LAGOS, Nigeria (NPA) — The International Monetary Fund (IMF) has commended Nigeria’s economic reforms under President Bola Ahmed Tinubu, saying the measures have strengthened macroeconomic stability, improved resilience and boosted investor confidence, even as poverty and food insecurity continue to worsen across the country.
In its 2026 Article IV Consultation Report released on Tuesday, the IMF said reforms implemented over the past three years, including the removal of fuel subsidies, exchange rate liberalisation, tighter monetary policy and the end of deficit monetisation, have helped rebuild external buffers, improve foreign exchange market functioning and restore confidence in the economy.
However, the Fund warned that millions of Nigerians continue to face severe economic hardship despite the gains recorded at the macroeconomic level.
According to the report, poverty has risen to 63 per cent of the population, while an estimated 27 million Nigerians experienced food insecurity in late 2025.
“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult,” the IMF stated.
The Fund projected Nigeria’s economy to grow by 4.1 per cent in 2026, slightly above the estimated 4.0 per cent growth recorded in 2025, driven largely by services, agriculture, real estate, information and communications technology, as well as improvements in oil and gas production.
Nigeria’s crude oil production is expected to rise from 1.64 million barrels per day in 2025 to 1.71 million barrels per day in 2026.
The IMF noted that inflation, which had been on a steady downward trajectory for more than a year, rose slightly to 15.4 per cent in March 2026 following increases in global fuel and food prices linked to geopolitical tensions in the Middle East.
Although inflationary pressures remain a concern, the Fund expects the disinflation trend to resume in the second half of the year, provided monetary policy remains tight.
The report also highlighted significant improvements in Nigeria’s external position.
Gross international reserves increased from $40 billion at the end of 2024 to $46 billion in 2025, while net international reserves rose from $23 billion to $35 billion during the same period.
The current account surplus stood at 4.8 per cent of Gross Domestic Product (GDP) in 2025, supported by stronger oil and gas exports and reduced dependence on imported refined petroleum products.
The IMF said the growing output of domestic refineries has significantly reduced fuel import requirements, strengthening the country’s external accounts.
On fiscal management, the Fund expressed concern over rising deficits and debt servicing costs.
Nigeria’s consolidated fiscal deficit increased to 4.4 per cent of GDP in 2025, up from 2.4 per cent in 2024, while interest payments consumed 53 per cent of Federal Government revenues, compared to 41 per cent a year earlier.
The IMF noted that while non-oil revenues met targets, oil revenues fell below expectations, forcing the government to rely on a combination of external borrowing, domestic securities and Eurobond issuances to finance spending.
The Fund called for a neutral fiscal stance in 2026, urging authorities to prioritise social spending and programmes targeted at vulnerable households while maintaining macroeconomic stability.
It also recommended accelerated reforms in public financial management, fiscal reporting, transparency and accountability.
The IMF welcomed recent tax reforms but indicated that additional measures may be required in the medium term to strengthen revenue generation and create fiscal space for development spending.
Among the options identified were improved tax administration, broader tax compliance and further reforms aimed at reducing leakages in government revenue collection.
The Fund further praised the Central Bank of Nigeria (CBN) for maintaining a tight monetary policy stance that has helped curb inflation and stabilise the naira.
It encouraged the apex bank to continue pursuing data-driven monetary policy decisions while advancing its transition towards an inflation-targeting framework.
On the foreign exchange market, the IMF endorsed Nigeria’s flexible exchange rate regime, describing it as beneficial to the economy.
The report also noted that Nigeria had strengthened its international standing after being removed from the Financial Action Task Force (FATF) grey list in 2025 and the European Union’s anti-money laundering watch list in early 2026.
The IMF, however, warned that major risks remain.
These include rising global commodity prices, deteriorating domestic security conditions, climate-related shocks, election-related spending pressures ahead of the 2027 general elections and potential disruptions in international financial markets.
The Fund stressed that insecurity continues to affect agriculture, investment and oil production, while poverty and food insecurity could worsen if global fuel and food prices remain elevated.
It urged the government to scale up social protection programmes, including cash transfers to vulnerable households, while accelerating reforms in electricity, infrastructure, agriculture, education and human capital development.
The IMF also called for stronger governance reforms and improvements in macroeconomic statistics to support effective policy formulation and implementation.
Despite the challenges, the Fund said Nigeria’s reform efforts have laid a stronger foundation for economic stability and future growth, provided policymakers sustain the current reform momentum and address the country’s deep-rooted structural challenges.
