Nigeria Africa third-largest economy in 2026, IMF predicts growth from $285bn to $334bn amid reforms and rising oil production

The International Monetary Fund has projected that Nigeria will overtake Algeria to become Africa’s third-largest economy in 2026, driven by rising oil production, improved access to foreign exchange, and ongoing economic reforms.

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According to the IMF’s World Economic Outlook released in October 2025, Nigeria’s gross domestic product grew to $285 billion in 2025, placing it fourth in Africa behind South Africa ($426 billion), Egypt ($349 billion), and Algeria ($288 billion).

The fund now anticipates Nigeria’s GDP will reach $334 billion in 2026, while Algeria’s is expected to fall to $284 billion.

IMF officials attribute the growth outlook to policy measures including the removal of petrol subsidies, reforms to the exchange rate system, and adjustments to government finances.

While inflation remains a challenge in the short term, the IMF expects these measures to sustain medium-term growth.

In January 2026, the IMF revised Nigeria’s economic growth forecast to 4.4 percent, up from an earlier estimate of 4.2 percent.

The World Bank has similarly increased its 2026 forecast to 4.4 percent, compared with 3.7 percent projected in June 2025.

Nigeria’s economic ranking has fluctuated in recent years due to currency devaluation, economic rebasing, and other continental challenges.

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Analysts say the projected rise reinforces the country’s status as a leading African economy and underscores the impact of structural reforms.