The International Monetary Fund (IMF) has thrown cold water on Nigeria’s economic ambitions with its latest World Economic Outlook, projecting average inflation of 26.5% in 2025—more than 11 percentage points higher than the Nigerian government’s own optimistic estimate of 15% in its 2025 budget.

The report not only exposes the deep chasm between Abuja’s fiscal assumptions and economic reality but also calls into question the credibility of the much-trumpeted goal of transforming Nigeria into a $1 trillion economy by 2030.

In a report that spans inflation forecasts, GDP performance, and current account projections, the IMF paints a sobering picture of a country weighed down by painful reforms, external vulnerabilities, and a shrinking economic base. Inflation, it warns, may slow temporarily due to the recent rebasing of the Consumer Price Index (CPI), but this relief is superficial. By 2026, inflation is expected to spike again to 37%, highlighting the fragility of the current easing.

The gulf between the IMF’s projection and the federal government’s 15% inflation estimate is not a rounding error. It reflects a fundamental mismatch between policy expectations and economic outcomes—and one that could derail the assumptions underpinning next year’s federal budget.

The Vanishing Economy: GDP Halved in Two Years

Perhaps the most striking revelation is not just the inflation rate, but the massive collapse in the size of Nigeria’s economy, largely triggered by the floating of the naira and removal of petrol subsidies in 2023. While both moves were initially praised by international institutions for ending costly distortions, their immediate economic effect has been devastating.

According to the IMF’s figures, Nigeria’s GDP stood at $363.82 billion in 2023. But by 2025, that number is projected to fall to $188.27 billion—a staggering 48.3% decline in just two years. Such a contraction is unprecedented outside of wartime economies or states in financial meltdowns.

This collapse in dollar-denominated GDP is not just a statistical artifact. It reflects a real and painful erosion in the value of the naira, capital flight, reduced foreign investment, and a decline in real incomes. It also means Nigeria has slipped to the fourth-largest economy in Africa, behind South Africa, Egypt, and now Algeria—countries that, until recently, lagged behind in nominal terms.

Despite assurances from the government that these reforms would “unlock growth,” the short-term result has been a shrinking economy, worsened inequality, and rising poverty. The administration’s hopes of achieving a $1 trillion economy within the next five years now seem fanciful, if not outright delusional, unless there’s a dramatic turnaround in both policy execution and investor sentiment.

Inflation Masked by Technical Revisions

The recent rebasing of Nigeria’s CPI, from a 2009 base year to 2024, offered momentary cosmetic relief. Headline inflation, which stood at 34.80% in December 2024, appeared to drop sharply to 24.48% in January 2025, and slightly further to 23.18% in February. But by March, it had crept back up to 24.23%, signaling that the root causes—rising food costs, high logistics prices, and weak supply chains—remain unresolved.

Food inflation in particular has proven stubborn, driven by insecurity in farming regions, rising global food import bills, and the naira’s depreciation. The Central Bank of Nigeria (CBN) has tried to rein in inflation by keeping the Monetary Policy Rate (MPR) at 27.5%, but this has further tightened credit and stifled economic activity, especially for small businesses.

Current Account Surplus at Risk

While the balance of payments turned positive in 2024, helped by a current account surplus of 9.1% of GDP and a trade surplus of $13.17 billion, the IMF warns that this may not be sustained. It forecasts the surplus will fall to 6.9% in 2025 and 5.2% in 2026, reflecting the volatility of oil prices and the sluggish pace of structural reforms.

JP Morgan has cautioned that oil prices dipping below Nigeria’s fiscal breakeven of $60 per barrel could plunge the current account back into deficit. Fitch Ratings, meanwhile, remains more optimistic, forecasting a moderate surplus averaging 3.3% of GDP through 2026, contingent on successful energy sector reforms and the operationalization of key refinery projects, particularly Dangote’s.

Growth with No Gains: Per Capita Output Nearly Flat

The IMF revised Nigeria’s real GDP growth down to 3.0% in 2025 and 2.7% in 2026. But more critically, real per capita income is expected to rise by just 0.6% in 2025 and 0.3% in 2026. These marginal increases underscore the growing inequality in the country: while macro indicators may show mild improvement, the average Nigerian is getting poorer in real terms.

This stagnation in individual income is one reason why the Fund has urged Nigeria to go beyond headline reforms and address deep structural bottlenecks—from poor infrastructure to inefficient state enterprises and weak fiscal governance.

To its credit, the IMF acknowledges Nigeria’s recent reform efforts. It praises the end of central bank deficit financing, the unification of exchange rates, and the removal of petrol subsidies. However, it stresses that these are only first steps, and that failure to build on them with institutional reforms, fiscal discipline, and investment in human capital could see the country slide further behind its peers.

In this context, the government’s projection of a return to 15% inflation by 2025 seems less like a goal and more like a talking point. The reality, according to the IMF, is that Nigeria’s economic fundamentals remain weak, and unless major structural changes are made, both inflation and poverty will continue to worsen.

In 1776, Scottish economist and philosopher, Adam Smith, wrote the masterpiece, ‘The Wealth of Nations’- actually ‘An Inquiry into the Nature and Causes of the Wealth of Nations”. By coincidence, the United States Declaration of Independence was adopted the same year, making the American colonies independent.

America has since evolved to dominate the old British Empire. The Yankees figuratively were discipled by Dr. Smith who believed in the free market, and made his argument that ‘capitalism’ will benefit mankind than any other economic structure. He laid this foundation at the onset of industrial revolution and provided the basic mechanics for modern economics.

Smith made his case about the ‘invisible hand’ and why monopoly, and undue and unfettered government regulations, or interference, in market and industry must be discouraged. He believed that prudent allocation of resources cannot happen when states dominate and over interfere.

In that old time, America farmers could grow cotton but would not process it. It must be sent to England where it would later be imported into the U.S. as a finished product (Africa, sounds familiar?). Understanding that this decision was not due to lack of processing ability, you will appreciate Smith’s argument that the market must be free.

His theses were clear and were very influential; they provided the same level of fulcrum to Economics as Isaac Newton’s Mathematica Prinicipia did for Physics. While reading Smith’s book and understanding the time frame it was written, one cannot but appreciate the intellectual rigour in that piece. Before technology penetrated at scale across the regions of the world, he noted that all nations could compete at par in agricultural productivity.  The reason was absence of division of labor in any subsistence farming system in the world. A farmer does everything on the farm and is not an expert in most. Discounting fertile land, rain and other factors that could help farmers, all the farmers, from Africa to plantations in Alabama, the level of productivity was similar.  Why? No specialization was employed in the farming business at the time.

Fast track forward when the industrial revolution set forth. The British Empire became an engine of wealth creation through automation. It was a quintessential period of unrivalled human productivity which resulted in enormous wealth created. Technology not only helped to speed up process execution, it also helped to create a framework for division of labor.

Interestingly, Smith had noted that except for agriculture where productivity was flat because of lack of division of labor, other industries were doing just fine. And in those industries, there were organized structures which enabled division of labor. For instance, in the construction industry, there were bricklayers, carpenters, painters, and so on; but a farmer was a farmer.

As you read through Wealth of Nations and observe the 21st century, you will see the impacts of technology. Technology has changed economic structures and created new market adaptation rules with new species like artificial intelligence promising large scale disruption in industries.

Simply, it will be difficult to separate the health of any modern economy from its technology. It goes beyond the wealth of that nation to its survivability. The most advanced nations are the technology juggernauts while the least developing economics barely record any technology penetration impact at the productivity quotient. For the latter, it is like still living in the pre-industrial age Smith discussed on agriculture and division of labor where processes were inefficient.

Perhaps this explains the efficiency of the developed world in both the public and private arenas. The more technologies they diffuse, the more productive they become. In other words, show me the technology and I will tell you where the nation stands in the league of countries. The invention of steam engine changed the world and powered the industrial revolution, and the invention of transistor transformed the 20th century, and is fueling the new innovation century.

Yes, major scientific and mathematical breakthroughs seed great countries. From the old Babylon, Roman Empire, and Pharaoh’s Egypt to the modern America, knowledge has always ruled the world. You cannot separate better harvest at the banks of River Nile from the mastery of geometry which Egyptians played significant roles. Some old wars had been won by developing constructs that enabled efficient transportation of soldiers to battleground.  In short, knowledge won for nations even when everything was about physical goods. But what happens in the digitizing world?

Adding Internet Port to Seaport, Landport, Airport in Modelling Trade Deficits/Gains

In the realm of global trade measurement, a paradigm shift is underway as traditional frameworks grapple with the transformative impact of digitalization on economies worldwide. Historically centered on physical goods, international trade is now increasingly shaped by intangible services and software in the 21st century. This evolution necessitates a reevaluation of how we measure trade balances, moving beyond conventional metrics to encompass the full spectrum of economic activities in today’s interconnected world.  That Adam Smith did not include this digital construct does not mean we cannot redesign the measurement system.

Recent events, such as trade negotiations between the US and the world, underscore the urgency for updated methodologies that accurately capture the complexities of modern trade relationships. When we posit that Nigeria enjoys a trade surplus with the United States, we fail to understand that even though within the physical business space, measured at airports, seaports and landports, where Nigeria could be exporting more through our crude oil to record a trade surplus with the almighty America when we rarely import much, we could be flatly wrong. Why? If you include “internet ports” besides those seaports, landports and airports, Nigeria records significant deficits since from software to movies, from global banking services to social media and data services, Nigeria exports nothing but “imports” most from the US.

Largely, as countries navigate this new landscape, key themes emerge around the significance of services, data, cloud computing and software in shaping global trade balances. The rise of digital products has not only blurred traditional boundaries but also posed challenges in accurately assessing trade dynamics. With technology continuing to drive change at an unprecedented pace, nations must recalibrate so that trade deficits and surplus must be done in a comprehensive way to avoid distortions which could severely affect already beaten down economics which are recording TRADE DEFICITS via the internet ports with leading economies.

As the U.S. Department of Justice moves into the remedy phase of its antitrust trial against Google, a clear picture is beginning to emerge, one that suggests a dramatic shift in the balance of power within the tech industry.

What’s at stake is not just a browser or search engine, but control over the very future of the internet. OpenAI, an artificial intelligence firm that only recently rose to prominence with the launch of ChatGPT, now appears to be positioning itself as the next great search behemoth, just as Google seeks to become a dominant force in artificial intelligence.

At the heart of this pivot is Chrome, the world’s most widely used browser. The DOJ argues that Google’s ownership and integration of Chrome have allowed it to illegally entrench its dominance in the search market—sidelining competition and cutting off user choice. The government wants to dismantle that structure. One of its boldest proposals is to force Google to divest Chrome entirely.

During testimony at the trial this week, Nick Turley, OpenAI’s head of product for ChatGPT, didn’t mince words. When asked whether his company would be interested in buying Chrome, he replied with a confident “Yes, we would, as would many other parties.” It’s a statement that made clear OpenAI’s broader ambitions go far beyond chatbots and language models.

While the trial continues to deliberate whether Google should be compelled to relinquish Chrome, OpenAI is already eyeing what comes next: transforming the browser into a gateway for AI-powered search and web experiences. The company, which is deeply partnered with Microsoft but clearly not content to rely solely on Bing’s infrastructure, appears to be laying the groundwork for a new search ecosystem—one that bypasses the traditional blue links and instead uses generative AI to answer questions, recommend content, and even act on behalf of the user.

Turley told the court that OpenAI had previously asked Google to license its search API. A leaked email presented during the trial revealed that OpenAI had argued such a deal would allow it to build a significantly better product. But Google, worried about losing its edge in search, rejected the offer.

This isn’t just a corporate dispute—it’s a signal.

OpenAI is pushing forward to become a search powerhouse at the very moment that Google is leaning into AI to redefine its own future. The roles, in many ways, are reversing. Where Google once reigned unchallenged in search, OpenAI is now the one building out that domain. Meanwhile, Google is investing heavily in AI development through its Gemini platform—previously Bard—and embedding AI tools throughout its services.

Just last month, Google announced it would integrate generative AI responses directly into traditional search results, a move that is meant to counter the growing influence of AI-first tools like ChatGPT and Perplexity AI. Google is also racing to close the innovation gap in large language models, seeking to reclaim attention in a field where OpenAI has gained both mindshare and market share.

Through Gemini, Google aims to bring AI to Gmail, Docs, Maps, and even Search itself—turning its services into dynamic platforms where AI understands user needs, interprets queries more contextually, and anticipates what users want before they finish typing. It is, in effect, trying to reimagine itself in the mold of OpenAI.

Against this backdrop, many industry observers now believe the DOJ’s antitrust probe may mark a pivotal turning point in this transformation.

If Google is forced to divest key assets like Chrome or to make its search index accessible to competitors, it will weaken the foundation that has sustained its dominance for two decades. This would create space for rivals like OpenAI to not only challenge Google’s supremacy in AI but also build a rival search empire on their own terms.

That future is not far-fetched

OpenAI has already begun recruiting top-tier browser engineers, including former Google developers Ben Goodger and Darin Fisher, both instrumental in building Chrome during its early days. The company is rumored to be working on a Chromium-based browser of its own, but owning Chrome outright would fast-track its strategy, giving it an install base in the billions and near-instant access to web-scale user data—essential for training and refining AI agents.

An “AI-first” Chrome, under OpenAI’s control, would likely bake ChatGPT into every corner of the browsing experience, acting not only as a search assistant but as a decision-making tool. It would represent the browser’s most radical evolution since its inception—moving from a passive information portal to an intelligent co-pilot.

However, even with its own AI investments, Google may not be able to stop the momentum. The very antitrust scrutiny it now faces was sparked by its aggressive moves to protect its search monopoly—multi-billion dollar deals with Apple, Samsung, and others to keep Google as the default engine on devices worldwide. That strategy is now under threat, and so is the empire built on it.

If Judge Amit Mehta ultimately rules in favor of the DOJ’s remedies, it would not just disrupt Google’s current business—it might usher in a new paradigm where the lines between browser, search engine, and AI assistant blur completely. In that future, the players that dominate AI could also dominate search, reversing the decades-long dominance Google has enjoyed.

A New Digital Power Map

In effect, we’re witnessing what many analysts now describe as a trade-off of dominance. OpenAI, once a research lab, is maturing into a search and browser competitor. Google, once king of search, is fighting to reinvent itself as an AI leader. And the DOJ’s antitrust probe may be the inflection point that allows or forces that evolution to happen.

Should Chrome be sold, and should OpenAI or another AI-native company take over, the story of web search would no longer be told in keywords and ranking algorithms. Instead, it would be told through prompts, responses, and AI agents that can interact with the digital world on our behalf.

The future of the internet may no longer be about who owns the most links—it may be about who owns the smartest assistant. And that’s a future the DOJ trial is now helping to define.

The International Monetary Fund (IMF) has downgraded its growth projection for Nigeria in 2025 to 3.0 percent, a modest outlook that falls short of the Federal Government’s 4.6 percent estimate in the 2025 budget.

The revision, released Tuesday in the IMF’s latest World Economic Outlook, trims 0.2 percentage points off its earlier October 2024 forecast of 3.2 percent, citing weaker oil prices and lingering structural challenges.

The report, which examines global and regional economic trends, also sees Nigeria’s growth slowing further to 2.7 percent in 2026—a trajectory that casts doubt on the sustainability of the country’s ongoing economic recovery despite recent policy overhauls.

The Fund’s projection is at odds with figures released by Nigeria’s National Bureau of Statistics (NBS), which reported that the country’s economy grew by 3.84 percent in real terms in Q4 2024. That figure marked a noticeable uptick from both Q3 2024 and the same quarter a year earlier. The NBS attributed this acceleration to a modest rebound in the non-oil sector, improved agricultural output, and stronger performance in services.

Still, the IMF’s caution stems from broader vulnerabilities—chief among them inflation, unemployment, and a deepening food crisis.

Reforms Recognized, But Their Impact Remains Uneven

In its separate staff report following a recent visit to Nigeria, the IMF Mission led by Axel Schimmelpfennig acknowledged that President Bola Tinubu’s administration has taken “important steps” to correct years of macroeconomic instability. Among the reforms lauded were the scrapping of fuel subsidies, a liberalized foreign exchange regime, and halting the Central Bank of Nigeria’s deficit financing for the federal government—measures aimed at restoring fiscal and monetary discipline.

But while these policies have earned praise from international institutions, they have yet to deliver tangible benefits to most Nigerians.

“Gains have yet to benefit all Nigerians as poverty and food insecurity remain high,” the IMF cautioned, flagging the risk that prolonged hardship could undermine public support for the reforms and slow down implementation.

In March 2025, inflation climbed to 24.23 percent—driven largely by food and transport costs. Although the CBN has taken an increasingly hawkish stance, raising interest rates and tightening liquidity to combat inflation, the Fund warned that price pressures remain deeply embedded, especially in the context of widespread poverty and weak purchasing power.

A Regional Standout, But Not Out of the Woods

Nigeria’s 3.0 percent forecast puts it ahead of regional rivals like South Africa, which is expected to grow just 1.0 percent in 2025 and 1.3 percent in 2026. The average growth for sub-Saharan Africa is pegged at 3.8 percent in 2025 and 4.2 percent in 2026.

Still, Nigeria’s position isn’t secure. The IMF noted that the country’s outlook was downgraded due to softening oil revenues, a critical source of foreign exchange, and unresolved fiscal imbalances.

“Among the larger economies, the growth forecast in Nigeria is revised downward by 0.2 percentage point for 2025 and 0.3 percentage point for 2026, owing to lower oil prices,” the report noted.

Across emerging markets, countries in Asia are expected to grow at an average of 4.5 percent in 2025, while the United States is forecast to grow at 1.8 percent, and advanced economies more broadly at 1.4 percent.

CBN Commended for Data-Driven Approach

The IMF expressed support for the Central Bank of Nigeria’s new leadership and its “data-dependent” approach to monetary policy. The Fund described the strategy as appropriate for navigating Nigeria’s complex inflation dynamics and external vulnerabilities.

Since assuming office, the CBN governor, Yemi Cardoso, has moved to restore investor confidence and credibility, raising the benchmark interest rate several times. However, with inflation continuing to bite, especially for food and transport, households remain under pressure.

For the Tinubu administration, the challenge lies in converting technical reforms into meaningful gains for Nigerians. The disconnect between macroeconomic indicators and lived realities continues to haunt policy credibility.

While the reforms may have won Abuja some applause abroad, the true test remains at home—where millions are still waiting for the promises of economic recovery to translate into affordable food, jobs, and stability.