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 International Monetary Fund (IMF) has advised Nigeria to reconsider a proposed $5 billion financing arrangement with First Abu Dhabi Bank of the United Arab Emirates, warning that the transaction could expose the country to financial and transparency risks.

The caution was issued by the IMF Resident Representative in Nigeria, Christian Ebeke, who described the proposed financing structure as a complex derivatives-based instrument that may be difficult to assess due to limited transparency.

Speaking with journalists on Tuesday, Ebeke said similar transactions reviewed by the IMF in other countries often contained opaque terms, making it challenging to accurately evaluate the risks and long-term implications.

“Our view is that transactions in these types of structures carry risks. Usually they are opaque, so the terms are not always very transparent when we review these instruments across countries,” he said.

The IMF official urged the Federal Government to explore alternative financing options, including Eurobond issuances and concessional loans, rather than relying on derivative-backed funding arrangements.

The warning comes after the National Assembly approved President Bola Ahmed Tinubu’s request to secure $6 billion in external borrowing to support government spending and infrastructure development.

As part of the borrowing plan, the President sought legislative approval for a structured Total Return Swap (TRS) financing programme of up to $5 billion from First Abu Dhabi Bank.

According to Tinubu, the proposed funding is intended to support implementation of the 2026 budget, finance priority infrastructure projects and refinance existing domestic and external debt obligations.

The President also acknowledged that the additional borrowing would increase Nigeria’s public debt profile, which stood at approximately $110.3 billion, or N159.2 trillion, as of December 31, 2025.

The IMF’s intervention highlights growing concerns over the sustainability and transparency of public debt financing, particularly as developing economies seek alternative funding sources amid global economic uncertainties.

Analysts note that while structured financing arrangements can provide quick access to capital, they often require careful scrutiny to ensure they do not create hidden liabilities or expose countries to excessive financial risks.

The Federal Government has yet to officially respond to the IMF’s concerns regarding the proposed transaction.

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The Central Bank of Nigeria has defended its recent policy decisions, stating that ongoing reforms have helped cushion the impact of global economic shocks on Nigerians.

CBN Governor Olayemi Cardoso made this known during the Spring Meetings of the World Bank and International Monetary Fund in Washington DC, where he emphasised that the apex bank’s Monetary Policy Committee decisions are guided strictly by data.

According to Cardoso, timely reforms prevented what could have been a far more severe economic outcome for the country.

“If we had not taken the steps we did at the time—and if the reforms had not been implemented when they were—the outcome for the country could have been far more difficult and painful,” he said.

Nigeria’s inflation rate climbed to 15.38 percent in March 2026, reversing a prolonged period of gradual decline. The CBN governor attributed the increase to global pressures, particularly disruptions linked to tensions between the United States and Iran, which drove up energy, transportation, and food costs.

He noted that the central bank had deliberately resisted calls to ease monetary policy prematurely, anticipating external shocks that could destabilise the economy.

“This underscores an important point: members of the MPC have access to data and insights not always visible to the public,” Cardoso added.

Despite the inflationary pressures, the CBN reiterated its commitment to reducing inflation to single-digit levels, expressing confidence that economic stability is gradually taking hold.

“We remain focused on resilience because it directly addresses the concerns of Nigerians,” he said.

Also speaking, Minister of Finance Wale Edun said the country’s reform agenda is proving durable and self-sustaining, helping Nigeria navigate global economic uncertainties.

He highlighted key measures such as the adoption of a market-reflective foreign exchange regime and market-driven petroleum pricing, describing them as critical steps toward stabilising the economy.

Edun added that Nigeria’s reform programme has received positive feedback from international partners, noting that it is strengthening economic fundamentals and restoring investor confidence.

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The International Monetary Fund has warned that Nigerians may face more difficult economic conditions in the coming months as rising food and transport costs continue to strain household incomes.

The warning was issued by the IMF’s African Department Director, Abebe Selassie, during a briefing at the ongoing Spring Meetings of the World Bank and IMF in Washington, D.C.

Selassie said global shocks, including geopolitical tensions and supply chain disruptions, are already driving up the cost of living across Sub-Saharan Africa, with Nigeria among the hardest hit.

According to him, transportation costs have surged significantly, affecting both urban and rural populations and pushing food prices even higher.

“The immediate effect will be pressure on food security and transportation, which will ultimately raise the cost of food,” he said, noting that many households are already feeling the impact.

He added that the rising cost of living is making daily survival increasingly difficult for Nigerians, as inflation continues to erode purchasing power.

Despite these challenges, the IMF noted that Nigeria could benefit from rising crude oil prices, with key grades such as Brass River and Qua Iboe trading above $113 per barrel—well above the $60 benchmark in the 2026 budget.

Analysts say the surge in oil prices, driven by tensions in the Middle East and uncertainties around U.S.-Iran relations, could boost government revenue in the short term.

However, the IMF cautioned that the potential windfall may not translate into broad economic relief, as structural challenges and debt obligations remain significant.

The Fund projected that Nigeria’s debt-to-GDP ratio will rise to 33.1 percent by 2027, highlighting concerns about fiscal sustainability despite a slight downward revision from earlier estimates.

Data from the Debt Management Office shows that the country’s total public debt rose to ₦159.27 trillion as of the fourth quarter of 2025.

On policy direction, the IMF advised the government to maintain ongoing economic reforms, improve revenue generation, and prioritise critical spending.

Selassie stressed that abandoning reforms could worsen the situation, warning that inconsistent policies may derail long-term economic stability.

He also emphasised the need for stronger domestic revenue mobilisation, improved tax efficiency, and better public spending management.

In addition, the IMF warned against broad-based subsidies, describing them as costly and difficult to sustain, while urging policymakers to adopt targeted interventions that protect vulnerable populations.

Experts have also raised concerns about Nigeria’s fiscal outlook, noting that while the debt-to-GDP ratio appears moderate, the country’s limited revenue base poses a bigger risk.

They argue that a large informal economy and weak tax collection reduce the government’s capacity to service debt effectively.

Economic analysts further warned that higher oil prices could lead to increased fuel costs domestically, especially as the government maintains its stance against fuel subsidies.

This, they say, could worsen inflation and deepen economic hardship for millions of Nigerians already grappling with rising living costs.

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The Federal Government has ruled out plans to seek financial support from the International Monetary Fund, despite the institution’s proposed $50 billion support package for struggling African economies.

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this position clear during a press briefing at the ongoing World Bank/IMF Spring Meetings in Washington, D.C.

Edun stated that Nigeria has no intention, for now, to approach the IMF for additional borrowing, stressing the government’s commitment to managing its economic challenges independently.

“Nigeria has no plan at the moment to approach the IMF for any such burden,” he said.

His comments come shortly after IMF Managing Director, Kristalina Georgieva, disclosed that the global lender is preparing between $20 billion and $50 billion in financial support for countries facing economic strain, particularly in Sub-Saharan Africa.

Georgieva had advised nations under economic pressure to act swiftly when seeking financial assistance, warning that delays could worsen macroeconomic conditions.

While Nigeria is not seeking direct funding, Edun acknowledged that African economies are currently facing heightened vulnerabilities, especially due to global disruptions linked to the Middle East crisis.

According to him, many African countries—particularly oil-importing nations—are disproportionately affected by rising global tensions, which threaten macroeconomic stability, job creation, and poverty reduction efforts.

He noted that these countries require additional support, even though they are not directly responsible for the external shocks impacting their economies.

The IMF chief also highlighted the broader global implications of the crisis, warning that ongoing conflicts and supply chain disruptions could weaken global economic growth.

She projected that global growth could decline from 3.4 percent last year to 2.1 percent in 2026, with a worst-case scenario of 2 percent if current pressures persist.

Georgieva further explained that higher oil prices and disrupted trade routes are already driving inflation and slowing economic expansion worldwide.

Despite these concerns, she revealed that African finance ministers and central bank governors have so far prioritised policy guidance over immediate financial assistance during discussions with the IMF.

Experts say Nigeria’s decision to avoid additional IMF borrowing may reflect concerns over rising debt levels and the conditions often attached to such loans.

The Federal Government has instead continued to focus on fiscal reforms, revenue generation, and economic policies aimed at stabilising the economy without increasing external debt exposure.

The development underscores Nigeria’s cautious approach to borrowing, even as global economic uncertainties continue to mount.

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The naira closed the week slightly weaker at the official foreign exchange market, settling at N1,421.9 per dollar, despite a softer U.S. dollar in global markets.

Data from the Central Bank of Nigeria (CBN) shows that domestic dollar supply constraints continued to outweigh supportive external conditions, keeping pressure on the local currency throughout the trading week.

Although the naira avoided sharp volatility, it failed to sustain early-week gains, reflecting persistent distortions in Nigeria’s foreign exchange market.

At the official window, the naira closed at N1,421.9/$ on Friday, compared to N1,421.5/$ on Thursday and N1,423/$ on Wednesday. Earlier in the week, the currency traded at N1,420/$ on Tuesday and N1,420.5/$ on Monday, after opening at N1,425/$.

Compared with the previous week’s closing rate of N1,417.95/$, the naira ended the week marginally weaker.

In the parallel market, the naira depreciated slightly to N1,491/$ on Friday, from N1,490/$ the previous day. Weekly trading ranged between N1,483 and N1,491 per dollar, widening the gap between the official and street markets to about N70/$.

A Lagos-based currency trading expert, Dayo Omole, attributed the divergence to ongoing supply challenges.

“Nigeria has restrictions on foreign currency access and a limited dollar supply, so the naira may not strengthen significantly in the parallel market,” Omole said.

He noted that movements in the global dollar do not always translate into gains for the naira, as domestic supply-demand dynamics often dominate price action.

“When the dollar weakens globally but Nigeria continues to struggle with FX supply, the gap between official and parallel market rates can widen further,” he added.

Nigeria’s foreign exchange market has remained under strain following years of FX controls, multiple exchange rate regimes, and weak dollar inflows.

Despite recent reforms by the CBN aimed at improving transparency and market efficiency, structural challenges continue to affect liquidity and price discovery.

FX supply has remained constrained due to weaker oil export receipts, subdued foreign portfolio investment, and inconsistent diaspora remittances. The persistent gap between official and parallel market rates reflects unmet demand and lingering confidence issues among market participants.

Meanwhile, Nigeria’s external reserves stood at $45.9 billion last week, according to the CBN, providing some buffer for currency management.

The International Monetary Fund (IMF) recently upgraded Nigeria’s 2026 economic growth forecast to 4.4 per cent, citing optimism around ongoing economic reforms.

However, analysts note that geopolitical risks and policy uncertainty in the United States continue to add volatility to global FX markets, indirectly affecting frontier currencies such as the naira.

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At the 2025 IMF World Bank meetings, Nigeria earned praise for its economic reforms but faced warnings over debt and oil-sector risks.

The IMF raised Nigeria’s 2025 growth forecast to 3.9%, citing stronger oil output and investor confidence. However, it cautioned that debt costs and fiscal pressures could derail progress if not carefully managed.

IMF Africa Director Abebe Selassie commended subsidy removal and exchange rate reforms but urged “credible debt management and revenue efficiency.”

CBN Governor Olayemi Cardoso said inflation had dropped to 18.02%, reserves exceeded $43bn, and the naira had stabilised. He reaffirmed the government’s resolve to sustain reforms.

The IMF projected Nigeria’s fiscal deficit to rise to 3.7% of GDP in 2026, warning that debt servicing is crowding out development spending. It also urged diversification and action against illicit financial flows.

Kristalina Georgieva said, “Nigeria is on the right path, reforms are difficult but essential to secure lasting prosperity.”

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The Central Bank of Nigeria (CBN) says investor confidence in the economy is growing, driven by reforms that have stabilized the naira, curbed inflation, and improved transparency.

Speaking at the IMF/World Bank Meetings in Washington D.C., CBN Governor Olayemi Cardoso said global investors and rating agencies have shown renewed trust in Nigeria’s economic direction.

He noted that the naira is strengthening, with the gap between official and parallel rates now below 2%, while foreign reserves have risen to over $43 billion, enough to cover 11 months of imports. Inflation, he added, dropped to 18.02% in September, the lowest in three years.

Cardoso said ongoing fiscal reforms, including subsidy removal and better revenue mobilization, are helping stabilize public finances and attract new investments. Over $8 billion has been committed to Nigeria’s energy sector this year alone.

He also announced that Nigeria will assume the Chairmanship of the Intergovernmental Group of Twenty-Four (G-24) on November 1, reflecting global confidence in the country’s reform progress.

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Nigeria has been left out of the International Monetary Fund’s (IMF) list of Africa’s fastest-growing economies, with Benin Republic, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda emerging as the continent’s top performers.

The IMF said these five countries are now among the world’s fastest-expanding economies, driven by sustained reforms, better fiscal management, and increased investment in infrastructure and manufacturing.

Abebe Selassie, Director of the IMF’s African Department, revealed this during the launch of the latest Regional Economic Outlook for Sub-Saharan Africa on Thursday. He noted that the region’s growth is expected to stabilise at 4.1% in 2025, supported by ongoing reforms and macroeconomic stabilisation efforts.

“Benin, Côte d’Ivoire, Ethiopia, Rwanda, and Uganda are among the fastest-growing economies globally,” Selassie said. “Despite global headwinds—softer commodity prices, weaker demand, and tighter financial conditions these countries have sustained strong growth through prudent reforms.”

Although Nigeria’s growth outlook has been revised upward to 3.9% in 2025, the IMF said this remains below its potential. The Fund attributed Nigeria’s modest improvement to higher oil output, fiscal policy adjustments, and improved investor confidence.

Data from Nigeria’s National Bureau of Statistics showed GDP growth of 4.23% year-on-year in Q2 2025, up from 3.48% in the same period of 2024 reflecting gains from increased oil production and recovery in non-oil sectors.

However, Selassie warned that structural weaknesses, high inflation, unreliable power supply, and overreliance on oil revenue continue to constrain Nigeria’s long-term growth prospects. He urged the government to deepen fiscal reforms, expand non-oil revenue, and strengthen electricity and infrastructure systems.

The IMF also raised concern over rising financial vulnerabilities in several African countries, including Nigeria, as governments increasingly depend on domestic banks for borrowing. About half of public debt in the region is now held by local financial institutions, heightening risks to banking stability.

“While domestic borrowing has helped sustain spending, it also exposes banks to sovereign risk, especially where debt levels and interest rates are high,” Selassie cautioned.

To bolster resilience, the IMF recommended two key policy actions domestic revenue mobilisation through tax reforms and digitalisation, and stronger debt transparency and management to reduce borrowing costs.

Speaking specifically on Nigeria, the IMF noted that inflation has begun to ease following tighter monetary policy and exchange rate reforms, though prices remain elevated. The Fund described Nigeria’s current fiscal stance as “neutral,” supporting efforts to control inflation without stifling growth.

IMF officials praised the government’s reforms in tax administration and public expenditure, citing improved efficiency, reduced waste, and greater transparency.

Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, said Nigeria’s recent exchange rate adjustments and tighter monetary policy have enhanced policy credibility and strengthened foreign reserves. “A flexible exchange rate helps cushion shocks and restore equilibrium,” he noted.

Assistant Director Jason Wu added that Nigeria’s revenue collection and FX reserve management have improved, helping lower inflation from above 30% last year to about 23% this year.

Despite these gains, the IMF warned that Sub-Saharan Africa remains exposed to global uncertainties, including fluctuating commodity prices and volatile capital flows.

Selassie concluded that countries must sustain fiscal discipline, strengthen institutions, and deepen regional trade to unlock Africa’s full growth potential.

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The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, will represent the country at the 2025 Annual Meetings of the World Bank and International Monetary Fund (IMF) scheduled to open on Monday, October 13, in Washington, D.C.

Cardoso, who serves as Nigeria’s Alternate Governor at the Bretton Woods institutions, will step in for the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who is currently indisposed.

Also on the delegation is the Minister of State for Finance, Dr. Doris Uzoka-Anite, alongside senior officials from key economic and financial agencies.

According to the World Bank, major highlights of the week-long event include the Development Committee Plenary on October 16 and the International Monetary and Financial Committee (IMFC) meeting on October 17.

The sessions will feature high-level discussions on global economic outlook, development financing, and financial stability. Other side events include regional briefings, press conferences, and policy dialogues on pressing international economic issues.

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