‎By Onu Okorie

‎

‎The International Monetary Fund (IMF) has praised Nigeria’s economic reforms over the past three years, while sounding a stark warning that poverty and food insecurity are likely to worsen, as the country navigates a turbulent global environment.

‎In its Article IV report, the Fund said Nigeria’s reform drive had delivered improved macroeconomic outcomes and built greater economic resilience — but acknowledged that the gains have yet to reach millions of ordinary citizens. Poverty currently stands at 63 percent by the national poverty line, and an estimated 27 million Nigerians faced food insecurity in the final months of 2025.

‎”Conditions remain difficult for many Nigerians,” the IMF’s Executive Directors said, cautioning that the situation could deteriorate further given mounting external pressures.

‎The Fund estimated Nigeria’s economic growth at 4 percent in 2025, with a modest uptick to 4.1 percent projected for 2026. However, it flagged that rising food and transport costs continue to weigh on economic activities and temper the broader growth outlook.

‎Inflation, which had been on a downward trend for over a year, edged back up to 15.4 percent year-on-year in March 2026 as surging international fuel and food prices began filtering through the domestic economy. The IMF said the spike is expected to be temporary, projecting that the disinflation path will resume in the second half of the year.

‎On the external front, Nigeria’s gross international reserves rose to $46 billion in 2025, up from $40 billion at the end of 2024, buoyed by a current account surplus, non-resident purchases of central bank open market instruments and a Eurobond issuance. Net international reserves climbed even more sharply, from $23 billion at end-2024 to $35 billion by the close of 2025.

‎The fiscal picture, however, presented a less encouraging story. The consolidated government deficit widened to an estimated 4.4 percent of GDP in 2025. While non-oil revenues met targets, oil revenues fell short of budget expectations. The shortfall was partially offset by under-execution of capital expenditures, though the IMF noted that additional capital spending conducted outside the formal budget perimeter has since been brought on record through repeal and reenactment legislation.

‎Looking ahead, the IMF called for a neutral fiscal stance in 2026 to anchor macroeconomic stability and sustain the disinflation drive, while ring-fencing priority social spending. Directors stressed that tight macroeconomic policies and continued structural reforms — backed by technical assistance from the Fund and other partners — would be essential to preserve stability and deliver more inclusive growth.

‎The Fund also warned that higher global prices for fuel, food and fertiliser, while boosting Nigeria’s export earnings and fiscal revenues, simultaneously risk stoking inflationary pressures that could deepen poverty and food insecurity among the most vulnerable.

‎The IMF identified the uncertain global outlook — particularly the trajectory of fuel and food prices — as the primary risk to Nigeria’s economic path. Domestic security challenges were flagged as an additional threat to both lives and economic activity. On a more optimistic note, the Fund said swift progress on revenue mobilisation could unlock additional fiscal space for growth-enhancing public investment.

‎The report reflects a cautious but not pessimistic assessment: Nigeria’s reform story is gaining credibility in the eyes of international observers, but the dividends of macroeconomic stability must translate more urgently into relief for the tens of millions still struggling with poverty and hunger.