IMF: Nigeria is a reform paradox: growth increases, reserves increase, but 63% live in poverty – THIS UPDATE

Nigeria’s sweeping economic reforms have produced stronger growth, lower inflation and improved external reserves, but millions of Nigerians continue to face worsening hardship, according to the International Monetary Fund (IMF).

In its latest Article IV consultation report, the International Monetary Fund said poverty increased to 63% of the population, while about 27 million Nigerians faced food insecurity at the end of 2025, despite significant improvements in key economic indicators.

The Fund noted that reforms implemented over the past three years have strengthened macroeconomic stability and improved investor confidence.

Nigeria’s economy is estimated to have grown by 4% in 2025 and is expected to expand by 4.1% in 2026, driven by agriculture, real estate, information and communications technology and the oil and gas sector.

The country’s external position has also improved significantly. Gross international reserves increased to $46 billion in 2025 from $40 billion at the end of 2024 and are expected to further increase to $58.1 billion in 2026.

The current account surplus stood at 4.8% of GDP in 2025, supported by higher oil and gas exports and reduced fuel imports as domestic refining capacity expands.

Inflation, which had been falling steadily for more than a year, fell to 15.1% in February 2026 before rising to 15.4% in March as rising global fuel and food prices spread through the national economy.

The IMF expects inflationary pressures to persist in the near term, forecasting inflation at the end of 2026 to be 17%.

Despite the improving macroeconomic outlook, the Fund warned that economic gains have yet to translate into significant relief for many families. Rising food, transportation and energy costs continue to erode purchasing power, leaving millions of people vulnerable to poverty and hunger.

The IMF urged Nigerian authorities to maintain tight monetary policy, support exchange rate reforms and accelerate structural reforms in the electricity, infrastructure, agriculture and human capital development sectors.

He also called for stronger social protection measures, including increased cash transfers, to protect vulnerable families from the impact of economic adjustments.

While acknowledging the progress made in restoring stability, the Fund stressed that ensuring the benefits of reform reach the Nigerian population remains one of the country’s most pressing economic challenges.

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