Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Nigeria on June 1, 2026.
Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult. Poverty reached 63 percent (national poverty line) and 27 million Nigerians are estimated to have faced food insecurity in the fall of 2025.
Higher global fuel, food and fertilizer prices will improve exports and fiscal revenues, but also give rise to inflationary pressures, potentially aggravating poverty and food insecurity. Growth is estimated at 4 percent in 2025 and projected at 4.1 percent in 2026, as headwinds from higher food and transport costs weigh on economic activity. After being on a declining trend for over a year, inflation nudged up to 15.4 percent year-on-year in March 2026 as the jump in international fuel and food prices started hitting Nigeria. While the external shock to fuel and food prices will push up inflation in the short run, the disinflation path is projected to continue in the second half of the year.
Gross international reserves increased to US$46 billion in 2025 from US$40 billion at end-2024, supported by the current account surplus, net purchases of central bank open market operations by non-residents, and a Eurobond issuance. Net international reserves increased to US$35 billion at end-2025 from US$23 billion at end-2024.
The overall deficit of the consolidated government is estimated to have increased to 4.4 percent of GDP in 2025. While non-oil revenues were on target, oil revenues fell short of budget expectations. The shortfall was offset by under execution of reported capital expenditures, while some additional capital spending that took place outside the budget perimeter has now been included in the budget through the repeal and reenactment bills.
Risks to the outlook come from the uncertain global environment, in particular the outlook for fuel and food prices. The domestic security situation is another risk to people and economic activity. On the upside, quick gains on revenue mobilization would create additional budget space for growth-enhancing priority spending.
Executive Board Assessment[2]
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities’ reforms over the past three years that have strengthened macroeconomic stability and resilience. Directors cautioned that conditions remain difficult for many Nigerians, with poverty and food insecurity likely to worsen in the current external environment. Tight macroeconomic policies and continued reforms supported by technical assistance from the Fund and other partners will be crucial to preserve stability and boost inclusive growth.
Directors called for a neutral fiscal stance in 2026 to support macroeconomic stability and disinflation, while protecting priority and social spending. They welcomed the recent tax reforms, noting that additional tax policy measures may be needed over the medium term, including to fund a scaled up cash transfer program to provide relief to the most vulnerable. Highlighting concerns about off‑budget spending and complex financing instruments, they called for accelerating reforms to strengthen the budget process, public financial management, fiscal reporting and risk framework, transparency, and accountability.
Directors commended the authorities’ success in bringing down inflation, while noting renewed external inflationary pressures. They agreed that the Central Bank of Nigeria should maintain a tight monetary policy stance with a data‑dependent approach until disinflation is entrenched and inflation expectations are anchored. Directors welcomed progress toward adopting inflation targeting and encouraged steps to strengthen monetary transmission and communication.
Directors welcomed the authorities’ commitment to the flexible exchange rate regime, recognizing that foreign exchange interventions can play a complementary role under certain circumstances. Directors called for reducing reliance on portfolio flows with roll‑over risk, phasing out remaining exchange restrictions, capital flow management measures, and remaining multiple currency practices as conditions permit.
Directors welcomed that the financial system remains resilient, helped by the recent recapitalization of banks, while encouraging continued vigilance of rising NPLs and the sovereign‑bank nexus. They encouraged the authorities to accelerate Basel III implementation, including the countercyclical capital buffer and the liquidity coverage ratio. Directors stressed the importance of further strengthening supervision and bringing stablecoin and other crypto‑asset activities into the regulatory perimeter. They welcomed Nigeria’s removal from the FATF grey list and noted that sustained implementation will be key to preserving recent gains in financial integrity.
Directors emphasized the need for reforms to support inclusive growth and diversification. They flagged governance, security, electricity, agriculture, infrastructure, and human capital as priority areas. Directors called for strengthening macroeconomic statistics to support policy formulation and implementation. Some Directors stressed the importance of integrating climate considerations into macroeconomic policy and development policies.
The next Article IV Consultation with Nigeria is expected to be held on the standard 12‑month cycle.
read more: https://www.imf.org/en/news/articles/2026/06/09/pr26190-nigeria-imf-executive-board-concludes-2026-article-iv-consultation-with-nigeria
