An International Monetary Fund (IMF) team, led by Axel Schimmelpfennig, the mission chief for Nigeria, completed its 2025 Article IV Consultation with Nigeria on April 15, following discussions in Lagos and Abuja from April 2–15. The IMF’s preliminary findings highlight progress in Nigeria’s economic reforms but also point to significant risks ahead, including external challenges and domestic concerns such as food insecurity and poverty.
The IMF staff commended Nigeria’s efforts to stabilize its economy, noting key reforms such as the cessation of central bank financing of the fiscal deficit, the removal of costly fuel subsidies, and improvements in the foreign exchange market. These steps, the IMF team said, have better positioned Nigeria to withstand external shocks, notably the elevated global risk sentiment and fluctuations in oil prices, which have placed pressure on the economy.
However, the outlook remains clouded by uncertainty. Global factors, including the ongoing volatility in oil markets, are expected to weigh heavily on the country’s economic prospects. The IMF emphasized that macroeconomic policies must be strengthened further to bolster resilience, reduce inflation, and foster growth driven by the private sector.
“The Nigerian authorities have made notable progress, but significant challenges remain,” said Schimmelpfennig in a statement issued at the end of the mission. “While the country’s fiscal position has improved, poverty and food insecurity remain widespread, preventing the benefits of these reforms from reaching all Nigerians.”
Looking ahead, the IMF highlighted the need for Nigeria’s government to implement its 2025 budget with flexibility in response to lower international oil prices. Maintaining a neutral fiscal stance, the IMF suggested, would allow for supportive monetary policy aimed at bringing down inflation. The fund also recommended that savings generated from the removal of fuel subsidies be channeled into the budget, with a focus on maintaining critical public investments that can drive economic growth.
In terms of monetary policy, the IMF underscored the importance of continuing the Central Bank of Nigeria’s (CBN) tight stance to control inflation. The IMF also recommended that the CBN announce a disinflation path to serve as an intermediate target, which could help anchor inflation expectations and guide the economy through a period of heightened uncertainty.
The IMF’s report, which will be submitted for discussion by the Executive Board, also stressed that fiscal measures should include expanded cash transfer programmes, particularly under the World Bank-supported initiative, to provide relief to those affected by food insecurity.
The IMF’s mission chief concluded by reiterating that while the reform efforts since 2023 have placed Nigeria in a better position to manage external pressures, sustaining these efforts will be essential to ensuring long-term stability and inclusive growth.
