IMF applauds Nigeria’s reforms as economy shows strength

The International Monetary Fund (IMF) has acknowledged the positive impact of ongoing economic reforms led by the Central Bank of Nigeria (CBN), citing improving indicators such as a declining inflation rate, naira stability, rising foreign reserves, and stronger economic buffers.

In its October 2025 World Economic Outlook, the IMF attributed these gains to exchange rate reforms and investor-friendly policies implemented by the CBN under Governor Olayemi Cardoso. The Fund noted that these policies have cushioned the Nigerian economy against higher global tariffs, declining oil prices, and prolonged uncertainty in international financial markets.

The IMF projected Nigeria’s economy to grow by 3.9 per cent in 2025 and 4.1 per cent in 2026, reflecting an upward revision supported by domestic stability and fiscal prudence. IMF Economic Counsellor Pierre-Olivier Gourinchas said the outlook for Nigeria was based on “several improving macroeconomic indicators and supportive domestic factors.”

Key drivers of growth, he added, include improved oil production, rising investor confidence, a supportive fiscal stance, and Nigeria’s limited exposure to higher US tariffs. Stability in the exchange rate, rebased Gross Domestic Product figures, and an accumulation of foreign reserves were also highlighted as factors underpinning economic momentum.

Gourinchas noted that a 10 to 12 per cent weakening of the US dollar had eased financial conditions for emerging markets, reducing input costs and supporting local currency recoveries.

IMF Deputy Director of Research Petya Koeva Brooks observed that many sub-Saharan African economies had benefited from preferential US market access under the African Growth and Opportunity Act, which expired in September. She said growth in the region is expected to remain modest at 4.1 per cent in 2025 and rise slightly to 4.4 per cent in 2026.

At the 2025 IMF/World Bank Annual Meetings in Washington, D.C., CBN Governor Cardoso said the IMF’s positive verdict reflected Nigeria’s deliberate reforms and policy coordination between fiscal and monetary authorities. He described the economy as “fully restructured and resilient” and noted that the naira had emerged as a competitive currency in the region.

To rein in inflation, the CBN adopted aggressive monetary tightening, raising interest rates by over 800 basis points and strengthening liquidity management. Exchange rate reforms, including a unified FX framework and clearance of backlog FX commitments, restored confidence, boosted reserves above USD42 billion, and increased diaspora inflows.

According to CBN data, real GDP expanded by 4.2 per cent in the second quarter of 2025, signalling renewed growth momentum. Cardoso emphasised that the reforms mark more than a cyclical adjustment, pointing to a developmental inflection point and long-term structural transformation.