Nigeria Growth: IMF vs. Local Optimism

The Independent Media and Policy Initiative (IMPI) has questioned the rationale by the International Monetary Fund (IMF) for downgrading its economic growth projection for Nigeria in 2025 from 3.2 per cent to 3.0 per cent.

Its Chairman, Dr Omoniyi Akinsiju, faulted the downgrade, which was based on the global oil slump.

According to the policy think-tank, the Nigerian economy has not, of late, been solely about oil, especially with the substantial growth in the country’s non-oil export.

This, it said, was a result of ongoing economic diversification and the impact of government policies.

IMPI said it was more favourably disposed to the seven per cent growth forecast by Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

“In its economic outlook, the IMF downgraded Nigeria’s economic growth forecast for 2025 by 0.2 percentage points to 3.0 per cent, down from 3.2 per cent, while growth for 2026 was also revised downward by 0.3 percentage points to 2.7 per cent.

“The IMF justified this forecast by citing projected lower global oil prices as a significant risk to the country’s fiscal and external balances.

“We wonder how a single factor can be responsible for the projected massive decline in the size of an economy, more so, when Nigeria is moving away from its dependency on crude oil earnings,” the group stated.

It, however, said the World Bank’s projection, on the other hand, offered a more optimistic view.

“In its report, the World Bank projected that Nigeria’s economy would grow by 3.6 per cent in 2025, building on an estimated 3.4 per cent expansion in 2024 and, thereafter, strengthening to 3.8 per cent by 2027.

“The bank credited the federal administration’s possible sustenance of economic reforms with the gradual stabilisation of the macroeconomic environment.

“Critical to the World Bank’s projection is the expected improvement in the performance of the non-oil sectors, mainly services such as financial services, telecommunications, and information technology, as well as easing inflationary pressures and improved business sentiment,” said IMPI.

The group argued that it was not unusual for countries to pick holes inthe  IMF’s projections while citing the examples of Mexico and Zambia, where it was proved wrong.

“IMF’s GDP data discrepancies are not unique to Nigeria. At different times, its country members worldwide have had cause to dispute the body’s projections on various grounds.

“Mexico, for instance, has also disagreed with the IMF on its forecasts.

“In its World Economic Outlook, the IMF forecast a 0.3 per cent contraction in Mexico’s economic growth for 2025, down from the Fund’s January forecast of a 1.4 per cent expansion, as U.S. tariffs bite into exports.

President Claudia Sheinbaum of Mexico dismissed the IMF forecast, declaring, “We do not know what it is based on. We disagree. We have our economic models, which the finance ministry has, that do not coincide with this projection.”

IMPI urged Nigerians not to take the recent IMF’s negative economic projections very seriously.

“Experience has shown that several IMF projections on developing economies, such as ours, often prove inaccurate.

“In 2008, the IMF predicted that Zambia would be hit by the fall in copper prices during the financial crisis. The IMF was proven wrong as the Zambian economy survived the global downturn.

“We find comfort in the submission of the US Department of State, which described Nigeria as an economic miracle while commending the federal government’s ongoing reforms,” IMPI added.

The group acknowledged the concerns the World Bank and the IMF raised about the limited impact of the policies on reducing poverty among everyday Nigerians.

However, it insists that if there is ever a possibility of reducing the number of Nigerians living below the poverty line, it is under the current federal administration.

“For instance, the recently released Central Bank of Nigeria’s (CBN) March 2025 economic report indicated continued expansion in economic activities across Nigeria.

“The composite Purchasing Managers’ Index (PMI), at 52.3 percentage points, indicates economic expansion for the third consecutive month in 2025,” it concluded. (NAN)