The International Monetary Fund (IMF) has called on the Nigerian government to prioritise food security and reduce national fragility as part of a broader strategy to enhance economic growth.
This recommendation is outlined in a statement released after the conclusion of the IMF Executive Board’s 2025 Article IV Consultation with Nigeria.
According to the document, key priorities for the Nigerian government include tackling insecurity, streamlining bureaucratic processes, improving agricultural productivity, bridging infrastructure deficits, especially in electricity, investing in health and education, and boosting resilience to climate-related shocks.
The Board praised Nigeria’s implementation of significant reforms over the past two years, noting progress in macroeconomic stability and resilience. However, it warned that these gains have not yet translated into widespread benefits for the population and flagged rising economic uncertainty and growing downside risks.
“Downside risks have increased with heightened global uncertainty. A further decline in oil prices or an increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability, and exacerbate exchange rate pressures. A deterioration of security could also impact growth and worsen food insecurity,” the directors noted.
To counter these risks, the IMF stressed the need for agile and responsive policymaking aimed at preserving macroeconomic stability, encouraging inclusive growth, and reducing poverty.
The directors also called for the elimination of structural barriers to private credit to support wider economic activity.
They expressed support for the Central Bank of Nigeria’s (CBN) continued tight monetary policy stance and urged its maintenance until disinflation becomes firmly rooted. The Board welcomed the end of deficit monetisation and ongoing reforms to strengthen central bank governance, which it described as essential for effective inflation targeting.
Other positive steps noted include efforts to rebuild foreign reserves, restore investor confidence, and improve transparency in the foreign exchange market through recent reforms that enhance price discovery and liquidity.
The IMF also encouraged the adoption of a strong foreign exchange intervention framework to contain excessive volatility, underscoring the importance of the exchange rate as a key shock absorber. Directors endorsed a phased and sequenced removal of capital flow management measures currently in place.
On fiscal policy, the Board advised a neutral approach that maintains macroeconomic stability while prioritising development-focused investments and expanding social protection through accelerated cash transfers to the most vulnerable.
The IMF commended the progress of Nigeria’s tax reform legislation, describing it as critical to raising revenue, sustaining development spending, and ensuring debt sustainability.
Further recommendations included strengthening the banking sector by raising minimum capital requirements, promoting financial inclusion, and enhancing capital market development. The Board also emphasised the need for risk-based supervision across the mortgage, consumer lending, fintech, and crypto sectors.
The directors acknowledged strides made in improving Nigeria’s Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regime, while urging continued work to resolve outstanding concerns that would enable Nigeria’s removal from the Financial Action Task Force (FATF) grey list.
Finally, the IMF reaffirmed its commitment to providing capacity development support and highlighted the need for better data quality to facilitate evidence-based policymaking.
(NAN)