The International Monetary Fund (IMF) has given a positive nod to Nigeria’s recent macroeconomic strides, applauding President Bola Tinubu’s reforms in the foreign exchange (FX) market and the resulting stability of the naira.
In its latest Article IV Consultation Report, released on Wednesday, the IMF praised key policy changes implemented by Nigerian authorities over the past two years, including the removal of fuel subsidies, halting of monetary financing of the fiscal deficit, and improvements in FX transparency and liquidity.
According to the report, these reforms have significantly bolstered investor confidence, allowing Nigeria to successfully re-enter the Eurobond market in January 2025 — its first such issuance in four years — and helped attract $6.9 billion in FX inflows during the first quarter of 2025. As a result, gross reserves surged to $40.9 billion by end-2024, covering over eight months of import needs.
“Reforms to the FX market and foreign exchange interventions have brought stability to the naira,” the IMF stated, noting that the FX premium — the gap between official and parallel markets — has narrowed dramatically from over 60% to below 3%.
The Fund also highlighted a drop in Nigeria’s inflation rate, which fell to 23.7% in April 2025 from 31% in 2024, citing naira stability, improved food production, and tighter monetary policy by the Central Bank of Nigeria (CBN).
The IMF commended the CBN, under the leadership of Governor Olayemi Cardoso, for maintaining a tight monetary stance and introducing a “willing-buyer, willing-seller” framework through a new digital FX trading platform (B-Match). This replaced the controversial multiple exchange rates that had long distorted the market.
While praising the gains, the IMF urged Nigeria to continue refining its FX intervention strategy to contain excess volatility, while also phasing out capital flow management (CFM) measures gradually and strategically.
Directors of the IMF agreed that Nigeria must adopt a neutral fiscal stance to protect macroeconomic stability and focus expenditure on growth-enhancing investments. They also backed cash transfer initiatives to help mitigate rising poverty and economic uncertainty.
The Fund welcomed progress in tax reform, particularly efforts to advance a new Tax Reform Bill, expand the country’s revenue base, and create fiscal space for development spending without jeopardizing debt sustainability.
The IMF acknowledged CBN’s efforts to recapitalise the banking sector, requiring all banks to raise their minimum capital by March 2026. This is intended to position Nigeria’s financial institutions for future economic shocks and facilitate access to credit as the country targets a $1 trillion economy.
The Fund also praised initiatives aimed at deepening financial inclusion, including digital banking access and programs like the Women’s Financial Inclusion Initiative (Wi-Fi), designed to uplift previously unbanked and underrepresented groups.
Additionally, Nigeria’s progress in tackling financial crime was noted, with the IMF citing actions to strengthen the AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) framework. However, it urged the government to resolve outstanding gaps in order to exit the Financial Action Task Force (FATF) grey list.
Despite the commendations, the IMF warned of significant downside risks. These include persistent inflation, infrastructure deficits, insecurity, and the possibility of fiscal slippage.
“Addressing bottlenecks in electricity supply, health and education spending, and climate resilience will be essential to broad-based economic transformation,” the report noted.
The Fund emphasized the need to boost agricultural productivity, reduce bureaucratic hurdles, and implement robust public investment management systems to ensure projects yield measurable economic returns.
In response, the Federal Government, through Finance Minister Wale Edun, welcomed the IMF’s observations and reaffirmed its commitment to economic reform.
Edun stated that the administration remains focused on “safeguarding reform gains and maintaining economic stability,” while monitoring global market trends, especially oil price fluctuations.
“The Federal Government is determined to pursue sound economic management that promotes macroeconomic stability, broad-based growth, and improved living standards for all Nigerians,” he said in a statement released by the Ministry of Information.
With the IMF’s latest report recognizing Nigeria’s economic reform milestones under President Tinubu, the message is clear: while progress has been made, vigilance, strategic policy execution, and inclusive growth remain the key ingredients for long-term success.
As Nigeria eyes deeper foreign investor engagement, sustainable development, and social inclusion, global institutions like the IMF will be watching closely to ensure that the early gains are not just preserved but expanded across sectors and populations.