….Advises FG against reintroducing petrol subsidy ahead of 2027 elections
…Raises concerns over proposed $5bn currency swap deal
By Peter Taiwo
The has warned that poverty and food insecurity could remain widespread in Nigeria despite improvements in the country’s macroeconomic indicators resulting from recent economic reforms.
The warning was contained in the IMF’s 2026 Article IV Consultation Report released on Tuesday, in which the global lender commended reforms undertaken by the Federal Government over the past three years but stressed that the benefits have yet to significantly improve living conditions for millions of Nigerians.
According to the report, the reforms have strengthened economic resilience and improved macroeconomic outcomes, helping to stabilize key economic indicators. However, the IMF noted that many Nigerians continue to face severe economic hardship.
The institution disclosed that poverty had risen to 63 per cent based on the national poverty line, while an estimated 27 million Nigerians experienced food insecurity during the latter part of 2025.
Despite these challenges, the IMF projected that Nigeria’s economy would grow by 4.1 per cent in 2026, slightly higher than the estimated four per cent growth recorded in 2025.
The report also highlighted renewed inflationary pressures, noting that consumer prices increased to 15.4 per cent year-on-year in March 2026 after a prolonged period of decline.
According to the IMF, rising international fuel and food prices have begun to exert fresh pressure on domestic prices, threatening gains made in controlling inflation.
To safeguard economic stability, the Fund advised the Federal Government to maintain a neutral fiscal stance throughout 2026 while prioritizing growth-enhancing investments and social protection programmes.
The institution emphasized the need to protect vulnerable households through expanded social spending and targeted interventions aimed at reducing poverty.
The IMF further cautioned against policy reversals, specifically urging the government not to reintroduce fuel subsidies despite mounting economic and political pressures.
It warned that election-related spending ahead of future political contests could undermine fiscal discipline and reverse recent economic gains if not carefully managed.
The report also expressed reservations about a proposed $5 billion total return swap arrangement reportedly included in Nigeria’s draft 2026 budget framework.
According to the IMF, the financing arrangement would require the government to provide collateral equivalent to 133 per cent of the transaction value in domestic securities.
The Fund explained that such an arrangement could expose the government to significant financial risks, particularly if the naira depreciates or domestic interest rates rise.
It warned that the transaction could trigger costly margin calls and potentially constrain future monetary and exchange-rate policy decisions.
The IMF also advised authorities to exercise caution in adopting complex financing instruments, arguing that such arrangements could increase fiscal vulnerabilities and complicate economic management.
On public spending, the institution urged the government to ensure that capital expenditure targets remain realistic and aligned with available resources.
The IMF endorsed the tight monetary policy stance adopted by the , noting that positive real interest rates remain appropriate in the face of persistent inflation risks.
It also called for the preservation of a flexible exchange-rate regime, the gradual removal of remaining foreign-exchange restrictions, and reduced dependence on short-term portfolio inflows.
Furthermore, the Fund urged authorities to intensify reforms in governance, security, electricity supply, agriculture, infrastructure and human capital development, stressing that these sectors remain critical to achieving stronger, more inclusive and sustainable economic growth in .
