The International Monetary Fund (IMF) has raised concerns over illicit financial flows (IFFs) from Nigeria, warning they continue to undermine public revenue, weaken institutions, and obstruct development.

Speaking at the 2025 IMF–World Bank Annual Meetings in Washington, IMF Managing Director Kristalina Georgieva said Nigeria stands to benefit from the Fund’s renewed focus on tackling illicit finance.

“For countries like Nigeria, tracking illicit financial flows is critical to plugging fiscal leakages that hold back sustainable growth,” Georgieva said.

IFFs ranging from stolen public funds and criminal proceeds to untraceable digital transactions, pose growing risks to fiscal stability, especially in developing economies. Georgieva warned that the rise of digital currencies has made the flows harder to track.

“You may have money that’s simply stolen or diverted into criminal activity. With digital currencies, these transactions can occur without trace,” she said.

The IMF has strengthened its anti-money laundering and financial crime framework, making IFF assessments a standard part of its Article IV economic consultations with member states. For countries requesting IMF financial assistance, program designs will now include specific measures to tackle systemic IFFs.

The Fund is also offering technical assistance and training to help national authorities improve detection and response systems. According to Georgieva, addressing illicit flows is as much about governance as it is about finance.

The IMF’s Governance Diagnostics initiative now works with countries to identify institutional vulnerabilities that allow corruption to thrive. “This is not an audit—it’s about fixing the structural gaps where problems take root,” she added.

The Fund also called for closer collaboration between governments, civil society, and international partners, citing successful partnerships in Kenya and Sri Lanka as examples.

Growth Outlook Revised Upward

Despite concerns over illicit capital movement, the IMF has revised Nigeria’s 2025 GDP growth forecast upward to 3.9%, citing stronger oil production, improving investor sentiment, and continued structural reforms.

The October 2025 World Economic Outlook also raised Nigeria’s 2024 GDP estimate to 4.1%, while projecting 4.2% growth in 2026. The Fund said reforms in the energy and financial sectors have boosted confidence and attracted capital inflows.

Inflation remains a concern, though it is expected to moderate from 31.4% in 2024 to 23.0% in 2025, and further to 22.0% in 2026, as price pressures ease and monetary policy tightens.

Nigeria’s current account surplus is forecast to narrow from 6.8% of GDP in 2024 to 5.7% in 2025, and 3.6% in 2026, due to rising imports.

Part of the improved growth outlook stems from Nigeria’s national accounts rebasing, with 2019 now used as the new base year. The updated data captures sectors like informal agriculture, modular refining, and the digital economy, raising nominal GDP by over 40%.

Regional and Global Trends

The IMF also upgraded Sub-Saharan Africa’s growth forecast to 4.1% in 2025 and 4.4% in 2026, supported by economic reforms in countries like Nigeria and Ethiopia.

Globally, however, growth prospects have dimmed. The IMF revised its 2025 global growth forecast down to 2.8%, citing geopolitical tensions, slowing trade, and continued fallout from global tariff disputes.

Despite global uncertainties, Nigeria’s upward revisions reflect a more resilient economy—one that, according to the IMF, must continue reforms and strengthen oversight to sustain growth and macroeconomic stability.

By:Emeka Anaeto
Source: Vanguard

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The World Bank has called on Nigeria to ensure that recent economic reforms lead to real improvements in people’s lives. This comes as new data shows that 139 million Nigerians are living in poverty.

At the launch of its latest Nigeria Development Update report in Abuja on Wednesday, World Bank Country Director, Mathew Verghis, praised the government’s bold reforms.

“Nigeria has implemented major reforms around the exchange rate and petrol subsidy,” Verghis said. “These policies have laid the foundation for transforming the country’s economic future.”

He said early results are promising. “Growth has picked up, revenues have risen, debt indicators are improving, the FX market is stabilizing, reserves are rising, and inflation is finally beginning to come down,” he added.

Still, Verghis warned that most Nigerians have not yet seen the benefits. “In 2025, we estimate that 139 million Nigerians will be living in poverty. The challenge is clear: how to translate reform gains into better living standards for all.”

The new report, titled “From Policy to People: Bringing the Reform Gains Home,” urges the government to reduce inflation, spend public money more efficiently, and expand support for the poor.

Verghis said food inflation must be tackled urgently. “Food inflation affects everyone but hits the poor the hardest,” he said. “It also threatens to erode political support for reforms.”

He called for a mix of tight monetary policy and structural changes to fix supply and market bottlenecks.

“These are not abstract ideas, they are practical steps that can turn macro-stability into improved livelihoods,” he said.

The World Bank said it remains committed to helping Nigeria succeed. Support will come through policy advice, technical help, and financial aid aimed at building a stronger, fairer economy.

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Previously, all PPP projects regardless of scale required clearance from the Federal Executive Council (FEC), a process that often delayed execution and discouraged smaller-scale initiatives. Under the new directive, MDAs can now approve projects below specified financial limits, enabling faster and more flexible project delivery in line with ICRC guidelines.

The decision, announced following the Nigeria PPP Summit 2025, underscores the administration’s commitment to leveraging PPPs as a central tool in driving national development. President Tinubu had earlier described the ICRC as the “engine room” of Nigeria’s infrastructure transformation, pledging stronger support to expand private sector participation.

Director-General of the ICRC, Dr. Jobson Oseodion Ewalefoh, explained that under the revised framework, parastatals and agencies can independently approve PPP projects valued under ₦10 billion, while ministries can approve up to ₦20 billion. Only projects exceeding these thresholds or those requiring multi-ministerial coordination will continue to require FEC endorsement.

Crucially, all projects must be fully funded by the private sector without any financial guarantees or commitments from public funds. Each proposed project will still undergo ICRC review and must receive a compliance certificate before final approval by MDAs’ newly formed Project Approval Boards.

Dr. Ewalefoh described the new system as a departure from the previous “one-size-fits-all” approach, moving towards a more adaptable and impact-driven model. He noted that this reform would particularly benefit sectors such as health, education, agriculture, and housing by enabling smaller, high-impact projects like rural health centers, classroom blocks, student accommodations, and affordable housing to move forward with reduced bureaucratic hurdles.

He further emphasized that the policy aligns with broader public procurement and investment reforms under President Tinubu’s Renewed Hope Agenda, designed to foster economic growth, create jobs, and improve capital inflows.

“By decentralizing approvals, we are unlocking new investment opportunities and ensuring faster project execution, which is critical for our economic realities today,” Dr. Ewalefoh stated.

The ICRC, he affirmed, will continue to oversee, guide, and regulate the PPP ecosystem, working closely with agencies such as the Bureau of Public Procurement (BPP), Ministry of Finance Incorporated (MOFI), and the Bureau of Public Enterprises (BPE).

Dr. Ewalefoh called on MDAs to leverage the newly approved thresholds and upcoming guidelines to deliver critical infrastructure projects more efficiently. He urged them to embrace PPPs as a vital tool for realizing President Tinubu’s Renewed Hope Agenda and advancing national development objectives.

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