IMF Backs Nigeria’s Economic Reforms but Warns of Rising Poverty and Food Insecurity
The International Monetary Fund (IMF) has once again expressed support for Nigeria’s ongoing economic reforms, acknowledging that the country is making progress toward greater macroeconomic stability and improved growth prospects. In its 2026 Article IV Consultation report, the global lender noted that recent policy decisions are beginning to strengthen the economy, even as their benefits are yet to fully reach ordinary Nigerians.
However, the IMF delivered a stark warning alongside its praise, cautioning that poverty and food insecurity remain serious and growing challenges. It estimated that poverty has climbed to 63 percent and that about 27 million Nigerians faced food insecurity in late 2025, with conditions likely to worsen if food and fuel prices remain high. The Fund stressed that without stronger social protection, vulnerable households will continue to bear the harshest burden of economic adjustment.
On the macroeconomic front, the IMF projected Nigeria’s economy to grow by 4.1 percent in 2026, supported by gains in agriculture, oil and gas, ICT, and real estate. It also noted that inflation pressures remain elevated due to rising transport and food costs, though it expects disinflation to return if tight monetary policies are maintained and supply conditions improve. Nigeria’s external position also strengthened, with reserves rising to $46 billion in 2025, reflecting improved foreign inflows and a current account surplus.
Despite these gains, the report raised concerns over fiscal discipline and debt pressures. It revealed that Nigeria’s budget deficit widened to 4.4 percent of GDP in 2025, while interest payments consumed more than half of federal revenue, severely limiting fiscal space for development. The IMF also flagged transparency issues, warning against unbudgeted spending practices and cautioning over risks linked to new financing arrangements and heavy reliance on short-term capital inflows.
Reacting to the report, Minister of Finance Taiwo Oyedele described the IMF’s assessment as a validation of the government’s reform agenda under President Bola Ahmed Tinubu, saying the policies are rebuilding confidence and laying the groundwork for long-term growth. While the IMF praised reforms such as subsidy removal, FX liberalization, and fiscal tightening, it also urged stronger social safety nets, improved transparency, and careful monetary policy to ensure that economic gains translate into real relief for Nigerian households.
source: The Guardian