Abuja, July 8, 2025 — The International Monetary Fund (IMF) has raised concerns that Nigeria’s wide-ranging economic reforms—such as subsidy removal, foreign exchange liberalisation, and tighter fiscal policy—are not benefiting the most vulnerable citizens due to a lack of effective social safety nets.
In its latest Article IV assessment, IMF mission chief Axel Schimmelpfennig and Resident Representative Christian Ebeke stressed that while macroeconomic indicators are showing promise, poverty and food insecurity remain persistently high at around 42 percent, and millions of Nigerians have yet to feel the effects of the reforms .
Despite reforms that include ending central bank financing of deficits, removing fuel subsidies, and liberalising the naira, the IMF warned that without an expanded cash transfer programme, growth risks deepening inequality. The lack of banking access among the poor and insufficient data hamper targeted support .
Key immediate IMF recommendations include:
Significantly scaling up direct cash transfers to cushion households against inflation and food insecurity .
Channeling subsidy savings and efficiency gains into social spending and essential services .
Improving revenue mobilization through tax reforms—Nigeria’s current tax-to-GDP ratio remains one of the lowest globally .
Strengthening budget frameworks and ensuring transparency in allocation for social protection and infrastructure .
While the IMF acknowledged that reforms had begun to stabilise foreign reserves, align official and parallel exchange rates, and revive investor confidence, it emphasised that real per capita growth had lagged between 2014–2023, with GDP per capita declining at an average of 0.7 percent annually .
