The International Monetary Fund (IMF) has stated that Nigeria's stringent economic reforms are producing positive results, contributing to macroeconomic stability and increased investor confidence, even as poverty levels remain high. The IMF made this known on Tuesday following the conclusion of its Article IV consultation with Nigeria.
Improved Resilience but Persistent Challenges
The IMF noted that the economy of Africa's most populous nation has strengthened in recent years, making it more resilient to external shocks. However, it cautioned that early gains could be undermined by global shocks, particularly the repercussions of the US-Israel conflict with Iran. The Washington-based institution highlighted that strong reforms over the past three years have led to improved macroeconomic outcomes and built resilience, but conditions for many Nigerians remain difficult. Poverty has reached 63 percent according to the national poverty line, and an estimated 27 million Nigerians faced food insecurity in the fall of 2025.
Tinubu's Reform Agenda
Since assuming office in May 2023, President Bola Tinubu has implemented a series of investor-friendly but tough reforms across various economic sectors. These measures aim to attract international investors and revitalize an economy that slipped into recession twice under his predecessor. Key reforms include the removal of costly fuel subsidies, unification of exchange rates across multiple FX windows, adoption of orthodox monetary policy, overhaul of the tax system, and rebasing of the GDP. Recent initiatives also involve recapitalization of the banking and insurance sectors as part of the government's broader goal to achieve a trillion-dollar economy by 2030.
While these reforms have been praised by Bretton Woods institutions, they have also triggered a cost-of-living crisis due to soaring energy costs and rising food prices. The IMF stated that recent spikes in global fuel, food, and fertilizer prices are expected to boost Nigeria's export earnings and government revenues, but warned they could exacerbate inflationary pressures and deepen hardship for vulnerable households.
Economic Projections
The IMF projected a growth rate of 4.1 percent for 2026, slightly higher than the 4 percent forecast for 2025. However, it cautioned that rising food and transportation costs, which have inflated prices of other commodities, could constrain economic activity. The IMF noted that while the external shock to fuel and food prices will push up inflation in the short run, the disinflation path is expected to continue in the second half of the year.
Government Response
The Nigerian government welcomed the IMF's assessment, describing it as an endorsement of the economic progress under President Tinubu. In a statement on Tuesday, Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said the assessment recognizes improvements in macroeconomic stability, foreign exchange market reforms, fiscal management, and investor confidence. He stated that the report provides independent validation that the bold reforms are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth.
Mr. Oyedele added that the parallel market premium has remained below five percent, while sovereign spreads have stayed broadly stable despite rising global energy prices. He noted that Nigeria could benefit from stronger export earnings, increased fiscal revenues, and higher foreign exchange inflows if elevated energy prices persist. The government intends to maximize these opportunities through increased crude oil production, expanded domestic refining capacity, and greater investment across the energy sector.
He emphasized that economic growth must be inclusive and translate into tangible improvements in the welfare of Nigerians. The government will continue to implement social protection measures, including cash transfers to vulnerable households, support for small businesses, student loans through the Nigerian Education Loan Fund, consumer credit initiatives, and healthcare investments. The ultimate objective of these reforms is not merely improved economic indicators, but better outcomes for every Nigerian: lower inflation, decent jobs, higher incomes, greater economic opportunity, and a better quality of life.
