The International Monetary Fund (IMF) has upgraded Nigeria’s economic growth projection, forecasting a 3.9% expansion in 2025 and 4.2% in 2026. Meanwhile the renewed focus of the IMF on tracing Illicit Financial Flows could plug Nigeria’s fiscal leakages, the Managing Director of the global multilateral institution, Ms. Kristalina Georgieva, has said. She spoke while engaging with Civil Society Organisations (CSOs) at the ongoing 2025 Annual Meetings of the IMF and World Bank in Washington DC. She said “we believe that for countries like Nigeria, the IMF’s renewed focus on tracing Illicit Financial Flows could provide a blueprint for plugging the fiscal leakages that have long undermined revenue generation and sustainable growth”. The MD warned of the growing threat of illicit financial flows (IFFs) phenomenon which she said has become a major factor undermining the economic and financial stability of nations across the globe.
According to the Fund, illicit financial flows — which include stolen public funds, proceeds from criminal activities, and untraceable digital transactions — continue to erode governance systems, drain public resources, and cripple developmental efforts, especially in developing economies. In a recent policy briefing, IMF officials noted that IFFs now come in “multiple dimensions.” These range from outright embezzlement of taxpayers’ money to private funds channeled into illegal ventures that threaten national welfare. The digital economy, they added, has further complicated the challenge with cryptocurrencies like Bitcoin providing an avenue for anonymous financial transactions. She said, “You may have money just plainly stolen — money that belongs to the taxpayers. You may have private money directed for criminal activities undermining the welfare of citizens,” the Fund noted. “Now with digital money, criminal activities can be funded without being traced. This is a serious problem, and we have to take it as such.” She said “Following the money” has now become a compulsory part of the IMF’s annual Article IV consultations — the standard economic health check for member countries. This ensures that the Fund routinely assesses each nation’s exposure to illicit flows and financial integrity risks.
The MD added that the IMF is embedding lessons from past experiences into its financial sector evaluation tools to better trace illicit transactions and vulnerabilities. In addition, she said for countries seeking IMF financial assistance, any program design will now include specific measures to address the problem of illicit flows, particularly where such challenges are deemed systemic. Ms. Georgieva also said the Fund was supporting member countries through technical assistance and training to enable local authorities to detect, trace, and respond effectively to suspicious financial activities. “We need to train country authorities so they can trace illicit financial flows, be more alert, and act quickly” she stated, adding “Digital tools help in tracking money, but they also create new avenues for evading oversight.”
The revised growth figures were announced on Tuesday during the launch of the World Economic Outlook (WEO) 2025 at the ongoing World Bank and IMF Annual Meetings in Washington, D.C. In its July 2025 update, the IMF had projected Nigeria’s economic growth at 3.4 per cent, but the latest report reflects a 0.5 percentage point increase, signaling renewed confidence in the country’s reform-driven economic recovery. Also, the Fund projected that the Nigerian economy would grow by 4.2% in 2026, an improvement from 3.2% it predicted in July. The Fund’s updated projection places Nigeria ahead of South Africa but slightly below the broader Sub-Saharan African regional average.
According to the report, South Africa’s growth forecast was raised marginally from 1.0 to 1.1 percent for 2025 but revised downward from 1.3 to 1.2 percent for 2026. Meanwhile, Sub-Saharan Africa’s growth outlook improved from 4.0 to 4.1 percent for 2025 and from 4.3 to 4.4 percent for 2026. Higher oil output, investor confidence, and fiscal reforms key drivers of improved outlook. In the report, IMF attributed Nigeria’s upgraded growth forecast to a combination of supportive domestic factors, including increased oil production, rising investor confidence, and a more favorable fiscal stance projected for 2026. The Fund said, “Whereas growth in Nigeria is revised upward on account of supportive domestic factors, including higher oil production, improved investor confidence, a supportive fiscal stance in 2026, and given its limited exposure to higher US tariffs, many other economies see significant downward revisions because of the changing international trade and official aid landscape,” IMF stated.
On the global front, the IMF projects that growth will moderate to 3.2 percent in 2025 and further to 3.1 percent in 2026. This marks a slight improvement from the July 2025 WEO update but remains 0.2 percentage points below earlier forecasts made prior to recent global policy shifts.
“This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced,” IMF said. The report further notes that advanced economies are expected to expand by around 1.5 percent over 2025–2026, with the United States slowing to 2.0 percent. According to IMF, emerging markets and developing economies are projected to grow just above 4.0 percent during the same period and global inflation is forecast to decline to 4.2 per cent in 2025 and 3.7 per cent in 2026, while world trade volume is expected to grow at an average rate of 2.9 per cent in 2025–2026—slower than the 3.5 per cent recorded in 2024, as trade fragmentation continues to limit gains.
