The International Monetary Fund (IMF) has commended Nigeria’s economic reforms, noting that measures implemented over the past three years have strengthened macroeconomic stability and resilience.
In a statement issued Tuesday in Washington, DC, the IMF said Nigeria’s “strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience.”
The Fund reported that Nigeria’s gross international reserves rose to $46 billion in 2025, up from $40 billion at the end of 2024. This improvement was supported by a current account surplus, non-resident purchases of Central Bank instruments, and successful Eurobond issuance.
The IMF also disclosed that net international reserves increased significantly to $35 billion at the end of 2025 from $23 billion a year earlier.
Despite these positive indicators, the IMF cautioned that economic conditions remain challenging for many Nigerians, especially low-income households. It noted that poverty reached 63 percent under the national poverty line, with an estimated 27 million Nigerians experiencing food insecurity in late 2025.
The Fund warned that higher global fuel, food, and fertilizer prices could boost export earnings and government revenue but would also increase inflationary pressures, potentially worsening poverty and food insecurity in vulnerable communities.
The IMF estimated Nigeria’s economic growth at 4 percent in 2025, projecting a modest rise to 4.1 percent in 2026. It explained that rising food and transportation costs would continue to weigh on economic activity despite ongoing reforms.
Inflation rose to 15.4 percent year-on-year in March 2026 after declining for over a year. This increase was largely due to rising international fuel and food prices.
“After a declining trend for over a year, inflation nudged up to 15.4 percent in March 2026 as international fuel and food prices began impacting Nigeria,” the IMF stated. However, it expects inflation to resume its downward trajectory in the second half of the year, despite short-term pressures.
On fiscal policy, the IMF estimated Nigeria’s government deficit increased to 4.4 percent of GDP in 2025. While non-oil revenues met expectations, oil revenues fell short of projections. The shortfall was partly offset by under-execution of capital expenditure programs.
The IMF welcomed recent legislation that included additional capital spending outside the budget framework and identified risks such as global fuel and food price volatility and domestic security challenges.
“Risks to the outlook stem from the uncertain global environment, particularly fuel and food prices, and domestic security issues,” the Fund said.
It emphasized that stronger revenue mobilization could create space for investments supporting growth. However, external pressures could worsen poverty and food insecurity if they persist.
“Tight macroeconomic policies and continued reforms, supported by technical assistance, are crucial to maintaining stability and fostering inclusive growth,” it added.
The IMF recommended maintaining a neutral fiscal stance in 2026 to support macroeconomic stability and disinflation efforts. It urged authorities to protect priority spending and consider additional tax measures to fund social programmes.
It also called for reforms to improve transparency, fiscal reporting, and risk management, and to curb off-budget spending practices.
On monetary policy, the IMF praised Nigeria’s efforts to reduce inflation and advised maintaining a tight stance, guided by economic data, until inflation is firmly under control. It also supported progress toward an inflation-targeting framework and stronger communication of monetary policy.
The IMF acknowledged Nigeria’s flexible exchange rate regime and supported reducing dependence on short-term inflows, while encouraging the gradual removal of remaining exchange restrictions and capital controls.
Regarding the financial sector, the IMF noted resilience supported by bank recapitalization but advised vigilance over rising non-performing loans and sovereign debt exposure. It called for faster implementation of Basel III standards and greater oversight of crypto activities.
The IMF welcomed Nigeria’s removal from the FATF grey list and emphasized the need for ongoing reforms to sustain financial integrity.
Finally, it stressed the importance of structural reforms in governance, security, electricity, agriculture, infrastructure, and human capital, as well as strengthening macroeconomic data for better policymaking.
