IMF: Nigeria to become Africa’s third-largest economy in 2026

Nigeria is expected to become Africa’s third-largest economy in 2026, overtaking Algeria, according to the International Monetary Fund (IMF).

The IMF’s World Economic Outlook (October 2025 edition) shows that Nigeria’s economy was worth about $285 billion in 2025, making it the fourth-largest in Africa.

At the time, South Africa ranked first with $426 billion, followed by Egypt at $349 billion, and Algeria at $288 billion.

However, the IMF projects that Nigeria’s economy will grow strongly in 2026. Nigeria’s gross domestic product (GDP) is expected to rise to $334 billion, while Algeria’s GDP is forecast at $284 billion.

This would move Nigeria into third place, behind South Africa ($443 billion) and Egypt ($399 billion).

The IMF says Nigeria’s economic growth will be driven by higher oil production, better access to foreign exchange, and ongoing economic reforms.

These reforms include the removal of petrol subsidies, changes to the exchange rate system, and adjustments to government finances.

Although inflation remains a short-term challenge, the IMF believes these policies will support growth in the medium term.

Nigeria’s position as Africa’s largest or leading economy has changed several times in recent years due to currency devaluation, economic rebasing, and other economic difficulties across the continent.

In January 2026, the IMF increased its growth forecast for Nigeria to 4.4 percent, up from an earlier estimate of 4.2 percent. The World Bank also raised its 2026 growth forecast for Nigeria to 4.4 percent, from 3.7 percent projected in June 2025.