeria to 3.8 per cent for 2026, citing a sustained recovery in crude oil production that has exceeded earlier projections.

The Fund's updated country assessment, published as part of a broader review of sub-Saharan African economic prospects, marks the third consecutive upward revision of Nigeria's growth outlook in twelve months.

**Oil Production Recovery**

Nigeria's crude oil output has climbed above 1.6 million barrels per day for the first time since 2020, according to data from the Nigerian Upstream Petroleum Regulatory Commission. The recovery reflects progress in combating oil theft and pipeline vandalism in the Niger Delta, combined with new investments from international oil companies following improved fiscal terms under the Petroleum Industry Act.

The IMF noted that sustained production above 1.5 million BPD would be the single most important driver of economic growth in the medium term, as oil revenues directly feed into both government budgets and foreign exchange availability.

**Beyond Oil**

The Fund's report also points to encouraging signs in Nigeria's non-oil economy. Telecommunications, financial services, and the nascent digital economy are all growing at above-trend rates, and the Fund projects that their combined contribution to GDP will gradually reduce Nigeria's dependence on hydrocarbon revenues over the next decade.

**Risks to the Outlook**

The IMF flagged several downside risks. These include the possibility of renewed oil price weakness, a reversal of reform momentum if political pressures mount, and persistent inflation that constrains private consumption.

The Fund also noted that poverty reduction remains insufficient relative to population growth, and called on the government to use the improved revenue environment to expand social protection spending.

**Government Response**

The finance ministry welcomed the forecast upgrade and said it validated the government's reform programme. Officials reiterated their commitment to further fiscal consolidation and structural reforms to sustain the growth momentum.