IMF Backs Nigeria’s Reform Drive, Predicts Major Fiscal Breakthrough by 2025
Nigeria is edging closer to a long-awaited fiscal transformation as the International Monetary Fund (IMF) expressed strong confidence in the nation’s reform-driven economic trajectory. In its latest fiscal assessment, the global financial institution noted that Nigeria’s policy realignments, improved fiscal discipline, and commitment to transparency are positioning the country for sustainable growth. The IMF described Nigeria as being on the “brink of a fiscal breakthrough,” with its macroeconomic outlook steadily improving under ongoing reforms.
Davide Furceri, Division Chief at the IMF’s Fiscal Affairs Department, highlighted that Nigeria remains in the “moderate risk” category, an encouraging sign that reflects rising confidence in the government’s policy direction. He explained that the IMF’s projections account for Nigeria’s new borrowing strategies and inflation control measures, describing the current fiscal stance as neutral and consistent with efforts to stabilize prices. Furceri commended recent tax reforms, noting that simplified tax codes, reduced compliance burdens, and improved collection systems are creating a stronger revenue base without stifling business activity.
The IMF’s optimism rests heavily on Nigeria’s potential to strengthen revenue mobilization and enhance expenditure efficiency. With government revenue projected to reach 9.6% of GDP in 2025 and rise gradually thereafter, the Fund sees significant room for improvement toward the 15% threshold needed for sustained development. According to IMF economists, countries that surpass this benchmark often experience double-digit growth over time. For Nigeria, the path to fiscal strength lies in tightening tax administration, broadening the revenue net, and channeling public funds toward productive sectors like infrastructure and education.
One of the most significant turning points, the IMF noted, is the ongoing removal of fuel subsidies, long regarded as a major drag on public finances. The policy shift is freeing up billions for investment in critical areas such as healthcare, education, and infrastructure. Furceri emphasized that replacing blanket subsidies with targeted social programs would make Nigeria’s growth more inclusive and sustainable. The country’s debt profile also appears stable, with total public debt projected at 36.4% of GDP in 2025, well below global risk thresholds, and an encouraging interest-growth differential indicating healthy economic momentum.
Beyond the numbers, the IMF’s endorsement underscores a growing recognition of Nigeria’s governance reforms. The government’s push for transparency through public financial management upgrades, procurement discipline, and digital monitoring systems like the Integrated Payroll and Personnel Information System (IPPIS) is boosting investor confidence. While the IMF projects a modest fiscal deficit averaging -3.2% through 2030, it considers Nigeria’s trajectory sustainable and transformative. With continued reform momentum, fiscal consistency, and institutional resilience, experts believe Nigeria could be entering a new era of economic stability and growth, one that redefines its place in the global economy.
source: The Sun