IMF says poverty hits 63% in Nigeria despite reform gains

•FG responds, reaffirms commitment to economic reforms

International Monetary Fund (IMF) has reported that poverty in Nigeria has climbed to 63 percent of the population, even as the country records notable gains in macroeconomic stability under President Bola Ahmed Tinubu’s administration.

The disclosure came in the IMF’s 2026 Article IV Consultation report and concluding statement following its mission to Nigeria. While praising reforms implemented over the past three years, the Fund painted a sobering picture of living conditions for ordinary citizens. An estimated 27 million people faced food insecurity in the latter part of 2025, the report stated.

The Federal Government, however, welcomed the assessment, describing it as independent validation of its economic policies. In a statement issued Tuesday, the government said the IMF’s findings affirmed that key reforms are strengthening macroeconomic stability, restoring investor confidence, and laying foundations for sustainable growth.

According to the IMF, reforms such as the removal of fuel subsidies, foreign exchange market liberalisation, the end of deficit monetisation, and efforts at fiscal discipline have improved economic resilience.

Nigeria’s gross international reserves rose to $46 billion in 2025 from $40 billion at the end of 2024, while net reserves increased significantly to $35 billion from $23 billion. The foreign exchange parallel market premium has remained below five percent, and sovereign spreads stayed broadly stable despite global headwinds.

The Fund projected Nigeria’s economy to expand by 4.0 percent in 2025 and 4.1 percent in 2026. It noted progress in the banking sector, ongoing recapitalisation, and Nigeria’s removal from the Financial Action Task Force grey list. However, challenges persist. Inflation, which had been declining for over a year, edged up to 15.4 percent year-on-year in March 2026 due to rising international fuel and food prices. The consolidated government fiscal deficit widened to 4.4 percent of GDP in 2025, with oil revenues falling short of projections.

“Higher global prices of fuel, food and fertilisers continue to exert pressure on households and could worsen poverty and food insecurity,” the IMF warned. It identified uncertainty in global commodity markets and domestic security challenges as major risks to the outlook.

Executive Directors commended Nigerian authorities for improved stability but stressed that poverty and food insecurity remain serious concerns. They called for a neutral fiscal stance in 2026, sustained social protection programmes, expanded cash transfers to vulnerable households, and stronger fiscal transparency.

The IMF advised the Central Bank of Nigeria to maintain tight monetary policy until inflation is under control and to advance towards an inflation-targeting framework. It also urged closer monitoring of non-performing loans and regulation of emerging financial technologies, including crypto assets.

In its response, the Federal Government highlighted per capita income growth of nearly 10 percent in 2025 as evidence of improving living standards. It pointed to ongoing interventions such as expanded cash transfer programmes, support for small businesses, student loans via the Nigerian Education Loan Fund, consumer credit schemes, and investments in healthcare.

The government also emphasised agriculture initiatives under the Renewed Hope National Agricultural Mechanisation Programme to boost productivity, strengthen value chains, and enhance food security. It welcomed the IMF’s recognition of tax reforms, digitised revenue collection, and public financial management improvements.

Special Adviser to the President on Revenue, Taiwo Oyedele, said the government was already addressing recommendations on fiscal reporting, budget transparency, and data reconciliation.

“The Government is taking steps to strengthen fiscal data integrity, improve coordination among institutions, enhance transparency in budget execution and deepen public financial management reforms,” he stated.

Despite global uncertainties—including renewed Middle East tensions driving up energy and food prices—the government expressed optimism. It noted that higher energy prices could benefit Nigeria through increased export earnings and foreign exchange inflows, provided efforts to boost crude production, domestic refining, and gas exports succeed.

Public debt relative to GDP has declined, reserve buffers strengthened, and recent sovereign credit rating upgrades reflect growing confidence. The IMF’s medium-term outlook projects sustained growth above four percent, rising investments, and stronger revenues.

Reaffirming its commitment, the Federal Government pledged to sustain macroeconomic stability, promote inclusive growth, improve infrastructure, create jobs, and attract investment.

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“The ultimate goal of the reform programme remains improving the welfare of Nigerians through lower inflation, higher incomes, increased economic opportunities and a better quality of life,” the statement concluded.

Analysts say the report underscores a critical policy dilemma: while structural reforms are yielding macroeconomic dividends, translating these gains into tangible relief for millions of Nigerians living in poverty remains the administration’s most pressing challenge.