Nigeria is on track to move up one place in Africa’s economic ranking, with fresh projections showing the country could become the continent’s third-largest economy in 2026. New estimates from the International Monetary Fund (IMF) suggest a rebound in economic output following a difficult period marked by currency adjustments and structural reforms.
According to the IMF’s World Economic Outlook (October 2025 edition), Nigeria’s gross domestic product (GDP) was valued at roughly $285 billion in 2025, placing it fourth in Africa behind South Africa, Egypt and Algeria. South Africa led the ranking with about $426 billion, followed by Egypt at $349 billion, while Algeria edged Nigeria with an estimated $288 billion.
Looking ahead, the IMF expects Nigeria to overtake Algeria in 2026 as growth gains momentum. The country’s GDP is projected to rise to approximately $334 billion, surpassing Algeria’s estimated $284 billion. This would position Nigeria as Africa’s third-largest economy, behind South Africa ($443 billion) and Egypt ($399 billion).
The IMF attributes this expected improvement to a recovery in oil production, better access to foreign exchange and the impact of ongoing economic reforms. Measures such as the removal of petrol subsidies, exchange-rate liberalisation and tighter fiscal management are expected to strengthen medium-term growth, even as inflation remains a short-term challenge.
Nigeria’s economic standing has fluctuated in recent years due to currency devaluations, GDP rebasing exercises and broader macroeconomic pressures across the continent. In 2024, the country lost its long-held position as Africa’s largest economy and slipped to fourth place following major naira adjustments. However, recent developments suggest the reforms may now be delivering some stability.
Growth expectations have also improved. In January, the IMF revised Nigeria’s 2026 growth forecast upward to 4.4 per cent, from an earlier estimate of 4.2 per cent. Around the same time, the World Bank raised its own projection for 2026 growth to 4.4 per cent, up from 3.7 per cent forecast in mid-2025. The federal government is even more optimistic, targeting growth of about 4.68 per cent in 2026.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, has highlighted signs of macroeconomic easing. Inflation, which surged above 33 per cent in 2024, reportedly fell to 15.15 per cent by December 2025. He also noted improved foreign exchange conditions, with the naira trading below ₦1,500 to the dollar and external reserves climbing to around $46 billion. By the third quarter of 2025, GDP growth averaged 3.78 per cent, with expansion recorded across 27 economic sectors.
Together, these trends point to a gradual recovery and renewed confidence in Nigeria’s economic outlook as the country heads toward 2026.
