The International Monetary Fund (IMF) has warned Nigeria and other Sub-Saharan Africa (SSA) countries not to prioritise higher earnings over the poor living condition of their citizens so as not to trigger social unrest.
This call came from the Bretton Woods institution in its World Economic Outlook (WEO), July 2025 edition, where it upgraded its forecasts for Nigeria’s economic growth for 2025 and 2026 to 3.4 per cent and 3.2 per cent, respectively.
In the same vein, the IMF raised its forecast for the Sub-Saharan African region to 4.0 per cent for 2025 and 4.3 per cent for 2026, representing a 0.2 percentage point and 0.1 percentage point increase from 3.8 per cent and 4.2 per cent, respectively, projected in the April 2025 WEO.
“Growth is expected to be relatively stable in 2025 in sub-Saharan Africa at 4.0 per cent, before picking up to 4.3 per cent in 2026,” the IMF said.
However, the multilateral institution called for urgent structural and institutional reforms across SSA as the region grapples with a complex mix of economic challenges.
Commenting on the SSA region, Division Chief, Research Department, Ms Deniz Igan said: “Given the challenges Sub-Saharan Africa is facing, this is an important pillar for renewed growth in the region. There’s a need for both structural and institutional reforms. And what we mean there is to give some specific examples.
“Further, regional trade integration is one. More investment in infrastructure transportation is another one. And reform of state-owned enterprises, again, especially in the energy sector and transportation sector, is another priority.”
Ms Igan also stressed the importance of equitable fiscal reforms, noting that efforts to raise revenues must avoid deepening inequality or triggering social unrest.
She advocated the removal of poorly targeted tax exemptions, greater reliance on progressive income taxes, and the need to build public trust through transparent governance. According to her, engaging with stakeholders and sequencing reforms carefully would be essential to protect vulnerable groups and ensure broad-based support for policy changes.
“Now we understand that on the fiscal front, with high debt levels as well, there’s a need for mobilising revenues, and that can generate a sense of unfairness and inequity that could create social backlash.
“And on that front, our advice has been for the design of fiscal reforms that are equitable, that are efficient, and more specifically, there. What we have in mind is removing poorly targeted exemptions in the tax code, making use of progressive income taxes much more, and building trust and support, as we had covered in detail in our October 2024 report in one of our analytical chapters, by engaging with stakeholders, hearing what they need, improving governance and protecting the vulnerable, and at same time, bundling, sequencing and pacing different measures to make sure that the most vulnerable in the society are protected.”