{"id":120315,"date":"2025-07-02T21:11:31","date_gmt":"2025-07-02T20:11:31","guid":{"rendered":"https:\/\/pointblanknews.com\/pbn\/?p=120315"},"modified":"2025-07-02T21:11:31","modified_gmt":"2025-07-02T20:11:31","slug":"nigerias-economy-strengthens-as-imf-backs-reform-measures","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/news\/nigerias-economy-strengthens-as-imf-backs-reform-measures\/","title":{"rendered":"\u200eNigeria\u2019s Economy Strengthens as IMF Backs Reform Measures"},"content":{"rendered":"
\n
By Daniel Adaji<\/div>\n
\n
\n
\u200e<\/div>\n
\u200eThe International Monetary Fund (IMF) has endorsed Nigeria\u2019s economic reforms, describing them as bold, credible, and critical to the country\u2019s recovery.<\/div>\n
\u200e<\/div>\n
\u200eIn 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.<\/div>\n
\u200e<\/div>\n
\u200eThe IMF noted that Nigeria\u2019s policy reforms particularly those led by the Central Bank of Nigeria (CBN) have begun to yield results.<\/div>\n
\u200e<\/div>\n
\u200e\u201cThe authorities have implemented difficult but necessary reforms that have improved macroeconomic stability and enhanced resilience,\u201d the IMF stated in its Executive Board Assessment.<\/div>\n
\u200e<\/div>\n
\u200eA major focus of reform has been on restoring the independence of the CBN, which significantly reduced its use of the controversial \u201cWays and Means\u201d facility\u2014an overdraft channel previously used to fund budget deficits.<\/div>\n
\u200e<\/div>\n
\u200eAs of April 2025, the overdraft has been slashed by nearly 90 percent. According to the IMF, this marks \u201cthe discontinuation of deficit monetisation\u201d and lays the groundwork for more robust inflation targeting.<\/div>\n
\u200e<\/div>\n
\u200eIt stated that the CBN\u2019s 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 \u201cthe Central Bank is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched.\u201d<\/div>\n
\u200e<\/div>\n
\u200eThe IMF further commended Nigeria\u2019s overhaul of its foreign exchange system. The multiple exchange rate regime was replaced by a \u201cwilling-buyer, willing-seller\u201d model supported by a digital platform known as B-Match.<\/div>\n
\u200e<\/div>\n
\u200e\u201cReforms to the FX market and foreign exchange interventions have brought stability to the naira,\u201d 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.<\/div>\n
\u200e<\/div>\n
\u200eIn 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 \u201cstrengthened investor confidence\u201d and a \u201cresumption of portfolio inflows.\u201d<\/div>\n
\u200e<\/div>\n
\u200eThe IMF also welcomed Nigeria\u2019s banking sector reforms. The CBN is currently overseeing a recapitalisation drive that will increase banks\u2019 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.<\/div>\n
\u200e<\/div>\n
\u200eSimultaneously, the CBN is driving financial inclusion efforts, particularly targeting underserved groups. Through initiatives like the Women\u2019s Financial Inclusion Initiative (Wi-Fi), the Bank is expanding access to digital banking and financial literacy programmes.<\/div>\n
\u200e<\/div>\n
\u200eIn addition, the IMF commended steps taken to strengthen Nigeria\u2019s 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.<\/div>\n
\u200e<\/div>\n
\u200eDespite 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.<\/div>\n
\u200e<\/div>\n
\u200e\u201cFiscal and monetary tightening and exchange rate reforms contributed to improved macroeconomic balances,\u201d the IMF stated, adding that \u201cstrong policy coordination and communication are key\u201d to sustaining recovery in an increasingly volatile global environment.<\/div>\n
\u200e<\/div>\n
\u200eGovernor of the Central Bank, Olayemi Cardoso, welcomed the IMF\u2019s assessment as a vote of confidence.<\/div>\n
\u200e<\/div>\n
\u200e\u201cAt a time of global uncertainty, this assessment reaffirms that responsible, forward-looking policy choices matter,\u201d he said.<\/div>\n
\u200e<\/div>\n
\u200e\u201cIt 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,\u201d he added<\/div>\n<\/div>\n<\/div>\n