The Executive Board of the International Monetary Fund (IMF) has concluded the 2025 Article IV Consultation with Nigeria, praising the country’s monetary and fiscal authorities for successfully implementing significant reforms over the past two years.
The IMF team also welcomed the related gains in macroeconomic stability and resilience.
A statement issued in Washington, DC, on July 2, 2025, noted that the Central Bank of Nigeria was appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched.
The IMF recognised measures to strengthen the banking system, including the ongoing recapitalisation process. They welcomed the CBN’s efforts to enhance financial inclusion and promote capital market growth, while emphasising the need to adopt a robust risk-based supervision for mortgage and consumer lending schemes and the fintech and crypto sectors.
The IMF team also commended the efforts to strengthen the AML/CFT framework and stressed the importance of resolving remaining weaknesses to exit the FATF grey list as soon as possible. They applauded discontinuing deficit monetisation and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting.
According to the statement, the Directors also lauded the steps taken by the authorities to build reserves and bolster market confidence. They praised the Bank’s reforms in the foreign exchange market that supported price discovery and liquidity. They called for the implementation of a robust foreign exchange intervention framework focused on containing excess volatility, emphasising that the exchange rate is an important shock absorber.
“The Nigerian authorities have implemented major reforms over the past two years, improving macroeconomic stability and enhancing resilience. The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market. Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows.
“Growth accelerated to 3.4 per cent in 2024, driven mainly by increased hydrocarbon output and the vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity,” the statement added.
The Article IV Report also projected that Real GDP will grow by 3.4 per cent in 2025, supported by the new domestic refinery, higher oil production, and a strong services sector. Amid a complex and uncertain external environment, medium-term growth is expected to remain around 3½ per cent, supported by domestic reform gains.
The IMF further observed that gross and net international reserves rose in 2024, supported by a strong current account surplus and better portfolio inflows, adding that Reforms to the FX market and foreign exchange interventions had stabilised the naira.
The report further noted that Naira stabilisation and improvements in food production reduced inflation to 23.7 per cent year-on-year in April 2025, down from a 31 per cent annual average in 2024, according to the back-casted rebased CPI index released by the Nigerian Bureau of Statistics.
It was noted that inflation should decline further in the medium term with continued tight macroeconomic policies and a projected easing of retail fuel prices.
The Article IV report stated that Fiscal performance improved in 2024, adding that revenues benefited from naira depreciation, enhanced revenue administration, and higher grants, which more than offset rising interest and overhead spending.
The report also noted that 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 impact growth and food insecurity.
While observing that the gains had yet to benefit all Nigerians, coupled with heightened economic uncertainty and significant downside risks, the IMF Directors emphasised the importance of agile policymaking to safeguard and enhance macroeconomic stability, create enabling conditions to boost growth, and reduce poverty. They also urged the phasing out of existing capital flow management measures in a properly timed and sequenced manner.
The Report also called for a neutral fiscal stance to safeguard macroeconomic stabilisation, prioritising investments that support growth. They also urged the accelerated delivery of cash transfers to help the poor.
Meanwhile, the IMF Directors commended the authorities for advancing the tax reform bill, which is a significant step towards boosting revenue mobilisation and creating fiscal space for development spending while maintaining debt sustainability.
To lift Nigeria’s growth outlook, improve food security, and reduce fragility, the report highlighted the importance of tackling security, red tape, agricultural productivity, infrastructure gaps, including boosting electricity supply, as well as improved health and education spending, and making the economy more resilient to climate events.
They noted that addressing structural impediments to private credit extension is also needed to support growth. The Directors noted the Fund’s capacity development support for the authorities’ reform efforts and emphasized that improving data quality is essential for effective, evidence-based policymaking.
