The International Monetary Fund (IMF) has shared its 2025 economic forecast for Nigeria, which reveals some projections on how the country’s economy may perform. This forecast is important for Nigerian businesses, especially since the economy is already facing many challenges.

The IMF’s forecast shows that while some economic growth is expected, high inflation and deep-rooted problems will continue. This creates a difficult situation that requires smart actions from both government leaders and business owners.

The IMF has forecast a 3.0% growth in Nigeria’s real GDP for 2025, which falls short of the Nigerian government’s target of 4.6% for the same year, pointing to a gap between expectations and current economic realities.

This gloomy outlook is caused by problems within our nation and around the world. Internationally, lower oil prices and reduced demand from developed countries have affected Nigeria’s income from exports. Oil exports remain the cornerstone of foreign exchange earnings and fiscal revenues, and any downturn in this sector could reverberate across the economy.

Domestically, structural rigidities continue to stifle broad-based growth in the economy despite reforms initiated by the federal government, which include the removal of fuel subsidies and the liberalisation of the foreign exchange market. However, while potentially beneficial in the long term, they have increased short-term costs for businesses.

One of the biggest concerns in the IMF’s outlook is inflation. While it is expected to decrease slightly from its current high levels, inflation is still projected to stay very high, reaching 26.5% in 2025 and rising to 37.0% in 2026. These inflation trends pose a significant threat to business operations.

Rising prices for food and transportation, combined with supply-side constraints and currency volatility, contribute to the erosion of consumer purchasing power and increase input costs for firms. The recent National Bureau of Statistics (NBS) rebasing of the Consumer Price Index has further impacted the inflation figures.

Furthermore, external trade position, an important factor for business stability, presents a mixed outlook. The IMF expects the current account surplus to decrease from 9.1% of GDP in 2024 to 6.9% in 2025, and then further decline to 5.2% in 2026. This downward trend suggests a weakening external position that could place additional pressure on the naira and reserves.  

For business operators in Nigeria, these economic indicators suggest a demanding environment ahead. Sluggish economic growth could dampen both consumer demand and investor confidence. High inflation means rising costs of goods and services, reducing profitability, and potentially stalling business expansion.

Firms that rely on imported inputs will feel the pressure more acutely due to the ongoing currency volatility. From a policy perspective, fiscal and monetary measures have mixed implications. The removal of fuel subsidies, while aimed at improving fiscal sustainability, has increased operational costs for businesses, especially in logistics, manufacturing, and retail sectors.

Tighter monetary policy has made borrowing more expensive, particularly impacting Small and Medium-sized Enterprises (SMEs) that rely on credit for working capital and expansion. The challenge for Nigerian businesses lies in balancing cost management with strategic investments needed for resilience and growth.

For company directors, the 2025 IMF outlook necessitates a recalibration of strategy and governance priorities. Directors must take a forward-looking approach to risk management by conducting scenario planning and stress testing to evaluate how their operations may fare under adverse economic conditions.

Moreover, directors should advocate for robust internal controls and transparency, especially in procurement and pricing decisions that are sensitive to inflationary trends. With currency volatility likely to persist, boards should consider revisiting their foreign exchange risk policies and explore opportunities to hedge exposure where possible.

Directors should ensure their organisations remain compliant with new fiscal and monetary guidelines while pushing for accountability and ethical leadership. Additionally, directors must enhance board-level oversight of compliance and regulatory adherence.

As economic reforms evolve, new legislative frameworks and industry-specific guidelines may emerge, which will require a swift adaptation. Directors should seek continuous professional development and engage legal and financial advisers to remain ahead of potential policy shifts.

Finally, directors should focus on building resilience within their organisations by fostering a culture of innovation and adaptability. Given the uncertain economic outlook, it is important for directors to ensure that their companies are well-prepared for potential disruptions. This includes investing in employee training, encouraging a flexible approach to business models, and embracing digital transformation to streamline operations.

Directors should also stay proactive in monitoring the changing regulatory and economic environment, adjusting their strategies to maintain competitiveness and sustainability in the face of economic challenges.

The IMF’s 2025 economic outlook presents a complex economic environment for Nigerian businesses, with slower growth, ongoing inflation, and structural challenges threatening profitability and expansion. However, with strategic adaptation and effective governance at the board level, businesses can successfully navigate these obstacles.

Directors play an essential role in guiding organisations through uncertain times, helping to build resilience and ensure long-term success amid shifting economic conditions. Strong leadership and sound governance remain central to sustaining progress and responding effectively to emerging challenges.

Directors must embrace their responsibility for strategic decision-making, risk management, and fostering innovation to guide their companies toward sustainable growth. By focusing on long-term goals and maintaining strong governance practices, directors can help businesses thrive even in the face of economic adversity.

Research & Advocacy Department,