By Majeed Salaam
The International Monetary Fund (IMF) and the federal government have acknowledged that Nigeria’s economic reforms have imposed significant hardship, with rising living costs and persistent poverty limiting the benefits of improved economic performance.
The IMF raised its 2026 growth forecast for Nigeria by 10 basis points to 4.2 percent and projected 4.3 percent growth in 2027. However, it warned that stronger growth had yet to provide sufficient relief to households struggling with high food and energy prices.
Presenting the fund’s fiscal policy analysis at the IMF/World Bank Annual Meetings in Bangkok, Thailand, Deniz Igan, Research Department Division Chief, urged policymakers to balance immediate household needs with medium-term fiscal stability.
“While the growth held up in Nigeria, given energy exports, poverty rates are still very high, and we are very mindful that the population is suffering,” she said.
The IMF recommended temporary, targeted income support and cash transfers for vulnerable households, alongside improved public spending and revenue collection.
At separate engagements, Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele acknowledged that the sequencing of petrol subsidy removal and foreign exchange market liberalisation had contributed to Nigeria’s price crisis.
Petrol prices more than doubled following President Bola Tinubu’s May 2023 inauguration, during which he announced subsidy removal. The subsequent liberalisation of the foreign exchange market saw the naira lose more than 40 per cent of its value at the reformed official market, intensifying inflationary pressures.
Oyedele admitted that the reforms had been implemented too quickly but argued that partial implementation could leave Nigerians bearing the costs without securing the anticipated benefits. He also claimed that the Federal Government had supported more than 10 million vulnerable Nigerians.
At a press conference of the Intergovernmental Group of 24 on International Monetary Affairs and Development, which he chairs, Oyedele warned against increasing tax burdens during the current economic difficulties.
“This is the wrong time to impose new taxes or increase the burden of tax, particularly on the vulnerable population and productive sectors of the economy,” he said, urging governments to explore savings and alternative revenue sources.
While acknowledging macroeconomic stability as a foundation for growth, the minister stressed that borrowing should finance infrastructure and job creation.
For Nigeria, the challenge remains converting improved economic indicators into affordable essentials, employment and measurable improvements in household welfare.
