Nigeria is projected to become Africa’s third-largest economy in 2026, overtaking Algeria, according to the International Monetary Fund (IMF).
Figures from the IMF’s World Economic Outlook (October 2025 edition) show that Nigeria ranked fourth on the continent in 2025, with a gross domestic product (GDP) of about $285 billion at current prices. The country trailed South Africa, Egypt and Algeria.
In 2025, South Africa remained Africa’s largest economy with an estimated GDP of $426 billion, followed by Egypt at $349 billion, while Algeria ranked third with approximately $288 billion.
However, IMF projections indicate a shift in 2026, with Nigeria’s economy expected to rebound strongly. The Fund forecasts Nigeria’s GDP will rise to about $334 billion, pushing it ahead of Algeria, whose output is projected at $284 billion.
South Africa is expected to retain the top spot with a projected GDP of $443 billion, followed by Egypt at $399 billion.
The IMF attributes Nigeria’s anticipated economic improvement to increased oil production, better foreign exchange liquidity, and the effects of ongoing economic reforms, including fuel subsidy removal, exchange-rate liberalisation and fiscal adjustments. These reforms are expected to support medium-term growth despite short-term inflationary pressures.
Nigeria’s economic ranking has fluctuated in recent years due to currency devaluations, rebasing exercises and broader macroeconomic challenges affecting major African economies.
Earlier this year, the IMF revised Nigeria’s 2026 economic growth forecast upward to 4.4 percent, from an earlier estimate of 4.2 percent. The World Bank also raised its growth projection for Nigeria to 4.4 percent in 2026, up from 3.7 percent forecast in mid-2025.
