The International Monetary Fund has outlined critical priorities for Nigeria’s economic transformation, emphasizing food security enhancement and fragility reduction as essential growth drivers for Africa’s largest economy.
Following the IMF Executive Board’s comprehensive 2025 Article IV Consultation with Nigeria, economic experts identified key strategic areas requiring immediate government attention. These include strengthening agricultural productivity, addressing persistent security challenges, and eliminating bureaucratic barriers that constrain private sector growth.
The Washington-based institution acknowledged Nigeria’s remarkable reform implementation over the past 24 months, which has delivered substantial improvements in macroeconomic stability. However, board members expressed concern that these gains have not yet translated into widespread benefits for ordinary Nigerians, with economic uncertainty continuing to pose significant downside risks.
“Downside risks have increased with heightened global uncertainty. A further decline in oil prices or an increase in financing costs would adversely affect growth, fiscal and external positions,” the IMF directors stated during their assessment.
The economic risks extend beyond oil price volatility, with financing cost increases potentially undermining financial stability and creating additional exchange rate pressures. Security deterioration remains another critical concern that could impact growth trajectories and worsen existing food insecurity challenges.
To address these vulnerabilities, the IMF emphasized the necessity of agile policymaking approaches that safeguard macroeconomic stability while creating conducive conditions for sustainable growth and poverty reduction. The institution specifically highlighted the importance of removing structural barriers that limit private sector credit access, which is essential for supporting economic expansion.
The Central Bank of Nigeria received strong endorsement for maintaining its tight monetary policy stance, with directors recommending continuation until disinflation becomes firmly established. The end of deficit monetization and ongoing central bank governance improvements were welcomed as foundational steps toward effective inflation targeting.
On fiscal policy, the board advocated for a neutral stance that preserves macroeconomic stability while prioritizing growth-enhancing investments and expanding social protection through accelerated cash transfers to vulnerable populations. The advancement of Nigeria’s tax reform legislation was particularly commended as a vital step toward boosting revenue mobilization and maintaining debt sustainability.
The IMF also acknowledged progress in strengthening Nigeria’s banking sector, including efforts to raise minimum capital requirements and promote financial inclusion. Directors called for robust, risk-based supervision across mortgage, consumer lending, fintech, and cryptocurrency sectors to ensure continued financial stability.
About The Author
