Key points
- IMF says Nigeria’s economic reforms are improving macroeconomic stability and supporting growth, with GDP projected at 4.1 per cent in 2026.
- Poverty has risen to 63 per cent, while about 27 million Nigerians faced food insecurity in late 2025.
- The Fund urges stronger social protection measures, fiscal discipline and sustained reforms to cushion vulnerable households.
Main story
The International Monetary Fund (IMF) has reaffirmed its support for Nigeria’s ongoing economic reforms, citing improvements in macroeconomic stability, foreign reserves, and growth prospects, while warning that rising poverty and food insecurity continue to pose serious challenges to the country.
In its 2026 Article IV Consultation Report released after the conclusion of the IMF Executive Board review on June 1, the Fund acknowledged that reforms implemented by the Federal Government have begun yielding positive results. However, it stressed that the benefits have yet to significantly improve living conditions for millions of Nigerians.
According to the report, Nigeria’s economy expanded by an estimated four per cent in 2025 and is projected to grow by 4.1 per cent in 2026, driven by stronger performances in agriculture, real estate, information and communications technology (ICT), and the oil and gas sector.
The IMF noted that recent reforms have strengthened economic stability, improved investor confidence, and enhanced Nigeria’s external position, with gross international reserves increasing from $40 billion at the end of 2024 to $46 billion in 2025.
The Fund also commended progress in foreign exchange market reforms, fiscal discipline, banking sector recapitalisation, and efforts to improve transparency in public finance management.
The issues
Despite the positive macroeconomic outlook, the IMF expressed concern over the worsening social impact of economic adjustment measures.
The report revealed that poverty has risen to 63 per cent based on Nigeria’s national poverty line, while approximately 27 million Nigerians experienced food insecurity during the latter part of 2025.
According to the Fund, high food prices, transportation costs, and inflation continue to place significant pressure on households, particularly low-income families.
The IMF also highlighted fiscal challenges, noting that the consolidated government deficit widened to 4.4 per cent of Gross Domestic Product (GDP) in 2025 due to weaker-than-expected oil revenues.
Debt servicing remains another major concern, with interest payments consuming an estimated 53 per cent of Federal Government revenues in 2025, compared to 41 per cent in the previous year.
The Fund further warned against off-budget expenditures and expressed concerns over plans to finance part of the 2026 budget deficit through a proposed $5 billion total-return swap arrangement, which it said could expose the country to additional financial risks.
What’s being said
The IMF urged the Federal Government to strengthen and adequately fund targeted social intervention programmes to protect vulnerable citizens from the effects of ongoing economic reforms.
The Fund acknowledged that 9.2 million households have been enrolled in the national cash transfer programme, compared to the target of 15 million households, but stressed the need for sustained support and wider coverage.
It also advised the Central Bank of Nigeria (CBN) to maintain a cautious, data-driven monetary policy stance to address inflationary pressures and preserve macroeconomic stability.
While commending the banking sector recapitalisation programme, the IMF noted that non-performing loans rose to eight per cent in the third quarter of 2025, exceeding regulatory thresholds following the withdrawal of COVID-19-related forbearance measures.
The report also highlighted concerns over the rapid adoption of dollar-backed stablecoins in Nigeria, warning that unchecked growth could weaken monetary sovereignty and complicate capital flow management.
Reacting to the report, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele described the IMF assessment as independent validation of the government’s reform agenda.
According to him, reforms such as fuel subsidy removal, exchange rate liberalisation, elimination of deficit monetisation and improved fiscal discipline are helping to restore confidence in the economy.
He said the government remains committed to expanding social protection programmes, including direct cash transfers, support for small businesses and education financing initiatives.
What’s next
The IMF expects Nigeria to sustain ongoing reforms while prioritising social welfare measures to cushion vulnerable households from economic hardships.
The Fund also called for continued efforts to improve security, expand electricity supply, strengthen infrastructure, enhance agricultural productivity and deepen fiscal transparency.
With the 2027 presidential election approaching, the IMF noted that political considerations could limit the scope for major policy reforms, shifting its near-term engagement towards technical assistance and institutional capacity development.
Bottom line
The IMF’s latest assessment suggests that Nigeria’s economic reforms are delivering measurable gains in macroeconomic stability, growth and investor confidence. However, rising poverty, food insecurity, debt-servicing pressures and inflation remain significant challenges, underscoring the need for stronger social protection measures and sustained reform efforts to ensure that economic gains translate into improved living standards for ordinary Nigerians.
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