IMF praises Tinubu’s reforms but says 63% of Nigerians live in poverty

The International Monetary Fund (IMF) has endorsed Nigeria’s economic reforms under President Bola Tinubu, saying they have strengthened macroeconomic stability and improved the country’s resilience to shocks, but warned that millions of Nigerians continue to face severe hardship as poverty and food insecurity remain widespread.

In its latest Article IV Consultation released Tuesday, the IMF said reforms implemented over the past three years have delivered “improved macroeconomic outcomes,” helping to stabilise public finances, rebuild foreign reserves and reduce inflation from its recent highs.

However, the Washington-based lender noted that the benefits have yet to translate into better living conditions for many citizens.

“Conditions for many Nigerians remain difficult,” the IMF said, estimating that poverty reached 63% under the national poverty line, while about 27 million people faced food insecurity in late 2025.

The assessment comes as the Tinubu administration continues to defend major reforms, including fuel subsidy removal and foreign exchange market liberalisation, arguing that short-term hardship is necessary to restore economic stability and unlock long-term growth.

The IMF estimated that Nigeria’s economy expanded by 4% in 2025 and projected growth of 4.1% in 2026, supported by stronger oil production and continued activity in the non-oil economy. Crude oil production is expected to rise from 1.64 million barrels per day in 2025 to 1.71 million barrels per day this year.

The Fund also highlighted improvements in Nigeria’s external position.

Gross international reserves rose to $46 billion at the end of 2025 from $40 billion a year earlier, supported by a current account surplus, foreign investor inflows and a Eurobond issuance. Net international reserves climbed to $35 billion from $23 billion over the same period.

The IMF projected reserves could rise further to $58.1 billion in 2026.

Inflation risks persist

Despite progress in reducing inflation, the Fund warned that fresh increases in global fuel, food and fertiliser prices could reignite price pressures.

After declining for more than a year, inflation edged up to 15.4% year-on-year in March 2026 as higher international fuel and food costs filtered into the economy. While the IMF expects the broader disinflation trend to resume in the second half of the year, it urged policymakers to remain vigilant.

The IMF directors said the Central Bank of Nigeria should maintain a tight monetary policy stance until inflation expectations are firmly anchored and welcomed progress toward an inflation-targeting framework.

The Fund noted that Nigeria’s consolidated fiscal deficit widened to an estimated 4.4% of GDP in 2025 as oil revenues fell below budget expectations despite stronger non-oil tax collections.

While commending recent tax reforms, IMF directors suggested additional revenue measures may be needed in the medium term, particularly if the government intends to expand social protection programmes and cash transfers for vulnerable households.

The Board also expressed concern about off-budget spending and complex financing arrangements, calling for stronger fiscal transparency, accountability and public financial management reforms.

Looking ahead, the IMF said Nigeria must sustain reforms in governance, security, electricity, agriculture, infrastructure and human capital to achieve stronger and more inclusive growth.

The Fund also encouraged authorities to reduce dependence on volatile portfolio inflows, maintain exchange-rate flexibility and continue phasing out remaining foreign exchange restrictions.

While welcoming the recent recapitalisation of banks and Nigeria’s removal from the Financial Action Task Force grey list, directors called for closer supervision of the financial sector and tighter regulation of crypto-asset activities.