By Bassey Udo
Nigeria reaffirmed its determination to sustain the momentum of its economic reform programme, despite criticism by the International Monetary Fund (IMF) that poverty, food insecurity, and domestic security concerns have persisted.
The IMF in its 2026 Article IV Consultation report on Nigeria published on Monday in Washington DC highlighted these concerns as posing significant risks to the country’s overall growth outlook.
The Fund’s Executive Board concluded the Article IV consultation with Nigeria on June 1, 2026 with a largely positive assessment of the macroeconomic progress recorded under President Bola Ahmed Tinubu’s administration over the past three years, although it warned that the gains were yet to translate into meaningful relief for millions of Nigerians living in poverty.
However, in a swift reaction to the assessment report, the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the Federal Government welcomed the IMF’s report as independent validation of the impact of its reforms, which he insisted were yielding positive results, amid pains.
“The report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Tinubu are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth,” Mr Oyedele said in a statement.
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Although the IMF’s assessment noted that strong reforms over the last three years yielded improved macroeconomic outcomes and built greater resilience into the Nigerian economy, specifically improvements in foreign exchange market functioning, stronger external buffers, ongoing fiscal and revenue reforms, banking sector resilience, and growing macroeconomic stability, it highlighted the human cost of the transition.
The report said poverty reached and unprecedented 63 percent level (using the national poverty line), with more than 27 million Nigerians facing food insecurity in the second half of 2025.
The IMF warned that although higher prices of petroleum products, food, and fertiliser as a result of the Middle East crisis were beneficial to Nigeria’s export earnings and fiscal revenues, they were stirring inflationary pressures capable of aggravating poverty and food insecurity among vulnerable Nigerians.
On growth, the IMF estimated that Nigeria’s real GDP, which expanded by 4 percent in 2025, and projected to grow at 4.1 percent in 2026, has headwinds from higher food and transport costs weighing on overall economic activity.
Besides, inflation, which maintained a declining trend for over a year, climbed back to 15.4 percent year-on-year in March 2026, as rising global fuels and food prices began to impact the domestic economy.
Regardless, the IMF forecasted that the disinflation trend would resume in the second half of the year, with gross foreign reserves rosing to $46 billion in 2025, from $40 billion at the close of 2024, bouyed by a current account surplus, non-resident purchases of Central Bank of Nigeria open market operations instruments, and a Eurobond issuance, with net foreign reserves growing sharply to $35 billion, from $23 billion over the same period.
The IMF noted that the domestic security situation posed a significant risk to both people and economic activity, adding that insecurity remained a major structural constraint on investment and productivity, particularly in agriculture.
Welcoming the IMF’s overall assessment, the Federal Government acknowledged the persistence of poverty and food insecurity, noting that per capita income grew by nearly 10 percent in 2025, saying this was indicative of a marked reduction in poverty levels.
Nevertheless, the government conceded that macroeconomic stability alone was not sufficient to make the difference, as growth must translate into tangible improvements in the welfare and quality of life of ordinary Nigerians.
To address this, Oyedele said the government was strengthening targeted social protection programmes, including direct cash transfers to vulnerable households, support for small businesses, student financing through the Nigerian Education Loan Fund (NELFUND), consumer credit initiatives, and investments in healthcare.
These interventions, the Minister said, were aimed at expanding economic opportunities and improving livelihoods at the grassroots level.
On food security and agriculture, the Minister said government was scaling up investments through the Renewed Hope National Agricultural Mechanisation Programme and other initiatives designed to improve productivity, expand irrigation and dry-season farming, enhance access to inputs and financing, strengthen value chains, and moderate food inflation while creating jobs and raising rural incomes.
On fiscal pressures and off-Budget spending, the IMF’s report noted that the overall deficit of Nigeria’s consolidated government increased to an estimated 4.4 percent of GDP in 2025, while non-oil revenues managed to set targets as against oil revenues, which fell short of budget expectations.
The shortfall was partially offset by under-execution of reported capital expenditures, though the IMF noted that some additional capital spending occurred outside the budget confines and has since been brought within it through the repeal and re-enactment bills.
The IMF Executive Directors called for a neutral fiscal stance in 2026 to support macroeconomic stability and disinflation, while protecting priority and social spending.
Also, they highlighted concerns about off-budget spending and complex financing instruments, calling for accelerated reforms to strengthen the budget process, public financial management, fiscal reporting, and accountability frameworks.
In addition, the Directors noted that additional tax policy measures may be required over the medium term, including to fund a scaled-up cash transfer programme for the most vulnerable.
Oyedele said the Federal Government, was already taking steps to strengthen fiscal data integrity, improve coordination among relevant institutions, and deepen public financial management reforms, describing efforts to improve fiscal reporting systems and ensure that economic and fiscal statistics met the highest international standards as ongoing.
While commending the CBN entral Bank of Nigeria for its progress in bringing down inflation, the IMF noted renewed external inflationary pressures,with.
the Directors agreeing that the CBN should maintain a tight monetary policy stance with a data-dependent approach until disinflation was entrenched and inflation expectations firmly anchored.
The IMF welcomed progress toward adopting an inflation targeting framework and encouraged steps to strengthen monetary policy transmission and communication.
On the exchange rate, the IMF Directors welcomed Nigeria’s commitment to a flexible exchange rate regime, while calling for a reduction in reliance on portfolio flows that carry rollover risk, and the phasing out of remaining exchange restrictions and multiple currency practices as conditions permit.
The government noted that despite the Middle East conflict creating new inflationary pressures globally through higher energy prices, rising food costs, and disruptions to supply chains, Nigeria demonstrated notable resilience.
The foreign exchange parallel market premium has remained below five percent, sovereign spreads have stayed broadly stable, and investor confidence has been preserved.
Looking ahead, the IMF projected continued economic growth above four percent, improving external reserves, rising investment, and strengthening fiscal revenues over the medium term, with public debt already declining relative to GDP and reserve buffers strengthening considerably.
Gross foreign reserves were projected to rise to $58 billion by end-2026 and $62 billion by end-2027, while real GDP growth was expected to reach 4.3 percent in 2027.
The government said these projections, which complement recent sovereign credit rating upgrades by leading international rating agencies, reflect the growing resilience of the Nigerian economy and the positive impact of ongoing reforms.
Mr. Oyedele said the Federal Government remained firmly committed to maintaining macroeconomic stability, accelerating inclusive growth, deepening structural reforms, expanding infrastructure, and enhancing human capital development and job creation.
“While challenges remain, the direction is clear and the foundations are stronger,” the minister said. “The ultimate objective of these reforms is not merely improved economic indicators, but better outcomes for all Nigerians — lower inflation, decent jobs, higher incomes, greater economic opportunity, and a better quality of life.”
