The International Monetary Fund (IMF) has called on the Nigerian government to strengthen fiscal discipline and channel more resources into infrastructure and education to consolidate recent macroeconomic gains and promote inclusive growth.
Speaking during the Fiscal Monitor session at the ongoing World Bank/IMF Annual Meetings in Washington D.C., Davide Furceri, Division Chief at the IMF’s Fiscal Affairs Department, said Nigeria’s fiscal and structural reforms were well aligned with monetary policies aimed at curbing inflation and stabilising the economy. However, he urged the government to deepen reforms and focus on the quality of spending to ensure sustainable development.
“Nigeria has made significant progress in recent years. Several laws have been passed to streamline the tax code, reduce tax expenditures, and ease the compliance burden for businesses. These are steps in the right direction,” Furceri said.
He stressed the need for greater efficiency in public finance management, particularly in how resources are allocated and spent. “Optimising how resources are allocated and spent could deliver substantial economic and social gains. In addition, it is important to increase social spending, particularly to support vulnerable households and ensure inclusive growth,” he added.
The IMF recently raised Nigeria’s growth forecast to 3.9 per cent in 2025 and 4.1 per cent in 2026, citing improved macroeconomic outlook under ongoing reforms.
Vitor Gasper, Director of the IMF Fiscal Affairs Department, noted that Nigeria must strengthen fiscal policy and improve the quality of spending to stimulate growth while maintaining debt sustainability. He warned that the country’s debt, which stood at ₦152.3 trillion as of June 2025, could become unsustainable if spending continues to outpace tax revenues.
“Persistent spending above tax revenues will push debts higher, threatening sustainability and financial stability,” Gasper said. He advised that Nigeria redirect expenditure toward infrastructure and education “by changing the composition of public spending while keeping the overall envelope fixed,” adding that preparing fiscal buffers against future shocks is crucial.
“The fiscal equation is hard to square politically, but the time to prepare is now,” he noted. “Improving growth prospects and enhancing public trust in government help balance the fiscal equation. Fiscal policy is structural policy.”
Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, told investors in Washington that ongoing reforms were yielding positive results, with improved macroeconomic resilience, stronger foreign reserves, and reduced inflationary pressures.
Speaking at an investors’ forum on the sidelines of the Annual Meetings, Cardoso said the CBN was developing a framework for currency swap agreements that would strengthen Nigeria’s position in international trade and financial cooperation.
“We are building a more durable and competitive economy. Difficult reforms have produced stability in the exchange rate, stronger economic buffers, and a dip in inflation numbers,” he said.
Cardoso disclosed that Nigeria’s foreign reserves have climbed to a five-year high of $43.4 billion, enough to cover 11 months of imports, while the government is targeting about 4 per cent growth, driven by expansion in the non-oil sector. He added that Nigeria’s unified exchange rate had restored transparency and helped clear outstanding foreign exchange obligations, giving investors renewed confidence.
“With a competitive naira, foreign direct investment prospects have risen. The unification has enabled businesses—from manufacturers to airlines—to plan and invest with greater certainty,” Cardoso stated.
CBN Deputy Governor for Economic Policy, Mohammed Sadi Abdullahi, said capital flows had rebounded significantly, with average monthly turnover rising to $8.6 billion in 2025, up from $5.5 billion the previous year, reflecting a more robust and transparent financial market.
Minister of State for Finance, Dr. Doris Uzoka-Anite, reaffirmed the government’s commitment to strategic engagement with global financial institutions to sustain reform momentum. She said Nigeria’s active participation in the Washington meetings underscored growing international confidence in its economic agenda and determination to build a resilient, competitive, and inclusive economy.
“The global spotlight on Nigeria reflects our resolve to advance sustainable growth through forward-looking economic policies,” she said.
In its latest Fiscal Monitor report, the IMF projected global public debt to exceed 100 per cent of GDP by 2029, its highest level since 1948. It warned that the debt path had steepened significantly since the pandemic, with major economies facing growing fiscal pressures.
The report emphasised that governments can boost long-term growth by redirecting public spending toward infrastructure, education, health, and research without necessarily increasing total expenditure.
“Closing gaps in efficiency and improving the composition of spending can deliver significant output gains, with institution-building being the most effective strategy,” the IMF stated.
