The International Monetary Fund has revealed that Nigeria is not among Africa’s fastest-growing economies, as countries such as Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda continue to lead the continent’s growth trajectory in the world.
The IMF said the five countries are now among the world’s fastest-expanding economies, buoyed by sustained policy reforms, improved fiscal management, and investments in infrastructure and manufacturing.
The Director of the IMF’s African Department, Abebe Selassie, disclosed this during the launch of Sub-Saharan Africa’s latest Regional Economic Outlook at a press briefing monitored by our correspondent on Thursday.
He said Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda are among the world’s top-performing economies, crediting their strong growth to fiscal reforms and macroeconomic stability.
The Director also noted that overall growth in Sub-Saharan Africa is projected to stabilise at 4.1 per cent in 2025, with a modest pick-up expected in 2026, powered by macro stabilisation and reform efforts in key economies.
Selassie said, “Six months ago, our assessment highlighted the region’s strong efforts and that growth had exceeded expectations last year. But we also noted sudden realignment of global priorities and increasing turbulent external conditions, marked by weaker demand, softer commodity prices and tighter financial markets. Today, these global headwinds continue to test the region’s recovery and resilience.
“Sub-Saharan Africa’s economic growth, we now estimate, is expected to hold steady at 4.1% this year, with a modest pick-up expected in 2026. In our view, this reflects ongoing progress in macroeconomic stabilisation and reform efforts across the major economies in the region.
“It is important to note that several countries in the region, Benin, Côte d’Ivoire, Ethiopia, Rwanda, Uganda, are among the fastest-growing economies in the world.”
This omission comes despite the IMF’s recent upward revision of Nigeria’s growth forecast, projecting the economy to expand by 3.9 per cent in 2025, driven by higher oil output, improved investor confidence, and a more supportive fiscal policy.
The updated figures reflect a 0.5 percentage point increase from its previous forecast and signal renewed optimism about the country’s medium-term economic prospects.
In July, the IMF revised Nigeria’s economic growth projection for 2025 upward to 3.4 per cent, a 0.4 percentage point increase from the 3.0 per cent forecast published in its April 2025 World Economic Outlook.
The National Bureau of Statistics also reported last month that Gross Domestic Product grew by 4.23 per cent year-on-year in real terms in the second quarter of 2025.
The figure marks a notable improvement from the 3.48 per cent growth recorded in the corresponding period of 2024, reflecting modest gains from increased oil output, recovery in key non-oil sectors, and easing inflationary pressures.
However, the IMF’s verdict indicates that the growth remains below potential, and the government is urged to deepen structural reforms, improve electricity supply, curb inflation, and expand non-oil revenue through industrial diversification and better tax administration
“We still have quite a few resource-intensive countries and conflict-infected countries continuing to face significant challenges with only modest gains in per capita incomes. The external environment remains challenging, global growth is slowing, and commodity prices are diverging. Notably, oil prices are declining, while the price of copper, coffee and gold are fairly elevated.”
The fund also raised concern over rising financial vulnerabilities in Nigeria and other Sub-Saharan African countries, warning that governments’ growing dependence on domestic bank borrowing poses increasing risks to financial stability.
Selassie revealed that many governments are forced to turn to domestic banks as external financing dries up, deepening the “sovereign-bank nexus.” In about half of the cases, the IMF estimates that public debt is now held by domestic financial institutions, a trend that heightens risks to banking sector stability.
He explained that as access to external financing tightens, several African governments have turned to domestic lenders to sustain public spending, a trend he described as a double-edged sword that could strain banks’ balance sheets and deepen the link between public debt and financial sector risks.
“It has been really good to see the region showing strong resilience. But this will continue to be tested in the coming months. Pressure points include rising debt service costs, which are crowding out development spending, a shift towards domestic financing that has deepened the sovereign bank nexus, inflation that has eased at the regional level but remains in double digits in quite a few countries in the region, and external buffers that are under pressure and need to be rebuilt.
“Against this backdrop, we see two broad policy priorities. The first is domestic revenue mobilisation. This is very important to increase our country’s potential, the significant potential to be tapped here also, and the reforms that need to be considered here include modernising tax systems through digitalisation, streamlining inefficient tax expenditures, and strengthening enforcement via targeted compliance strategies.
“And importantly, these efforts must go beyond technical adjustments. It will be essential to build public trust in tax institutions, strengthen institutional capacity, and conduct careful impact assessment, including distributional analysis, to ensure that these reforms are both effective and equitable.
“The IMF, of course, remains committed to supporting the region. Since 2020, we have disbursed nearly $69bn, including about $4bn so far this year. Our capacity development efforts also remain substantial, with countries in the region amongst the largest recipients of technical assistance.”
Selassie warned that in countries with high debt levels and elevated interest rates, stress could spill over into banks’ balance sheets. He called on governments to strengthen regulatory oversight, capital buffers, and ensure that public finance trajectories reduce the likelihood of harmful spillover over the years.
“On the issue of domestic banks’ vulnerabilities to rising public debt levels. So again, this is a point that we’ve been highlighting for several years. At this moment, we estimate that about half of the total public debt is held by domestic institutions. This has gone up over the years. As always, it’s a double-edged sword. As access to external financing has declined over the years, our countries, our governments have been able to turn to domestic banks, have had to turn to domestic financial institutions to sustain spending levels, to sustain economies.
“That has been a source of resilience, but we are now seeing a situation where there are significant vulnerabilities, and in particular in those countries where public debt is at very elevated levels, the risk of distress is higher, we are seeing some pressures on bank balance sheets, or there could be potential pressures on bank balance sheets.
“So again, it varies from country to country, the extent to which there are vulnerabilities, but it is an area of some concern in those countries where public debt is high, where interest rates are high, and we’re working with governments to make sure that there is a robust regulatory framework, robust capitalisation plans for banks, and of course first and foremost, the first line of defence, making sure that public finances are in a healthy trajectory to ensure that their spillovers are limited,” the director explained.
He added that Inflation remains stubborn in several countries, even as the regional average eases. And external buffers, such as foreign reserves, are under stress and in urgent need of replenishment.
Selassie warned that the region’s recovery is under pressure from external turbulence, weaker global demand, volatile commodity prices, and tighter global financial conditions.
He cited declining oil prices even as metals like copper, coffee, and gold remain elevated.
While a few countries, such as Kenya and Angola, have regained access to international capital markets, the IMF cautioned that tariff increases from the U.S. and the expiry of preferential trade access under AGOA erode growth prospects.
The impending sharp decline in foreign aid further constrains low-income and fragile states, limiting their fiscal flexibility.
To reinforce resilience, the IMF laid out two broad policy priorities, “Domestic revenue mobilisation, via modernising tax systems (especially through digitalisation), pruning inefficient tax expenditures, and reinforcing compliance.”
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