The International Monetary Fund (IMF) has reported that poverty in Nigeria has risen to 63 per cent of the population despite improvements in macroeconomic stability driven by ongoing economic reforms.

The disclosure was contained in the IMF’s 2026 Article IV Consultation Report, which acknowledged progress made under the administration of President Bola Ahmed Tinubu while highlighting persistent challenges facing millions of Nigerians.

According to the report, an estimated 27 million Nigerians experienced food insecurity in the latter part of 2025, underscoring the social impact of rising living costs and economic adjustments.

The IMF noted that reforms including the removal of fuel subsidies, foreign exchange market liberalisation, fiscal discipline measures and the end of deficit monetisation have strengthened Nigeria’s macroeconomic position and improved investor confidence.

The report showed that Nigeria’s gross international reserves increased to $46 billion in 2025 from $40 billion recorded at the end of 2024, while net reserves rose significantly from $23 billion to $35 billion within the same period.

The Fund also observed that the foreign exchange market has become more stable, with the parallel market premium remaining below five per cent, while sovereign bond spreads have remained broadly stable despite global economic uncertainties.

The IMF projected that Nigeria’s economy would grow by 4.0 per cent in 2025 and 4.1 per cent in 2026, citing improvements in the banking sector, ongoing bank recapitalisation efforts and the country’s removal from the Financial Action Task Force (FATF) grey list.

Despite these gains, the Fund warned that inflationary pressures remain a concern. Inflation, which had declined for over a year, rose to 15.4 per cent year-on-year in March 2026, driven largely by increases in global fuel, food and fertiliser prices.

The report also revealed that Nigeria’s consolidated fiscal deficit widened to 4.4 per cent of Gross Domestic Product (GDP) in 2025 as oil revenues fell below government projections.

“Higher global prices of fuel, food and fertilisers continue to exert pressure on households and could worsen poverty and food insecurity,” the IMF stated.

The Fund identified volatility in global commodity markets and domestic security challenges as major risks to Nigeria’s economic outlook.

Executive Directors of the IMF commended Nigerian authorities for maintaining macroeconomic stability but urged the government to expand social protection programmes and strengthen support for vulnerable households.

The IMF also recommended a neutral fiscal stance in 2026, improved fiscal transparency, expanded cash transfer programmes and continued reforms in public financial management.

Additionally, the Fund advised the Central Bank of Nigeria to maintain a tight monetary policy stance until inflation is brought under control and to continue efforts toward an inflation-targeting framework.

Responding to the report, the Federal Government welcomed the IMF assessment, describing it as independent validation of its reform agenda and economic management strategy.

The government highlighted a nearly 10 per cent growth in per capita income in 2025 and pointed to ongoing interventions such as cash transfer programmes, student loans, consumer credit initiatives, healthcare investments and agricultural development schemes.

Special Adviser to the President on Revenue, Taiwo Oyedele, said the administration was implementing measures to strengthen fiscal reporting, improve budget transparency and enhance public financial management systems.

The Federal Government also expressed optimism that improved crude oil production, domestic refining capacity and expanded gas exports would boost revenue generation and strengthen foreign exchange earnings.

While acknowledging the progress recorded in macroeconomic indicators, analysts said the report highlights a major policy challenge for the government: ensuring that economic reforms translate into tangible improvements in living standards and reduced poverty for millions of Nigerians.

The IMF maintained that sustained reforms, stronger social protection measures and inclusive growth policies would be essential to ensuring that economic gains are widely shared across the population.

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The Nigerian Naira maintained stability against the US Dollar on Thursday, February 26, 2026, following the Central Bank of Nigeria’s (CBN) recent stabilization measures.

Investors and traders are cautiously optimistic as the currency continues to trade within a narrow range, reflecting confidence in the apex bank’s intervention and growing macroeconomic stability.

In the official Nigerian Foreign Exchange Market (NFEM), the Naira opened trading at 1,351.12 per dollar. Mid-morning activity saw the rate dip slightly to 1,347.99, before settling near 1,350.13 by midday.

Analysts note that this stability follows Wednesday’s market close and is influenced by the CBN’s 50-basis-point cut in the Monetary Policy Rate (MPR), now at 26.50%.

Market liquidity remains robust, supported by the CBN’s proactive management of excess bank liquidity and a steady supply of dollars for essential imports.

The official mean rate for the week has settled at approximately 1,349, signaling greater transparency and a reduction in speculative pressures in the foreign exchange market.

Parallel Market Performance

In the parallel market, the Naira also showed signs of stability, exchanging between 1,355 and 1,365 per dollar.

The spread between the official and parallel rates has narrowed to less than 1.5%, reflecting improved market convergence. Informal traders in major hubs such as Lagos and Abuja attribute this to the CBN’s policy of allowing Bureau De Change (BDC) operators regular access to foreign currency, which has helped meet demand and curb speculative activity.

Key Drivers Behind Naira Stability

Several macroeconomic factors have contributed to the Naira’s stability:

1. Interest Rate Adjustment: The reduction of the MPR to 26.50% indicates the CBN’s confidence in the ongoing disinflationary trend. While lower interest rates can sometimes weaken a currency, the market has interpreted this move as a signal of confidence in sustainable economic growth.
2. Strong Foreign Reserves: Nigeria’s external reserves climbed to $50.45 billion, the highest level in 13 years, providing nearly 10 months of import cover. This buffer helps protect the Naira against external shocks and enhances investor confidence.
3. Disinflation Trend: Headline inflation eased to 15.10% in January 2026, marking ten consecutive months of decline. This consistent drop in price growth has strengthened the real value of the Naira, making it more attractive to both domestic and foreign investors.
4. Economic Expansion: With a projected GDP growth rate of 4.68% for 2026, market sentiment has improved. Investors are increasingly confident that fiscal reforms, particularly in energy and agriculture, will support long-term currency stability.

Market Outlook

Financial analysts expect the Naira to maintain its range between 1,345 and 1,355 against the dollar for the remainder of the week. Continued vigilance from the CBN, coupled with structural reforms in key economic sectors, is likely to sustain the current equilibrium. The narrowing gap between the official and parallel market rates also suggests reduced pressure from speculative activities, a positive sign for both traders and policymakers.

Experts have highlighted that the stabilization measures are timely, given the historical volatility in the foreign exchange market. The combination of high foreign reserves, declining inflation, and careful liquidity management positions Nigeria to withstand external shocks and maintain investor confidence.

What This Means for Nigerians

• Businesses and Importers: Improved exchange rate stability provides greater predictability for importing goods and planning foreign transactions.
• Consumers: Stable currency reduces the risk of sudden price hikes on imported goods, helping protect household purchasing power.
• Investors: Narrow spreads and transparency in the market create an environment conducive to both domestic and foreign investment.

Conclusion

The Naira’s steady performance against the dollar on February 26 reflects a combination of proactive monetary policy, rising foreign reserves, and positive macroeconomic trends.

As the CBN continues its stabilization program, and with the government pursuing reforms in energy and agriculture, analysts remain cautiously optimistic that the currency will retain its stability, supporting broader economic growth and investor confidence.

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Nigeria’s external reserves have recorded a notable increase of $540.28 million in just two weeks, rising to $43.17 billion as of October 30, 2025, according to data from the Central Bank of Nigeria (CBN).

The uptick marks one of the most significant short-term gains in recent months and reflects improved foreign exchange inflows, stronger oil export receipts, and a consistent rise in diaspora remittances.

Financial analysts attribute the growth to sustained crude oil prices above the $90 per barrel mark, renewed foreign investment inflows, and the CBN’s foreign exchange reforms aimed at strengthening market confidence and stabilizing the naira.

Experts say the increase in reserves enhances Nigeria’s external position, providing a buffer against currency volatility and boosting the country’s credit outlook among international investors.

Recent reports by United Capital Research also confirmed the positive trend, noting that Nigeria’s reserves previously at $42.53 billion as of September 30, 2025 have reached their highest level in more than three years.

The firm added that with steady oil production, effective fiscal management, and continued inflow of remittances, Nigeria’s external reserves are expected to maintain a steady rise into early 2026.

Economic observers believe the growing reserves could strengthen Nigeria’s ability to meet external obligations, support trade balance, and reinforce the Central Bank’s ongoing monetary stability efforts.

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Nigeria’s foreign exchange turnover has grown by 56.4%, reaching $8.6 billion in 2025, up from $5.5 billion in 2024, according to Mohammed Abdullahi, Deputy Governor for Economic Policy at the Central Bank of Nigeria (CBN).

He said the increase reflects ongoing monetary and fiscal reforms aimed at boosting liquidity, transparency, and investor confidence. “Average net FX flows between January 2023 and July have doubled,” Abdullahi noted at the Nigeria Investors Forum during the IMF/World Bank Meetings.

CBN reforms, including an order-based quotation system and remittance policy changes, have raised foreign reserves to $43.4 billion, covering 11 months of imports. The bank also released $13 billion to domestic and international banks to support liquidity.

CBN Governor Olayemi Cardoso said the reforms are rebuilding investor trust and positioning Nigeria as a leading investment destination. “The rise in reserves shows renewed confidence and stronger fundamentals,” he said.

Presidential Adviser Sanyade Okoli projected 7% GDP growth by 2027–2028, citing diversification and strong sectoral performance. “Oil now accounts for just 4% of GDP, down from 8% in 2021,” she said, adding that PPPs in roads, power, and digital infrastructure are driving expansion.

Cardoso also revealed that Nigeria’s trade surplus now stands at 6% of GDP, reflecting improved resilience and policy stability.

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