Nigeria’s sweeping economic reforms over the past three years are beginning to stabilise the economy and strengthen investor confidence, but poverty and food insecurity remain widespread, the International Monetary Fund (IMF) said on Tuesday.
In its latest Article IV consultation report on Africa’s largest economy, the IMF said policy changes introduced since 2023 had improved macroeconomic outcomes and built greater resilience to external shocks, but warned that conditions for many Nigerians remain difficult.
“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult,” the Fund said.
It estimated that about 63 percent of Nigerians live below the national poverty line, while 27 million people experienced food insecurity in late 2025, underscoring the scale of hardship in the country despite recent policy gains.
Nigeria, Africa’s most populous nation, has implemented a series of far-reaching reforms under President Bola Tinubu, including the removal of long-standing fuel subsidies, the unification of exchange rates, monetary policy tightening and tax system adjustments.
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The government has also embarked on banking and insurance sector recapitalisation efforts as part of a broader strategy aimed at achieving a trillion-dollar economy by 2030.
While the reforms have been praised by international financial institutions for improving investor sentiment, they have also contributed to a sharp rise in the cost of living, driven largely by higher fuel, food and transport prices.
The IMF noted that recent global increases in fuel, food and fertiliser prices could provide some fiscal relief through higher export earnings and government revenues, but warned they would likely add to inflationary pressures in the short term.
“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,” the Fund said.
It projected Nigeria’s economy to grow by 4.1 percent in 2026, slightly above the 4.0 percent forecast for 2025, reflecting modest improvements in output and stability.
However, the IMF cautioned that persistent inflationary pressures, particularly from food and transportation costs, could constrain household consumption and limit broader economic activity.
Nigeria has been grappling with elevated inflation, currency volatility and weak purchasing power, even as policymakers highlight progress in stabilising key macroeconomic indicators and attracting foreign investment.
The Fund said that despite progress in stabilisation efforts, the benefits of reforms have yet to fully translate into improved living standards for the majority of citizens.
It also warned that global shocks, including geopolitical tensions and volatility in energy markets, could threaten the fragile recovery.
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The Nigerian government welcomed the IMF assessment, describing it as an endorsement of its reform agenda.
Finance Minister and Coordinating Minister of the Economy Wale Edun said the report confirmed improvements in macroeconomic stability, foreign exchange market efficiency and investor confidence.
He said the narrowing gap between official and parallel exchange rates, alongside relatively stable sovereign spreads, reflected the impact of recent policy adjustments.
“The report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth,” he said.
The government said it remains focused on ensuring that economic gains translate into tangible improvements in living standards through targeted social protection programmes.
These include expanded cash transfer schemes for vulnerable households, student loan initiatives, consumer credit programmes and increased investment in healthcare and small business support.
Officials said the ultimate goal of the reform programme is not only to improve macroeconomic indicators but also to reduce inflation, create jobs and raise incomes across the country.
Economists say the challenge for Nigeria will be sustaining reform momentum while addressing deep structural inequalities and ensuring that growth is more broadly shared across the population.
