IMF: Nigeria’s Reforms Are Working, But Poverty and Food Insecurity Remain High
By Aboki Forex —
The International Monetary Fund says Nigeria’s tough economic reforms are starting to pay off. The Washington based institution stated on Tuesday that the reforms have improved macroeconomic stability and boosted investor confidence, even though poverty levels remain elevated.
In its latest Article IV consultation with Nigeria, the IMF noted that the economy has become more resilient to external shocks. But it warned that early gains could be eroded by global shocks, especially the fallout from the US-Israel war against Iran.
“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult,” the IMF said. It added that poverty has reached 63 percent using the national poverty line, and an estimated 27 million Nigerians faced food insecurity in the fall of 2025.
Tinubu’s Reforms: Fuel Subsidy Scrapped, FX Unified
Since taking office in May 2023, President Bola Tinubu has introduced a raft of investor friendly reforms. These include scrapping costly fuel subsidies, unifying exchange rates across multiple FX windows, adopting orthodox monetary policy, revamping the tax system, and rebasing the GDP.
More recent reforms include the recapitalisation of the banking and insurance sectors. The government says these are part of its push to achieve a trillion dollar economy by 2030.
While Bretton Woods institutions have praised the reforms, they have also fuelled a cost of living crisis. Galloping energy costs and soaring food prices have hit ordinary Nigerians hard.
The IMF said recent spikes in global fuel, food, and fertiliser prices are expected to boost Nigeria’s export earnings and government revenues. However, it warned that these could worsen inflationary pressures and deepen hardship for vulnerable households.
Growth Projections and Inflation Risks
The IMF projects a growth rate of 4.1 percent for 2026, slightly higher than the 4 percent forecast for 2025. But it cautioned that rising food and transportation costs could constrain economic activity.
“While the external shock to fuel and food prices will push up inflation in the short run, the disinflation path is projected to continue in the second half of the year,” the IMF said.
Government Welcomes IMF Assessment
The Nigerian government has welcomed the IMF’s assessment. In a statement on Tuesday, Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele described it as an endorsement of the economic strides under President Tinubu.
“The report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth,” Oyedele said.
He noted that the parallel market premium has remained below five percent, and sovereign spreads have stayed broadly stable despite rising global energy prices.
According to Oyedele, Nigeria could benefit from stronger export earnings, increased fiscal revenues, and higher foreign exchange inflows if elevated energy prices persist. He said the government intends to maximise these opportunities through increased crude oil production, expanded domestic refining capacity, and greater investment across the energy sector.
“Economic growth must be inclusive and must translate into tangible improvements in the welfare of Nigerians,” he added.
The minister said the government will continue to implement social protection measures, including cash transfers to vulnerable households, support for small businesses, student loans through the Nigerian Education Loan Fund, consumer credit initiatives, and healthcare investments.
“The ultimate objective of these reforms is not merely improved economic indicators, but better outcomes for every Nigerian; lower inflation, decent jobs, higher incomes, greater economic opportunity, and a better quality of life,” Oyedele said.