The International Monetary Fund (IMF) has disclosed that despite major economic reforms undertaken by the Nigerian government over the last three years, poverty and food insecurity have worsened significantly across the country, with 63 per cent of Nigerians now living below the national poverty line.
The IMF, in its 2026 Article IV Consultation Report on Nigeria released on Tuesday, said an estimated 27 million Nigerians faced food insecurity in the fall of 2025, even as the country recorded stronger macroeconomic indicators, improved foreign reserves and renewed investor confidence.
According to the Fund, reforms including fuel subsidy removal, exchange rate liberalisation, tightening monetary policy and ending deficit monetisation have strengthened macroeconomic stability and improved resilience in the economy.
“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult,” the IMF stated.
The report noted that while Nigeria’s economy grew by four per cent in 2025 and is projected to rise marginally to 4.1 per cent in 2026, rising global fuel, food and fertiliser prices are worsening inflationary pressures and deepening hardship among citizens.
Inflation, which had been on a downward trend for over one year, climbed to 15.4 per cent in March 2026 following increases in international food and fuel prices.
The IMF warned that the current global environment, particularly the war in the Middle East, poses fresh risks to Nigeria’s economic outlook through higher transport, food and energy costs.
It, however, acknowledged improvements in Nigeria’s external reserves position, revealing that gross international reserves rose from $40 billion at the end of 2024 to $46 billion in 2025, while net international reserves increased to $35 billion from $23 billion within the same period.
The Fund also stated that the naira appreciated by 10 per cent year-on-year against the United States dollar in March 2026.
Despite these gains, the IMF expressed concerns over Nigeria’s fiscal position, noting that the consolidated government deficit widened to 4.4 per cent of GDP in 2025 from 2.4 per cent in 2024.
It said oil revenues underperformed budget expectations, while government interest payments consumed 53 per cent of federal revenues in 2025, up from 41 per cent in the previous year.
The report further raised concerns about off-budget spending and “complex financing instruments,” urging authorities to strengthen transparency, accountability and public financial management systems.
“Conditions remain difficult for many Nigerians, with poverty and food insecurity likely to worsen in the current external environment,” the IMF Executive Board stated after concluding consultations with Nigerian authorities.
The Fund urged the Federal Government to maintain a neutral fiscal stance in 2026 while protecting priority and social spending.
It also advised the government to scale up cash transfer programmes targeted at vulnerable Nigerians.
According to the report, only 9.2 million households have so far been enrolled in the government’s cash transfer system, against a target of 15 million households, with beneficiaries receiving at most three transfers of N25,000 since 2023.
The IMF further called on the Central Bank of Nigeria (CBN) to sustain tight monetary policies until inflation is firmly under control and inflation expectations are fully anchored.
The Fund commended the apex bank for progress made toward inflation targeting and for maintaining a flexible exchange rate regime.
On the financial sector, the IMF disclosed that 33 out of 37 Nigerian banks met the revised recapitalisation requirements by the March 2026 deadline, while four banks are still undergoing regulatory and judicial processes.
However, it warned that non-performing loans had risen to eight per cent in the third quarter of 2025, above prudential limits.
The IMF also urged Nigerian authorities to accelerate structural reforms in electricity, infrastructure, agriculture and human capital development to drive inclusive growth and economic diversification.
It stressed that insecurity remains a major threat to investment, agriculture and oil production across the country.
The report added that Nigeria’s presidential election scheduled for January 2027 could pose additional fiscal risks if reform momentum slows or spending pressures increase ahead of the polls.
