International Monetary Fund (IMF) Staff Completes 2025 Article IV Mission with Nigeria

Zawya

2 days ago

The Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.(1)
The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience. The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market. Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows. At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth.
Growth accelerated to 3.4 percent in 2024, driven mainly by increased hydrocarbon output and vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity. Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 3½ percent, supported by domestic reform gains.
Gross and net international reserves increased in 2024, with a strong current account surplus and improved portfolio inflows. Reforms to the fx market and foreign exchange interventions have brought stability to the naira.
Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the backcasted rebased CPI index released by the Nigerian Bureau of Statistics. Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices.
Fiscal performance improved in 2024. Revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending.
Downside risks have increased with heightened global uncertainty. A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures. A deterioration of security could impact growth and food insecurity.
Executive Board Assessment (2)
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities on the successful implementation of significant reforms during the past two years and welcomed the associated gains in macroeconomic stability and resilience. As these gains have yet to benefit all Nigerians, and with heightened economic uncertainty and significant downside risks, Directors emphasized the importance of agile policy making to safeguard and enhance macroeconomic stability, creating enabling conditions to boost growth, and reducing poverty.
Directors agreed that the Central Bank of Nigeria is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched. They welcomed the discontinuation of deficit monetization and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting. Directors also welcomed steps taken by the authorities to build reserves and support market confidence and praised reforms to the foreign exchange market that supported price discovery and liquidity. They called for implementation of a robust foreign exchange intervention framework focused on containing excess volatility, stressing that the exchange rate is an important shock absorber. Directors also agreed with staff's call to phase out existing capital flow management measures in a properly timed and sequenced manner.
Directors called for a neutral fiscal stance to safeguard macroeconomic stabilization with priority given to investments that enhance growth. Directors also called for accelerating the delivery of cash transfers to assist the poor. They commended the authorities on advancing the tax reform bill, an important step towards enhancing revenue mobilization and creating fiscal space for development spending, while preserving debt sustainability.
Directors recognized actions to strengthen the banking system, including the ongoing process of increasing banks' minimum capital. They welcomed the authorities' efforts to boost financial inclusion and promote capital market development, while emphasizing the importance of moving to a robust risk‑based supervision for mortgage and consumer lending schemes as well as the fintech and crypto sectors. Directors welcomed progress made in strengthening the AML/CFT framework and stressed the importance of resolving remaining weaknesses to exit the FATF grey list.
To lift Nigeria's growth outlook, improve food security, and reduce fragility, Directors highlighted the importance of tackling security, red tape, agricultural productivity, infrastructure gaps, including boosting electricity supply, as well as improved health and education spending, and making the economy more resilient to climate events. They noted that addressing structural impediments to private credit extension is also needed to support growth. Directors welcomed the IMF's capacity development to support authorities' reform efforts and agreed that enhancing data quality is critical for sound, data‑driven policymaking.
Table 1. Nigeria: Selected Economic and Financial Indicators, 2023–26
2023
2024
2025
2026
5/8/2025 13:03
Act.
Est.
Proj.
Proj.
National income and prices
Annual percentage change
(unless otherwise specified)
Real GDP (at 2010 market prices)
2.9
3.4
3.4
3.2
Oil GDP
-2.2
5.5
4.9
2.3
Non-oil GDP
3.2
3.3
3.3
3.3
Non-oil non-agriculture GDP
3.9
4.1
3.7
3.7
Production of crude oil (million barrels per day)
1.5
1.5
1.7
1.7
Nominal GDP at market prices (trillions of naira)
234
277
320
367
Nominal non-oil GDP (trillions of naira)
221
260
303
351
Nominal GDP per capita (US$)
1,597
806
836
887
GDP deflator
12.6
14.5
11.4
11.4
Consumer price index (annual average)
24.7
31.4
24.0
23.0
Consumer price index (end of period)
28.9
15.4
23.0
18.0
Investment and savings
Percent of GDP
Gross national savings
31.8
39.6
37.5
37.7
Public
-0.1
3.9
2.2
1.7
Private
31.9
35.7
35.3
36.1
Investment
30.0
30.4
30.5
33.1
Public
3.2
4.8
5.4
5.5
Private
26.8
25.6
25.1
27.6
Consolidated government operations
Percent of GDP
Total revenues and grants
9.8
14.4
14.2
13.8
Of which: oil and gas revenue
3.3
4.1
5.1
4.9
Of which: non-oil revenue
5.8
9.2
8.8
8.8
Total expenditure and net lending
13.9
17.1
18.9
18.7
Overall balance
-4.2
-2.6
-4.7
-4.9
Non-oil primary balance
-4.9
-4.9
-7.2
-6.9
Public gross debt1
48.7
52.9
52.0
50.8
Of which: FX denominated debt
18.1
25.5
25.8
24.8
FGN interest payments (percent of FGN revenue)
83.8
41.1
47.3
49.2
Money and credit
Contribution to broad money growth
(unless otherwise specified)
Broad money (percent change; end of period)
51.9
42.7
17.9
22.3
Net foreign assets
10.5
30.4
2.1
7.2
Net domestic assets
41.3
12.3
15.8
15.1
Of which: Claims on consolidated government
20.1
-11.9
6.2
4.1
Credit to the private sector (y/y, percent)
53.6
30.1
17.9
18.2
Velocity of broad money (ratio; end of period)
2.7
3.3
2.2
2.1
External sector
Annual percentage change
(unless otherwise specified)
Current account balance (percent of GDP)
1.8
9.2
7.0
4.6
Exports of goods and services
-12.8
-4.5
-6.0
1.3
Imports of goods and services
-4.4
-0.8
-6.8
8.4
Terms of trade
-6.1
-0.6
-7.4
-3.3
Price of Nigerian oil (US$ per barrel)
82.3
79.9
67.7
63.3
External debt outstanding (US$ billions)2
102.9
102.2
105.9
110.2
Gross international reserves (US$ billions, CBN definition)3
33.2
40.2
36.4
39.1
Equivalent months of prospective imports of G&S
5.4
5.7
7.5
7.7
Memorandum items:
Implicit fuel subsidy (percent of GDP)
0.8
2.1
0.0
0.0
Sources: Nigerian authorities; and IMF staff estimates and projections.
1 Gross debt figures for the Federal Government and the public sector include overdrafts from the Central Bank of Nigeria (CBN).
2 Includes both public and private sector.
3 Based on the IMF definition, the gross international reserves were US$8 billion lower in December 2024.
(1) Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. Staff hold separate annual discussions with the regional institutions responsible for common policies in four currency unions—the Euro Area, the Eastern Caribbean Currency Union, the Central African Economic and Monetary Union, and the West African Economic and Monetary Union. For each of the currency unions, staff teams visit the regional institutions responsible for common policies in the currency union, collects economic and financial information, and discusses with officials the currency union's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis of discussion by the Executive Board. Both staff's discussions with the regional institutions and the Board discussion of the annual staff report will be considered an integral part of the Article IV consultation with each member.
(2) At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm. The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.
Distributed by APO Group on behalf of International Monetary Fund (IMF).