Following its latest Article IV consultation, which concluded on June 1, the IMF on Tuesday noted that growth has remained relatively steady, estimated at 4% in 2025 and projected to rise slightly to 4.1% in 2026. The Fund said this reflects ongoing reforms, although higher food and transport costs are expected to weigh on economic activity.
Despite these gains, poverty and food insecurity remain major concerns. The IMF said that about 63% of Nigerians are living below the national poverty line, while an estimated 27 million people faced food insecurity in late 2025. Rising global prices for fuel, food and fertiliser are expected to put further pressure on households, contributing to higher inflation.
Inflation, which had been declining, rose to 15.4% year-on-year in March 2026 as global price increases filtered into the domestic economy. The IMF said inflation is expected to ease later in the year, but emphasised the need for continued tight monetary policy to keep price pressures under control.
On the external front, Nigeria’s foreign exchange reserves improved, reaching $46 billion in 2025, up from $40 billion the previous year. The increase was supported by stronger exports, capital inflows and a Eurobond issuance.
The IMF also highlighted fiscal challenges, noting that the overall government deficit rose to 4.4% of gross domestic product in 2025. While non-oil revenues met expectations, lower-than-anticipated oil revenues contributed to the shortfall. Directors called for improved fiscal discipline, stronger revenue mobilisation and enhanced transparency in public spending.
The Fund recommended maintaining a neutral fiscal stance in 2026, while protecting social and priority spending. It also highlighted the importance of expanding targeted support programmes, particularly for vulnerable households.
Looking ahead, the IMF said risks to the outlook include global uncertainty, particularly fuel and food price volatility, as well as domestic security challenges. It stressed that continued reforms, including improvements in governance, infrastructure, electricity supply and human capital, will be critical to supporting inclusive growth and long-term economic stability.
–IMF/ChannelAfrica–
