Nigeria’s economic reforms working, but poverty increasing – IMF

The International Monetary Fund said Tuesday that reforms implemented by the Nigerian government had strengthened the country’s economy, but warned that more than 60 percent of Nigerians now live in poverty.

Since taking office just over three years ago, President Bola Tinubu has removed a costly fuel subsidy that had kept petrol prices artificially low for decades, liberalised the exchange rate for its currency and overhauled the country’s tax system.

While economists said the policy changes were long overdue, poverty has continued to increase, affecting 63 percent of the population at the end of 2025.

More than 27 million people faced food insecurity during the year, the IMF added.

“Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience,” the IMF said in a statement after its annual review of the Nigerian economy.

“Still, conditions for many Nigerians remain difficult,” it said.

Poverty has been ticking up in Africa’s most populous country for years, with the World Bank reporting last that about 61 percent of the country’s population lived in poverty, up from 40 percent in 2019.

Three-quarters of the increase occurred before 2023, when Tinubu was sworn in, the World Bank noted at the time.

Widespread insecurity from armed groups — especially in the north, where a large bulk of the country’s food is grown — is “another risk to people and economic activity”, the IMF said.

According to the latest official figures, inflation accelerated to an annual rate of 15.7 percent in April, a five-month high.

Analysts attributed the increase partly to higher fuel prices linked to the ongoing war in the Middle East.

Economic growth is projected to reach 4.1 percent this year, after four percent in 2025.

The IMF warned that while higher costs of food, fertiliser and fuel could boost Nigeria’s revenues — the country is Africa’s largest oil producer — they could also intensify inflationary pressures on poor households, “potentially aggravating poverty and food insecurity”.

Nigeria heads to the polls in January, when Tinubu is seeking re-election for a second term.

AFP