The International Monetary Fund (IMF) has expressed concern over Nigeria’s persistently high inflation and urged the Federal Government to intensify its economic reforms to unlock the country’s growth potential.
In a country-focused article released Monday, titled “How Nigeria Can Unleash Its Economic Potential,” the IMF acknowledged recent policy steps by President Bola Tinubu’s administration but warned that inflation – still above 20 percent – remains a major threat to economic stability.
The Fund noted that despite some policy shifts, Nigeria continues to grapple with deep-rooted challenges, including widespread poverty, food insecurity, and weak infrastructure. It particularly highlighted unreliable electricity supply as a serious constraint on economic activity.
“Stronger and more sustained growth is needed to lift millions of Nigerians out of poverty,” the IMF said, pointing to the absence of a comprehensive social safety net as a key issue.
It also called for the implementation of an effective budget framework to ensure public spending is realistic, well-managed, and transparent. According to the Fund, such a framework is vital to strengthening accountability and ensuring that investments in human capital and infrastructure are impactful.
On inflation, the IMF urged the Central Bank of Nigeria to sustain a firm monetary policy stance to curb price instability and reduce economic uncertainty.
The IMF further advised that savings from the removal of fuel subsidies must be channeled into critical sectors such as health, education, and infrastructure. It warned that high interest payments on government debt are crowding out necessary investments in development.
To meet its long-term goals, the IMF emphasized the importance of boosting domestic revenue. It endorsed ongoing tax reforms and encouraged the government to broaden the tax net and enforce compliance to ensure equitable revenue generation.
The Fund concluded that Nigeria’s economic future depends on bold, coordinated actions across all levels of government.
