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

The International Monetary Fund stated on Tuesday, June 9, that reforms carried out by the Nigerian government have strengthened the country’s economy, but warned that more than 60 percent of Nigerians now live in poverty.

Since assuming office just over three years ago, President Bola Tinubu has eliminated a costly fuel subsidy that had kept petrol prices artificially low for decades, floated the naira exchange rate, and overhauled the nation’s tax system.

While economists have said these policy changes were long overdue, poverty has continued to rise, affecting 63 percent of the population by the end of 2025. More than 27 million people experienced food insecurity during that 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 following its annual review of the Nigerian economy. “Still, conditions for many Nigerians remain difficult,” it said.

Poverty has been increasing in Africa’s most populous nation for years. The World Bank reported last year that approximately 61 percent of the country’s population lived in poverty, up from 40 percent in 2019. Three-quarters of that increase occurred before Tinubu took office in 2023, the World Bank noted at the time. Widespread insecurity caused by armed groups, particularly in the north where most of the country’s food is grown, represents “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, reaching 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, following four percent in 2025.

The IMF warned that while higher costs for food, fertiliser, and fuel could boost Nigeria’s revenues, the country remains Africa’s largest oil producer. However, these increases 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.