Poverty Hits 63% in Nigeria, IMF Says
The International Monetary Fund (IMF) said poverty in Nigeria has reached 63% of the population as conditions remain difficult for people amidst economic reform.
In a statement released following its Article IV consultation with Nigeria, the IMF said strong reforms over the past three years have improved macroeconomic outcomes and strengthened resilience.
The IMF said, still, conditions for many Nigerians remain difficult. Poverty reached 63 per cent (national poverty line), and 27 million Nigerians are estimated to have faced food insecurity in the fall of 2025.
The Fund added that higher global fuel, food and fertiliser prices will boost exports and fiscal revenues but also raise inflationary pressures, potentially aggravating poverty and food insecurity.
IMF projected Nigeria’s economy to grow by 4 percent in 2025 and 4.1 percent in 2026, as headwinds from higher food and transport costs weigh on economic activity.
“After being on a declining trend for over a year, inflation nudged up to 15.4 percent year-on-year in March 2026 as the jump in international fuel and food prices started hitting Nigeria.
“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 IMF said.
The multilateral lender said Nigeria’s gross international reserves increased to US$46 billion in 2025 from US$40 billion at end-2024, supported by the current account surplus, net purchases of central bank open market operations by non-residents, and a Eurobond issuance.
The statement highlighted that net international reserves increased to US$35 billion at end-2025 from US$23 billion at end-2024. The overall deficit of the consolidated government is estimated to have increased to 4.4 percent of GDP in 2025.
While non-oil revenues were on target, oil revenues fell short of budget expectations, the IMF said, adding that the shortfall was offset by under execution of reported capital expenditures, while some additional capital spending that occurred outside the budget perimeter has now been included in the budget through the repeal-and-reenactment bills.
It said risks to the outlook stem from an uncertain global environment, particularly fuel and food price dynamics, adding that domestic security situation is another risk to people and economic activity.
On the upside, quick gains on revenue mobilisation would create additional budget space for growth-enhancing priority spending.
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities’ reforms over the past three years that have strengthened macroeconomic stability and resilience.
Directors cautioned that conditions remain difficult for many Nigerians, with poverty and food insecurity likely to worsen in the current external environment.
Tight macroeconomic policies and continued reforms supported by technical assistance from the Fund and other partners will be crucial to preserve stability and boost inclusive growth.
Directors called for a neutral fiscal stance in 2026 to support macroeconomic stability and disinflation, while protecting priority and social spending.
They welcomed the recent tax reforms, noting that additional tax policy measures may be needed over the medium term, including to fund a scaled up cash transfer program to provide relief to the most vulnerable.
Highlighting concerns about off budget spending and complex financing instruments, they called for accelerating reforms to strengthen the budget process, public financial management, fiscal reporting and risk framework, transparency, and accountability.
Directors commended the authorities’ success in bringing down inflation, while noting renewed external inflationary pressures. They agreed that the Central Bank of Nigeria should maintain a tight monetary policy stance with a data dependent approach until disinflation is entrenched and inflation expectations are anchored.
IMF directors welcomed progress toward adopting inflation targeting and encouraged steps to strengthen monetary transmission and communication.
Directors welcomed the authorities’ commitment to the flexible exchange rate regime, recognizing that foreign exchange interventions can play a complementary role under certain circumstances.
Directors called for reducing reliance on portfolio flows with roll over risk, phasing out remaining exchange restrictions, capital flow management measures, and remaining multiple currency practices as conditions permit.
The IMF confirmed that the financial system remains resilient, helped by the recent recapitalisation of banks, while encouraging continued vigilance of rising NPLs and the sovereign bank nexus.
They encouraged the authorities to accelerate Basel III implementation, including the countercyclical capital buffer and the liquidity coverage ratio.
Directors stressed the importance of further strengthening supervision and bringing stablecoin and other crypto asset activities into the regulatory perimeter. They welcomed Nigeria’s removal from the FATF grey list and noted that sustained implementation will be key to preserving recent gains in financial integrity.
Directors emphasised the need for reforms to support inclusive growth and diversification. They flagged governance, security, electricity, agriculture, infrastructure, and human capital as priority areas.
IMF called for strengthening macroeconomic statistics to support policy formulation and implementation. Some Directors stressed the importance of integrating climate considerations into macroeconomic policy and development policies. Federal Executive Council Approves $2.9bn Rail Projects
