The Nigerian government has been advised to consider agile policy making for macroeconomic stability and poverty reduction.
In a statement issued on Wednesday on the conclusion of its 2025 Article IV Mission with Nigeria, the International Monetary Fund (IMF) stated that the federal government should also endeavour to create enabling conditions for investment to boost economic growth.
The global lender praised the administration of President Bola Tinubu for implementing some bold economic reforms in the last two years, saying these policies have improved macroeconomic stability and enhanced resilience.
A few of these policies include the tax reform, fuel subsidy removal, liberalisation of the foreign exchange (FX) market, and the stoppage of monetary financing of the fiscal deficit, among others.
The IMF said these actions by the government have strengthened investor confidence, helping the nation to successfully tap the Eurobond market and leading to a resumption of portfolio inflows.
However, it noted that “poverty and food insecurity have risen” because “these gains have yet to benefit all Nigerians.”
It warned that the country may struggle with earnings and economic downturn if crude oil prices in the global market continue to decline.
“A further decline in oil prices or 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,” the IMF said in a statement made available to Business Post.
It called for a neutral fiscal stance to safeguard macroeconomic stabilization with priority given to investments that enhance growth, tasking the government to accelerate “the delivery of cash transfers to assist the poor.”
As for the recently signed tax reform laws, the IMF praised the government for this, describing it as “an important step towards enhancing revenue mobilization and creating fiscal space for development spending, while preserving debt sustainability.”