NIGERIA has experienced increased poverty and food insecurity over the past two years under President Bola Tinubu, despite government reforms, according to the latest consultation with the authorities by the executive board of the International Monetary Fund (IMF).

They highlighted this in the IMF 2025 Article IV Mission with Nigeria released on Wednesday, July 2.

The board noted that the Nigerian government implemented major reforms, including removing costly fuel subsidies, stopping monetary financing of the fiscal deficit, and improving the functioning of the foreign exchange market.

They believed the reforms strengthened investors’ confidence, helping the country to successfully tap the Eurobond market and leading to a resumption of portfolio inflows.

However, they said, “At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth.

“Growth accelerated to 3.4 per cent in 2024, driven mainly by increased hydrocarbon output and the vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity.”

The ICIR reports that an Article IV Mission refers to the regular (usually annual) consultations that the IMF conducts with its member countries to assess their economic health and policies.

This mission involves IMF staff visiting the member country, holding discussions with government officials and other stakeholders, and preparing a report for the IMF Executive Board.

The IMF board further pointed out that the reforms to the foreign exchange market and the Central Bank of Nigeria (CBN) interventions brought stability to the naira.

As the National Bureau of Statistics (NBS) rebased the consumer price index (CPI) index, the naira stabilisation and improvements in food production brought inflation to 23.7 per cent year-on-year in April 2025 from 31 per cent annual average in 2024, they noted.

“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 overhead spending,” they observed.

However, the IMF board pointed out that the downside risks have increased with heightened global uncertainty.

Nigeria’s real gross domestic product (GDP) is expected to expand by 3.4 per cent this year, supported by the new domestic refinery, higher oil production, and robust services.

But the board expressed reservations that, against a complex and uncertain external environment, medium-term growth is projected to hover around 3.5 per cent, supported by domestic reform gains.

Oil price decline

The IMF board feared that a further decline in oil prices or an increase in financing costs would adversely affect Nigeria’s growth, fiscal and external positions, undermine financial stability, and exacerbate exchange rate pressures.

“A deterioration of security could impact growth and food insecurity,” they warned.

Appraising the government for gains made through its reforms during the past two years and expressing worries over the downside risks, they stressed the importance of agile policy making to safeguard and enhance macroeconomic stability, creating enabling conditions to boost growth, and reducing poverty.

CBN tightening monetary policy

Commenting on the CBN’s tight monetary policy stance, the IMF board welcomed the discontinuation of deficit monetisation and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting.

They also welcomed the 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.

However, they called for the implementation of a robust foreign exchange intervention framework focused on containing excess volatility, stressing that the exchange rate is an important shock absorber.

They also called for accelerating the delivery of cash transfers to assist the poor, while commending the authorities on advancing the tax reform bill.

“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,” the IMF board added.