IMF Staff Completes 2025 Article IV Mission with Nigeria
IMF News, July 2, 2025
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- Published: July 2, 2025
Macroeconomic overview and recent reforms
- The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience, including removing costly fuel subsidies, stopping monetary financing of the fiscal deficit, and improving the functioning of the foreign exchange market.
- These reforms helped Nigeria successfully tap the Eurobond market and resume portfolio inflows.
- At the same time, poverty and food insecurity have risen; the government is focused on raising growth.
Growth and sectoral developments
- Real GDP growth:
- 2024: 3.4 percent (accelerated, driven mainly by increased hydrocarbon output and vibrant services sector).
- 2025 projection: 3.4 percent (supported by the new domestic refinery, higher oil production and robust services).
- Medium-term projection: hover around 3½ percent, supported by domestic reform gains.
- Sector details:
- Oil GDP: 2024: 5.5 percent; 2025: 4.9 percent; 2026: 2.3 percent.
- Non-oil non-agriculture GDP: 2024: 3.9 percent; 2025: 4.1 percent; 2026: 3.7 percent.
- Production of crude oil (million barrels per day): 2024: 1.7; 2025: 1.5.
- Agriculture remained subdued owing to security challenges and sliding productivity.
Inflation, exchange rate, and reserves
- Inflation:
- Consumer price index (annual average): 2024: 31.4; 2025 projection: 24.0; 2026 projection: 23.0.
- Consumer price index (end of period): 2024: 15.4; 2025 projection: 18.0.
- Backcasted rebased CPI index: April 2025 year-on-year: 23.7 percent from a 31 percent annual average in 2024.
- Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices.
- Exchange rate and reserves:
- Reforms to the fx market and foreign exchange interventions have brought stability to the naira.
- Gross international reserves (US$ billions, CBN definition): 2024: 40.2; 2025 projection: 36.4; 2026 projection: 39.1.
- Memorandum: Based on the IMF definition, the gross international reserves were US$8 billion lower in December 2024.
Fiscal and public debt developments
- Fiscal performance improved in 2024: revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending.
- Selected fiscal indicators (percent of GDP):
- Total revenues and grants: 2024: 14.4; 2025 projection: 14.2; 2026 projection: 13.8.
- Total expenditure and net lending: 2024: 17.1; 2025 projection: 18.9; 2026 projection: 18.7.
- Overall balance: 2024: -2.6; 2025 projection: -4.7; 2026 projection: -4.9.
- Public gross debt: 2024: 52.9; 2025 projection: 52.0; 2026 projection: 50.8.
- Of which: FX denominated debt: 2024: 25.5; 2025 projection: 25.8; 2026 projection: 24.8.
- FGN interest payments (percent of FGN revenue): 2023: 83.8; 2024: 41.1; 2025 projection: 47.3; 2026 projection: 49.2.
- Implicit fuel subsidy (percent of GDP): 2023: 0.8; 2024: 0.0.
External sector and external debt
- Current account balance (percent of GDP): 2024: 7.0; 2025 projection: 4.6.
- Price of Nigerian oil (US$ per barrel): 2023: 82.3; 2024: 79.9; 2025 projection: 67.7; 2026 projection: 63.3.
- External debt outstanding (US$ billions): 2023: 102.9; 2024: 102.2; 2025 projection: 105.9; 2026 projection: 110.2.
- Exports and imports of goods and services (annual percent change): exports 2024: -4.5; 2025 projection: -6.0; imports 2024: -0.8; 2025 projection: -6.8.
Financial sector, money and credit
- Broad money (percent change; end of period): 2023: 51.9; 2024: 42.7; 2025 projection: 17.9; 2026 projection: 22.3.
- Credit to the private sector (y/y, percent): 2023: 53.6; 2024: 30.1; 2025 projection: 18.2.
- Directors recognized actions to strengthen the banking system, including the ongoing process of increasing banks’ minimum capital.
- Directors emphasized moving to robust risk‑based supervision for mortgage and consumer lending schemes, fintech and crypto sectors, and welcomed progress on strengthening the AML/CFT framework to exit the FATF grey list.
Executive Board assessment and policy recommendations
- Directors commended the authorities on successful implementation of significant reforms and welcomed gains in macroeconomic stability and resilience.
- Key policy guidance and priorities from Directors:
- Monetary policy: Maintain a tight monetary policy stance until disinflation becomes entrenched; continue to strengthen central bank governance to set the institutional foundation for inflation targeting.
- Foreign exchange: Implement a robust foreign exchange intervention framework focused on containing excess volatility; phase out existing capital flow management measures in a properly timed and sequenced manner.
- Fiscal policy: Adopt a neutral fiscal stance to safeguard macroeconomic stabilization with priority on investments that enhance growth; accelerate delivery of cash transfers to assist the poor.
- Revenue mobilization: Advance tax reform to enhance revenue mobilization and create fiscal space for development spending while preserving debt sustainability.
- Structural reforms: Tackle security, red tape, agricultural productivity, infrastructure gaps (including boosting electricity supply), improve health and education spending, and make the economy more resilient to climate events.
- Financial inclusion and capital markets: Boost financial inclusion and promote capital market development; address structural impediments to private credit extension to support growth.
- Data and capacity: Continue IMF capacity development and enhance data quality for sound, data‑driven policymaking.
Risks and downside scenarios
- Downside risks have increased with heightened global uncertainty.
- Key risk channels:
- A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures.
- A deterioration of security could impact growth and food insecurity.
Source: IMF Communications Department — Press Release No. 25/231 (IMF Staff Completes 2025 Article IV Mission with Nigeria, July 2, 2025).