The International Monetary Fund (IMF) has warned Nigeria to guard against rising debt and fiscal risks even as it praised the country’s ongoing economic reforms during the 2025 Annual Meetings of the IMF and World Bank in Washington D.C.
The Fund upgraded Nigeria’s 2025 growth forecast to 3.9 percent from 3.4 percent, citing stronger fundamentals, improved oil production, and growing investor confidence.
However, it cautioned that high debt costs and weak revenue could threaten recovery.
Nigeria’s policy reforms have been significant, but the next phase requires policy consistency and credible debt management, said Abebe Selassie, IMF’s Africa Director.
CBN Governor Olayemi Cardoso said inflation had dropped to 18.02 percent in September — the lowest in three years — while the naira had stabilised and foreign reserves now exceed $43 billion.
He vowed that reforms would continue despite political pressures.
The IMF described Nigeria’s rebound as real but fragile, projecting inflation to ease to 23 percent in 2025. It warned, however, that fiscal deficits may rise to 3.7 percent of GDP in 2026 as debt servicing crowds out development spending.
Selassie urged Nigeria to boost non-oil revenues, digitalise tax collection, and maintain transparency in borrowing. He noted that high debt costs across Africa are eroding funds for health, education, and infrastructure.
IMF Managing Director Kristalina Georgieva commended Nigeria’s progress on exchange rate reform and anti-corruption measures but called for stronger action against illicit financial flows.
Cardoso also disclosed plans to restructure the China currency swap deal and confirmed that Nigeria now records a trade surplus of six percent of GDP, driven by export growth and local production.
Minister of State for Finance Doris Uzoka-Anite said the government was focused on job creation and youth empowerment through investments in infrastructure, agriculture, and the digital economy.
UBA Chairman Tony Elumelu, speaking at a panel on Artificial Intelligence, urged African leaders to harness digital technology for inclusive growth, warning that AI must democratise prosperity, not deepen inequality.
IMF chief Georgieva concluded:Nigeria is on the right path. The reforms are difficult, but staying the course will determine how much of today’s progress translates into jobs and prosperity.
