IMF Urges Nigeria to Strengthen Public Finances Amid Rising Spending Pressures

The International Monetary Fund (IMF) has called on Nigeria and other governments to strengthen public finances and keep debt levels under control as spending pressures intensify. In its latest World Economic Outlook update, the Fund urged countries to adopt medium-term fiscal consolidation strategies while ensuring prudent debt management.

According to the report, Nigeria’s economy is projected to grow by 4.4 per cent in 2026, slightly up from 4.2 per cent in 2025, before easing to 4.1 per cent in 2027. This pace would place Africa’s largest economy above the projected global growth of 3.3 per cent and close to the Sub-Saharan Africa average of 4.6 per cent.

The IMF emphasized the need for broadening revenue sources, rationalizing government spending, and improving efficiency, particularly by leveraging private sector investment. It is recommended that discretionary fiscal measures be carefully targeted to support households and firms most affected by economic shocks, while avoiding costly, broad-based subsidies or industrial policies.

On monetary policy, the Fund stressed the importance of central bank independence to maintain price stability amid global economic shifts. It suggested gradual interest rate adjustments for economies with inflation near target, while urging caution for countries experiencing high inflation levels.

Looking ahead, the IMF highlighted structural reforms, digital transformation, and energy efficiency initiatives as critical to medium-term growth. Transparent trade policies, strong financial oversight, and clear economic frameworks were identified as essential tools to reduce uncertainty, attract investment, and ensure sustainable development for Nigeria.

source: punch