Experts have noted a disconnect in the IMF’s 0.2% revision of Nigeria’s economic growth forecast for 2025, citing capital market strength as evidence of a more optimistic outlook, one that might likely surpass what the IMF expects.
This view was shared during a Nairametrics YouTube program, Drinks and Mics, co-hosted by Tunji Andrews, CEO of Awabah; Arnold Dublin-Green of Cordros Capital; and Opeyemi Aiku, Senior Manager, Investments, TotalEnergies.
Responding to the revision, Arnold Dublin-Green suggested that the International Monetary Fund (IMF)’s outlook may be based on macroeconomic assumptions that do not fully reflect Nigeria’s current realities.
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“When you’re living in a country, forecasting its economy gives you a clearer view of the key factors because you experience them in everyday life,” he said.
“Reading some IMF reports, I get the impression that certain important factors are missing, especially given how fragmented our economy is. Overlooking these elements can significantly reduce the accuracy of any forecast.”
Adding her perspective, Opeyemi Aiku noted that although the IMF assumes lower oil prices could weaken the naira, that risk would only materialize if the decline in oil prices continues over a sustained period.
She also pointed out that the agency’s analysis seemed to overlook security factors, which are essential to economic growth.
Referring to the recovery in the equities markets, she asked, “Look at how well corporate firms are rebounding—where does that fit into their assumptions?”
Backstory
In its latest World Economic Outlook, released in late April 2025, the International Monetary Fund (IMF) projected that Nigeria’s economy will grow by 3.0% this year.
This represents a slight downgrade of 0.2 percentage points from the Fund’s October 2024 estimate of 3.2%, and remains well below the Federal Government’s more optimistic target of 4.6% growth outlined in the 2025 budget.
- Despite the downgrade, the IMF acknowledged that Nigeria has taken bold steps to stabilize its macroeconomic environment.
- These include the removal of fuel subsidies, the liberalization of the foreign exchange market, and the end of central bank financing for fiscal deficits.
Still, the Fund emphasized that the benefits of these reforms have yet to reach most Nigerians, noting that poverty and food insecurity remain widespread: “Gains have yet to benefit all Nigerians as poverty and food insecurity remain high.”
The All-Share Index’s correction so far
After dipping to a low of 103,851.88 in mid-April, the Nigerian equities market—tracked by the All-Share Index (ASI)—has entered a recovery phase.
- The rebound began on April 16, 2025, fueled by a wave of strong first-quarter earnings reports that likely restored investor confidence and renewed buying interest across key sectors.
- The Q1 2025 results so far are broadly positive, particularly for large-cap stocks such as BUA Foods, MTN, Dangote Cement, and Aradel, as well as many leading companies in the banking, consumer goods, and industrial sectors.
By May 5, 2025, the ASI had climbed past the 106,500 mark, representing a recovery of more than 2.5% from its April low—a sign that investor sentiment is strengthening in response to underlying corporate performance.