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By Daniel Adaji
The International Monetary Fund (IMF) has endorsed Nigeria’s economic reforms, describing them as bold, credible, and critical to the country’s recovery.
In its latest Article IV Consultation released on Wednesday, the IMF praised recent measures for restoring macroeconomic stability and positioning Nigeria for inclusive, long-term growth.
The IMF noted that Nigeria’s policy reforms particularly those led by the Central Bank of Nigeria (CBN) have begun to yield results.
“The authorities have implemented difficult but necessary reforms that have improved macroeconomic stability and enhanced resilience,” the IMF stated in its Executive Board Assessment.
A major focus of reform has been on restoring the independence of the CBN, which significantly reduced its use of the controversial “Ways and Means” facility—an overdraft channel previously used to fund budget deficits.
As of April 2025, the overdraft has been slashed by nearly 90 percent. According to the IMF, this marks “the discontinuation of deficit monetisation” and lays the groundwork for more robust inflation targeting.
It stated that the CBN’s efforts to rein in inflation are also showing results. Headline inflation, which had exceeded 40 percent, fell to 22.9 per cent by May 2025. The IMF remarked that “the Central Bank is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched.”
The IMF further commended Nigeria’s overhaul of its foreign exchange system. The multiple exchange rate regime was replaced by a “willing-buyer, willing-seller” model supported by a digital platform known as B-Match.
“Reforms to the FX market and foreign exchange interventions have brought stability to the naira,” the IMF said. FX inflows surged to $6.9bn in Q1 2025, and reserves rose to $40.9bn at the end of 2024 enough to cover over eight months of imports. The gap between official and parallel market rates has narrowed sharply from over 60 percent to below 3 percent.
In January 2025, Nigeria successfully re-entered the Eurobond market, raising investor confidence after a four-year hiatus. The IMF described the move as evidence of “strengthened investor confidence” and a “resumption of portfolio inflows.”
The IMF also welcomed Nigeria’s banking sector reforms. The CBN is currently overseeing a recapitalisation drive that will increase banks’ minimum capital requirements by March 2026. This is aimed at boosting credit access and ensuring that the sector remains strong enough to support a projected $1tn economy.
Simultaneously, the CBN is driving financial inclusion efforts, particularly targeting underserved groups. Through initiatives like the Women’s Financial Inclusion Initiative (Wi-Fi), the Bank is expanding access to digital banking and financial literacy programmes.
In addition, the IMF commended steps taken to strengthen Nigeria’s framework for anti-money laundering and combating the financing of terrorism (AML/CFT). The Fund urged the Nigerian government to resolve lingering gaps in order to exit the Financial Action Task Force (FATF) grey list, which flags jurisdictions with strategic deficiencies in countering illicit financial flows.
Despite the progress, the IMF warned that Nigeria still faces major structural challenges. These include insecurity, weak infrastructure, red tape, and low agricultural productivity. The Fund called for targeted investments in electricity, education, healthcare, and climate resilience to safeguard and sustain the current momentum.
“Fiscal and monetary tightening and exchange rate reforms contributed to improved macroeconomic balances,” the IMF stated, adding that “strong policy coordination and communication are key” to sustaining recovery in an increasingly volatile global environment.
Governor of the Central Bank, Olayemi Cardoso, welcomed the IMF’s assessment as a vote of confidence.
“At a time of global uncertainty, this assessment reaffirms that responsible, forward-looking policy choices matter,” he said.
“It affirms that Nigeria is regaining credibility, anchoring expectations, and laying the foundation for inclusive, long-term growth. It is both an encouragement to stay the course, and a reminder that resilience and prosperity require continued discipline and vision,” he added