Nigeria is projected to reclaim a higher position in Africa’s economic rankings next year, with the International Monetary Fund (IMF) saying the country is on track to overtake Algeria to become the continent’s third-largest economy in 2026.
According to the IMF’s World Economic Outlook (October 2025 edition), accessed via the Fund’s datamapper, Nigeria stood as the fourth-largest economy in Africa in 2025 with a gross domestic product (GDP) of about $285 billion, trailing South Africa, Egypt and Algeria.
However, the fund’s updated projections show Nigeria’s economic output is expected to expand significantly next year, driven by higher oil production, improved foreign exchange liquidity and the impact of ongoing economic reforms.
La Parabas learnt that under the IMF’s forecast, Nigeria’s GDP in current price terms is expected to rise to about $334 billion in 2026, surpassing Algeria’s projected $284 billion, and moving Nigeria into third place on the continent — behind South Africa ($443 billion) and Egypt ($399 billion).
Explaining the shift, analysts said the expected rebound reflects improvements in key macroeconomic indicators following sustained policy adjustments by Nigerian authorities and better performance in the oil sector. “Nigeria’s stronger output in 2026 will largely be driven by expanded oil production and improved foreign exchange liquidity arising from policy reforms,” a senior economist familiar with the IMF data said.
The projections mark a notable turnaround after years of economic volatility. In 2025, Nigeria’s ranking slipped behind Algeria due in part to currency pressures and slower growth in non-oil sectors, but recent changes in economic policy and global oil dynamics have helped improve growth prospects.
Economists say that if sustained, the anticipated jump could boost investor confidence and support broader economic expansion. “This forecast shows that structural reforms and market-oriented policies are beginning to yield visible results,” said another financial expert tracking Nigeria’s economy.
However, challenges remain. Observers caution that long-term economic stability will depend on continued diversification beyond oil, stronger investment flows into manufacturing and services, and improvements in infrastructure and governance.
As Africa’s economies continue to evolve amid global uncertainties, Nigeria’s projected rise to the third position underlines shifting dynamics within the continent’s economic landscape and underscores the potential impact of reform-driven growth.
