Nigeria’s participation at the 2025 Annual Meetings of the International Monetary Fund (IMF) and World Bank drew both commendation and caution, as global financiers praised the country’s reform momentum but urged vigilance over rising debt costs, oil sector fragility, and weak revenue performance.
In its World Economic Outlook and Fiscal Monitor released during the meetings, the IMF raised Nigeria’s 2025 growth forecast to 3.9 percent, up from 3.4 percent projected in July. The Fund attributed the improved outlook to “stronger domestic fundamentals, improved oil production, and rising investor sentiment” following economic reforms implemented since mid-2023.
Despite this optimism, the IMF warned that Nigeria’s fiscal and debt vulnerabilities remain pressing challenges. “Nigeria’s policy reforms have been significant — exchange rate unification, subsidy removal, and fiscal coordination are all steps in the right direction,” said Abebe Selassie, Director of the IMF’s African Department. “But the next phase requires policy consistency, revenue efficiency, and credible debt management to ensure that these hard-won gains are not reversed.”
Leading Nigeria’s delegation to Washington, Central Bank Governor Olayemi Cardoso reaffirmed the government’s determination to sustain reforms despite social and political pressures. “We will not allow reform fatigue to set in,” Cardoso said. “The danger of slowing down is losing the progress already achieved. This is a marathon, not a sprint — Nigerians will begin to feel the benefits as inflation trends down and growth strengthens.”
Cardoso reported that headline inflation, which peaked above 30 percent in 2024, had fallen for six consecutive months to 18.02 percent in September — the lowest in three years. He said the naira has stabilised across markets, with the gap between official and parallel exchange rates narrowing to under two percent, while foreign reserves have risen above $43 billion, providing more than 11 months of import cover.
He noted that these gains reflect renewed investor confidence and stronger inflows across asset classes. “Our monetary tightening, exchange rate reforms, and fiscal coordination have started to show measurable results,” Cardoso said. “We are strengthening fiscal discipline through better revenue mobilisation and cost control, ensuring that public finances are aligned with growth and inclusion.”
The IMF’s Research Department acknowledged that Nigeria’s recovery was “real but fragile.” Denz Igan, Division Chief at the department, said, “Nigeria’s growth resilience reflects supportive fiscal reforms, higher oil output, and improved investor confidence. Recent GDP rebasing has shown that the economy is much larger than previously estimated, with digital technology, services, and informal agriculture expanding rapidly.”
The IMF projected inflation to ease to 23 percent in 2025 and 22 percent in 2026, supported by improved monetary coordination and a flexible exchange rate. Tobias Adrian, IMF Financial Counsellor, described Nigeria’s foreign exchange reforms as “a difficult but necessary correction,” adding: “A depreciating currency is not inherently bad. When markets are transparent and policy is credible, depreciation can act as an adjustment mechanism that supports investment and export competitiveness. Nigeria’s move toward a more flexible exchange rate is, therefore, a healthy sign.”
However, the Fund cautioned that fiscal and debt vulnerabilities continue to pose major risks. In its Fiscal Monitor 2025, the IMF projected Nigeria’s fiscal deficit to rise from 2.9 percent of GDP in 2025 to 3.7 percent in 2026, as higher interest payments and spending pressures outpace revenue growth. “Nigeria’s fiscal stance remains broadly neutral, but debt servicing is crowding out development spending,” said Davide Furceri, Division Chief in the IMF Fiscal Affairs Department. “The priority must be improving the quality of spending and mobilising non-oil revenues. Digitalising the tax system, improving compliance, and rationalising incentives will be key.”
The report estimated Nigeria’s public debt-to-GDP ratio at 39.3 percent in 2024, projected to decline slightly to 36.4 percent in 2025, provided new borrowing remains contained. The IMF urged Nigeria to maintain
transparency in debt reporting and avoid new non-concessional loans. “Nigeria’s progress is commendable, but debt costs are consuming fiscal space,” Selassie added. “Strong institutions and credible oversight are crucial for sustaining reforms and ensuring that fiscal adjustments translate into better living standards.”
The Fund also warned that weakening oil prices could undermine Nigeria’s fiscal stability, urging accelerated diversification and domestic revenue reforms. Selassie called for the digitalisation of tax administration while ensuring that citizens “see value for taxes paid” through visible improvements in infrastructure, health, and education.
At a civil society dialogue, IMF Managing Director Kristalina Georgieva endorsed Nigeria’s efforts to combat illicit financial flows, describing them as a major source of fiscal leakage. “For countries like Nigeria, tracing illicit financial flows can provide a powerful blueprint for plugging leakages that have long undermined sustainable growth,” she said. “We are integrating financial surveillance into our country’s programmes to help governments strengthen anti-money laundering systems.”
She added that as digital finance expands, oversight must keep pace. “Digital money and crypto assets can be used to evade oversight,” Georgieva said. “That’s why we are supporting countries to trace illicit flows through technology and capacity building — so growth is driven by transparency, not leakage.”
Cardoso also disclosed that Nigeria’s currency swap programme with China is being restructured after limited success, with a new framework underway to make future trade settlements “mutually beneficial.” “We’ve experimented with local currency trade settlements, but frankly, it didn’t work out very well,” he said. “Now that our currency is more competitive, we’re developing a framework that ensures such arrangements become win–win for all parties.”
He revealed that Nigeria now maintains a trade surplus of about six percent of GDP, driven by export diversification and increased local production. “For the first time in a long while, we have a positive balance of trade,” he said. “This reflects sound policies and growing competitiveness. The economy is undergoing a restructuring that’s reducing import dependence and encouraging domestic output.”
Cardoso added that the ongoing bank recapitalisation programme and closer engagement with fintechs would enhance the resilience of Nigeria’s financial system. “Innovation and regulation must progress together,” he said. “Our fintechs are ambassadors of Nigeria’s creativity. We want to build a digital financial future anchored on integrity and inclusion.”
Minister of State for Finance, Dr. Uzoka-Anite, who also attended the meetings, reaffirmed the government’s commitment to job creation, youth empowerment, and inclusive growth. “We are translating macroeconomic stability into real-sector growth,” she said. “With stronger revenues and ongoing reforms, we are investing more in infrastructure, agriculture, and the digital economy to create jobs — especially for youth and women entrepreneurs.”
She added that Nigeria’s partnership with the World Bank and other institutions on agricultural innovation and human capital development would expand access to finance for small businesses, particularly in rural and peri-urban areas.
At a high-level session on Artificial Intelligence (AI) and Productivity, Tony Elumelu, Chairman of UBA and Heirs Holdings, urged African policymakers to harness digital technologies to unlock the continent’s potential.
“Productivity is not just about worker output — it’s about opportunity per person,” he said. “Africa must leapfrog through AI in agriculture, energy, and healthcare. But to do that, we need massive investment in infrastructure and access to capital.”
Elumelu warned against a future where AI deepens inequality. “Let’s ensure AI democratises prosperity, not concentrates wealth,” he said. “Africa thrived with mobile money because entrepreneurs innovated despite constraints. With the right partnerships, we can do the same with AI.”
Summing up Nigeria’s participation at the Washington meetings, Cardoso said the country’s message to the global financial community was one of credibility, consistency, and confidence. “Our story is one of resilience — aligning courage with conviction to build a more competitive, innovative, and inclusive economy,” he said.
Georgieva concluded with cautious optimism, saying: “Nigeria is on the right path. The reforms are difficult, but they are essential. Staying the course will determine how much of today’s progress translates into jobs, prosperity, and hope for tomorrow.”
