The executive board of the International Monetary Fund (IMF) has commended Nigeria for its recent strides in economic reform, following the conclusion of the 2025 Article IV Consultation with the country.
In a statement released on Wednesday from Washington, DC, the IMF praised the monetary and fiscal authorities for successfully implementing major reforms over the past two years, which it said have significantly improved macroeconomic stability and resilience.
“The Nigerian authorities have implemented major reforms over the past two years, improving macroeconomic stability and enhancing resilience,” the IMF said.
“The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market. Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows.”
The Fund noted that Nigeria’s growth accelerated to 3.4 per cent in 2024, buoyed by increased hydrocarbon output and a vibrant services sector. However, it pointed out that agriculture remained weak due to security issues and declining productivity.
The IMF projected that Real GDP would grow by 3.4 per cent in 2025, driven by a new domestic refinery, higher oil production and strong performance in the services sector. Medium-term growth is expected to hover around 3.5 per cent, bolstered by ongoing domestic reform gains despite external uncertainties.
The Central Bank of Nigeria (CBN) was commended for maintaining a tight monetary policy stance, which the Fund advised should continue “until disinflation becomes entrenched.”
It welcomed ongoing recapitalisation of the banking system, enhanced financial inclusion efforts, and reforms to deepen the capital market. The IMF, however, called for robust risk-based supervision of mortgage lending, consumer credit, fintech and cryptocurrency sectors.
The report observed a notable improvement in the country’s external buffers, with gross and net international reserves rising in 2024, thanks to a strong current account surplus and increased portfolio inflows.
According to the Fund, reforms in the foreign exchange market and effective interventions helped stabilise the naira.
It also noted a decline in inflation, stating: “Naira stabilisation and improvements in food production reduced inflation to 23.7 per cent year-on-year in April 2025, down from a 31 per cent annual average in 2024,” citing the back-casted rebased CPI index by the National Bureau of Statistics.
Looking ahead, the IMF said inflation could decline further in the medium term if tight macroeconomic policies continue and retail fuel prices ease.
On fiscal matters, the Fund said performance improved in 2024, with revenues boosted by naira depreciation, stronger revenue administration and higher grants, which offset increased interest and overhead costs.
It also hailed the discontinuation of deficit monetisation and efforts to improve CBN governance as laying the groundwork for an inflation-targeting regime.
However, the report highlighted increased downside risks, warning that global uncertainty, declining oil prices, or higher financing costs could strain Nigeria’s economy. It also flagged insecurity as a major concern, with potential to affect growth and food security.
“The gains have yet to benefit all Nigerians,” the IMF irectors noted, urging agile policymaking to safeguard and strengthen macroeconomic stability, encourage growth and reduce poverty.
They also encouraged the authorities to phase out capital flow management measures in a properly timed and sequenced manner, adopt a neutral fiscal stance and prioritise investments that promote growth.
In addition, the IMF praised the government for advancing a tax reform bill, describing it as a crucial step to improve revenue mobilisation and create room for developmental spending while maintaining debt sustainability.
To sustain Nigeria’s progress, the report stressed the importance of addressing structural issues such as insecurity, bureaucratic hurdles, agricultural productivity, power supply, and improved spending on health and education. It also underscored the need for private sector credit expansion and better data quality for evidence-based policymaking.
The IMF said it would continue to support Nigeria through capacity development and technical assistance.
