With Projected GDP of $334bn in 2026, IMF Tips Nigeria as Africa’s Third-largest Economy Ahead of Algeria

• Attributes economic rise to ongoing reforms, including fuel subsidy removal, exchange-rate liberalisation, fiscal adjustments

James Emejo in Abuja

International Monetary Fund (IMF) has said Nigeria may emerge as Africa’s third-largest economy, with its Gross Domestic Product (GDP) projected to hit $334 billion in 2026, displacing Algeria.

With GDP of about $285 billion at current prices, Nigeria emerged fourth in Africa, trailing South Africa, Egypt and Algeria in 2025, according to the fund’s World Economic Outlook (October 2025).

IMF linked Nigeria’s anticipated economic rise to increased oil production, better Foreign Exchange (FX) liquidity, and the effects of ongoing economic reforms, including fuel subsidy removal, exchange-rate liberalisation, and fiscal adjustments – all of which are aimed at supporting medium-term growth, despite short-term inflationary pressures.

Nigeria’s GDP is tipped to rise to about $334 billion, placing it ahead of Algeria, whose output is projected at $284 billion this year.

IMF projections indicate a shift in the review year, with Nigeria’s economy expected to sustain current resilience with a strong growth outlook.

South Africa is expected to remain Africa’s leading economy, with a projected GDP of $443 billion, followed by Egypt at $399 billion in 2026.

In 2025, South Africa retained its spot as Africa’s largest economy with GDP of $426 billion, followed by Egypt at $349 billion, while Algeria ranked third with about $288 billion.

Nigeria’s economic ranking has fluctuated in recent years due to currency devaluations, rebasing exercises, and broader macroeconomic challenges affecting major African economies.

Earlier this year, IMF revised the country’s 2026 economic growth forecast upward to 4.4 per cent, from an earlier estimate of 4.2 per cent.

The World Bank also raised its growth projection for Nigeria to 4.4 per cent in 2026, up from 3.7 per cent forecast in mid-2025.

Last week, IMF projected Nigeria to contribute 1.5 per cent to global real GDP growth in 2026, which placed the country as the sixth highest contributor, and among the top 10 globally.

The development further positioned the country ahead of several advanced and emerging economies, including Brazil 1.5 per cent, Vietnam 1.6 per cent, Saudi Arabia 1.7 per cent and Germany – 0.9 per cent.

China is expected to retain its position as the largest contributor to global growth, accounting for 26.6 per cent, followed by India 17.0 per cent, United States 9.9 per cent, Indonesia 3.8 per cent, and Türkiye 2.2 per cent.

China and India are projected to drive 43.6 per cent of total global economic growth in this year.

The IMF report further hinted on the dominance of the Asia Pacific region, which was expected to account for nearly 50 per cent of total global economic growth, reflecting continued economic momentum across the region.

Reacting to the IMF report, Chief Executive of Tesla, Elon Musk, said, “The balance of power is changing.”

According to sources, Nigeria’s real growth projection remains around 3-4 per cent amid current challenges.

The country’s consumption-driven growth aided expansion in energy, services, telecoms, and trade.

The ranking also reflected the county’s role as a key growth driver among emerging economies, and its strong resilience, despite ongoing domestic and global economic challenges.

The IMF report showed how India and China were emerging as driving forces of global economic growth.

The Eurozone collectively adds two per cent to global growth. Advanced economies as a group are projected to expand 1.8 per cent while emerging markets reach 4.2 per cent.