Nigeria is poised to reclaim its position as Africa's third-largest economy in 2026, according to the latest projections from the International Monetary Fund. The country's Gross Domestic Product is expected to reach approximately $334 billion, surpassing Algeria's projected output of $284 billion and marking a significant milestone in Nigeria's economic trajectory.
The IMF's World Economic Outlook attributes this anticipated rise to several key factors: increased oil production, improved foreign exchange liquidity, and the cumulative effects of ongoing economic reforms. These reforms include fuel subsidy removal, exchange-rate liberalisation, and fiscal adjustments that, while creating short-term inflationary pressures, are designed to support medium-term growth.
South Africa is expected to maintain its position as Africa's largest economy with a projected GDP of $443 billion, followed by Egypt at $399 billion. Nigeria's advancement to third place represents a notable shift from 2025, when the country ranked fourth behind Algeria.
Global Growth Contribution
Perhaps more significantly, the IMF projects that Nigeria will contribute 1.5 percent to global real GDP growth in 2026. This places the country as the sixth-highest contributor globally, ahead of several advanced and emerging economies including Brazil, Vietnam, Saudi Arabia, and Germany.
The IMF has also revised Nigeria's 2026 economic growth forecast upward to 4.4 percent, from an earlier estimate of 4.2 percent. The World Bank has similarly raised its growth projection for Nigeria to 4.4 percent, up from a mid-2025 forecast of 3.7 percent.
What This Means for Investors
For international investors and diaspora Nigerians considering opportunities in the country, these projections signal a maturing economy with strengthening fundamentals. The services sector, particularly ICT and finance, continues to drive growth alongside a recovering oil sector.
However, challenges remain. High inflation and fiscal pressures persist, and poverty reduction remains a priority for policymakers. Key focus areas include stabilising the naira, controlling inflation through effective monetary policy, and improving infrastructure.
The ranking reflects Nigeria's role as a key growth driver among emerging economies and its resilience despite ongoing domestic and global economic challenges. For those looking to invest or do business in Nigeria, understanding these macroeconomic dynamics is essential for making informed decisions.
Sources: International Monetary Fund World Economic Outlook, World Bank, Arise News