Manny Ita –
The International Monetary Fund has projected that Nigeria will overtake Algeria to become Africa’s third-largest economy by the end of 2026, attributing the anticipated shift to the impact of ongoing fiscal and structural reforms. The projection was contained in the IMF’s latest economic outlook, which assessed medium-term growth trajectories across the continent.
According to the report, Nigeria’s economic position is expected to improve as recent policy adjustments begin to yield results, particularly in public finance management and revenue mobilisation. The IMF noted that reforms targeting fuel subsidies, exchange rate unification, and tax administration are gradually reshaping macroeconomic fundamentals, despite short-term pressures on households and businesses.
An IMF official familiar with the report said the institution expects Nigeria’s gross domestic product to expand steadily if reform momentum is sustained, adding that “the outlook reflects both the scale of the Nigerian economy and the potential gains from difficult but necessary fiscal adjustments.” The Fund cautioned, however, that inflationary pressures and weak social safety nets remain significant risks.
The report contrasted Nigeria’s prospects with Algeria’s more moderate growth outlook, citing heavy reliance on hydrocarbon revenues and slower diversification. It stated that Nigeria’s larger population and expanding non-oil sectors could provide a stronger base for long-term growth if policy consistency is maintained.
The IMF stressed that the projection is conditional, warning that reform reversals or heightened insecurity could undermine expected gains. “Sustained commitment to fiscal discipline and structural reforms will be critical to achieving the projected outcome,” the report said, while urging authorities to complement economic changes with measures to protect vulnerable groups.
