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The International Monetary Fund (IMF) has commended Nigeria’s economic reforms under President Bola Ahmed Tinubu, while warning that millions of citizens remain in poverty and food insecurity.

The IMF estimated the country’s economic growth at 4 per cent in 2025 and projected it at 4.1 per cent in 2026. It also noted that the country’s gross international reserves rose to $46 billion in 2025, up from $40 billion at the end of 2024, supported by the current account surplus, net purchases of central bank open market operations by non-residents, and Eurobond issuance. Furthermore, the statement noted that net international reserves rose to $35 billion at the end of 2025, up from $23 billion at the end of 2024.

“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience,” the IMF noted. “Still, conditions for many Nigerians remain difficult. Poverty reached 63 per cent, and 27 million Nigerians are estimated to have faced food insecurity in the fall of 2025.”

The Fund noted the country's inflation trajectory. “After more than a year of decline, inflation nudged up to 15.4 per cent year-on-year in March 2026,” it said, attributing the change in trend to a jump in international fuel and food prices. However, it projects 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.

Despite the positive outlook, the IMF cautioned that poverty and food insecurity are likely to worsen in the current external environment. 

The Tinubu administration's major economic reforms in 2023 included the removal of petrol subsidies and the adoption of a market-based exchange rate. The administration also approved increases in electricity tariffs and later introduced major tax reforms to improve fiscal revenue. 

The report reflects analysts’ views on the double-edged nature of Tinubu’s reforms. While quick gains in revenue mobilisation create fiscal space for priority spending, the removal of subsidies and currency devaluation have increased costs for households and businesses.

As analysts also predicted, the IMF said Nigeria's economic outlook remains vulnerable to external and internal risks. External risks stem from an uncertain global environment, particularly fuel and food price dynamics. The country's security situation poses an internal risk to people and economic activity, according to the report. 

Other specific issues highlighted in the annual report include the elevated overall deficit in consolidated government finances, estimated to have risen to 4.4 per cent of GDP in 2025. While non-oil revenues were on target, oil revenues fell short of budget expectations. The shortfall was offset by under-execution of reported capital expenditure, while some additional capital spending occurred outside the budget perimeter but has now been included in the budget through the repeal and reenactment bills.

To address the rising deficit, the Fund called for a “neutral” fiscal stance in 2026 to support macroeconomic stability and disinflation while safeguarding priority and social spending. It also said that additional tax policy measures may be needed over the medium term, including to fund a scaled-up cash transfer programme to provide relief to the most vulnerable. 

Highlighting concerns about off-budget spending and complex financing instruments, the report calls for accelerating reforms to strengthen the budget process, public financial management, fiscal reporting, the risk framework, transparency, and accountability.

On the monetary front, the IMF expressed support for the Central Bank of Nigeria (CBN)'s tight monetary policy stance, urging the apex bank to maintain it on a data-dependent basis until disinflation is entrenched and inflation expectations are anchored. It welcomed progress towards adopting inflation targeting and encouraged steps to strengthen monetary transmission and communication.

Furthermore, the Fund commended the authorities for their commitment to the flexible exchange rate regime, while recognising that foreign exchange interventions can play a complementary role in certain circumstances. However, it advised reducing reliance on portfolio flows with rollover risk and phasing out remaining exchange restrictions, capital flow management measures, and multiple currency practices as conditions permit.

The report notes that the financial system remains resilient, supported by the recent recapitalisation of banks, while encouraging continued vigilance over rising non-performing loans and the sovereign-bank nexus.

The IMF urged the authorities to accelerate the implementation of Basel III, including the countercyclical capital buffer and the liquidity coverage ratio. It also emphasised the need to further strengthen supervision and to bring stablecoin and other crypto-asset activities within the regulatory perimeter. 

Looking ahead, the IMF stressed that inclusive growth requires reforms across governance, security, electricity, agriculture, infrastructure, and human capital. It also advised integrating climate considerations into macroeconomic and development policies and strengthening macroeconomic statistics to support policy formulation.