The International Monetary Fund (IMF) has commended the Central Bank of Nigeria (CBN) for its firm stance on monetary tightening, describing it as a major contributor to the country’s recent economic stabilization. In its latest Article IV Consultation, the IMF emphasized that the CBN’s sustained interest rate hikes have been instrumental in curbing inflationary pressures and restoring investor confidence.
According to the IMF, Nigeria has made notable progress through several economic reforms, including the removal of fuel subsidies, elimination of monetary financing of fiscal deficits, and efforts to unify the foreign exchange market. These steps, the Fund noted, have not only enhanced policy credibility but also enabled Nigeria’s return to international capital markets and spurred an increase in foreign capital inflows.
The report highlighted that real GDP grew by 3.4% in 2024, driven largely by improved oil production and a vibrant services sector. Inflation, which had surged to around 31% in the previous year, declined to 23.7% as of April 2025, thanks to tighter monetary conditions and exchange rate adjustments. In addition, the CBN’s measures helped narrow the gap between the official and parallel market exchange rates, reducing market distortions.
The IMF also praised the federal government’s fiscal efforts, including a sharp reduction in Ways and Means advances and improved tax collection, which have contributed to macroeconomic stability. It urged Nigerian authorities to sustain these reforms, accelerate social safety programs, and increase investments in key sectors like health, education, infrastructure, and agriculture to achieve inclusive growth.
While acknowledging the progress made, the Fund advised caution in relaxing monetary policy, stressing the importance of continued coordination between fiscal and monetary authorities. It encouraged Nigeria to further strengthen its financial institutions, improve data transparency, and maintain a consistent policy framework to ensure long-term economic resilience.
