On June 9, 2026, the International Monetary Fund (IMF) released the outcome of its 2026 Article IV Consultation on Nigeria. The assessment was largely positive. The IMF Executive Board commended the economic reforms undertaken by the administration of President Bola Ahmed Tinubu over the past three years, highlighting improvements in macroeconomic stability, stronger foreign reserves, fiscal reforms, banking sector resilience, and enhanced capacity to withstand external shocks. Shortly thereafter, the federal government, through the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, welcomed the report as an independent validation of the administration’s economic reform programme and a confirmation that Nigeria is moving in the right direction.
Both the IMF’s assessment and the federal government’s response deserve serious attention because together they reveal the central economic question confronting Nigeria today. How can a country simultaneously record notable improvement in macroeconomic indicators while a significant proportion of its citizens continue to experience economic hardship? The IMF sees an economy that is becoming more stable and resilient. Many Nigerians see an economy that remains difficult to live in. The reality is that both observations can be true at the same time. Understanding this apparent contradiction is essential to understanding where Nigeria stands today and what must happen next.
The IMF’s assessment acknowledges something that even critics of government policy should concede: some of the most difficult economic reforms in Nigeria’s recent history have already been undertaken. For decades, economists and development institutions warned that Nigeria’s economic model was unsustainable. Fuel subsidies consumed enormous fiscal resources, multiple exchange-rate windows distorted markets, deficit financing weakened monetary discipline, and weak domestic revenue mobilisation left the government heavily dependent on oil revenues and borrowing.
The Tinubu administration chose to confront these distortions directly. Fuel subsidies were removed, the foreign exchange market was liberalised, deficit monetisation was curtailed, tax reforms were initiated, and bank recapitalisation commenced. These decisions carried significant short-term costs and generated understandable public resistance. However, from a macroeconomic perspective, they were aimed at correcting structural weaknesses that had accumulated over many years. The IMF’s report suggests that some of the intended outcomes are beginning to emerge.
According to the IMF, Nigeria’s economy grew by approximately four percent in 2025 and is projected to maintain a similar trajectory in 2026. Gross international reserves increased from about $40 billion at the end of 2024 to nearly $46 billion by the end of 2025. Inflation, although still elevated, has fallen substantially from the levels experienced during the height of economic adjustments. The banking sector remains resilient, while Nigeria’s removal from the Financial Action Task Force (FATF) grey list has strengthened confidence in the country’s financial integrity framework. These developments suggest that the foundations of economic management are becoming stronger and that the economy is less vulnerable to shocks than it was only a few years ago.
Yet the same report that commends these achievements also contains a sobering reality. The IMF estimates that poverty has reached 63 percent based on Nigeria’s national poverty line. It further estimates that approximately 27 million Nigerians experienced food insecurity during the latter part of 2025. These figures should command as much attention as the positive macroeconomic indicators because they remind us that economic reform is not an end in itself. The ultimate purpose of economic policy is to improve the welfare of citizens, not merely to improve statistics.
This is where Nigeria’s reform paradox becomes most evident. It is entirely possible for foreign reserves to increase while households struggle to afford basic necessities. It is possible for inflation to decline from previous highs while prices remain unaffordable for many families. It is possible for investor confidence to improve while unemployment and underemployment continue to affect millions of young people. Macroeconomic improvement and social hardship can coexist during periods of economic transition. The challenge for policymakers is ensuring that the first eventually translates into the second.
One of the recurring mistakes in public discourse is the tendency to confuse economic stabilisation with economic development. Stabilisation focuses on restoring balance to the economy by addressing inflation, exchange-rate distortions, fiscal deficits, and external vulnerabilities. Development concerns the expansion of opportunities, the creation of productive jobs, the reduction of poverty, and the improvement of living standards. Stabilisation creates the conditions for development, but it does not automatically produce development. A country may successfully stabilise its economy without achieving broad-based prosperity if structural constraints remain unresolved.
The IMF itself recognises this distinction. Beyond macroeconomic reforms, it identified governance, security, electricity, agriculture, infrastructure, and human capital development as priority areas requiring sustained attention. These are not peripheral concerns. They are the sectors that determine whether economic growth becomes inclusive and transformative. An economy cannot achieve sustainable industrialisation without reliable electricity. Agricultural productivity cannot expand significantly where insecurity prevents farmers from accessing their land. Private investment cannot flourish where infrastructure deficits increase the cost of doing business.
Particularly noteworthy is the IMF’s recognition of insecurity as a major risk to economic performance. Too often, security is treated as a separate issue from economic policy. In reality, security is one of the most important economic variables in any society. Farmers cannot cultivate crops where communities are under threat. Businesses cannot invest confidently in unstable environments. Supply chains become disrupted, and food prices rise when agricultural production is constrained by insecurity. The constitutional provision that the security and welfare of the people shall be the primary purpose of government is therefore not merely a political statement; it is also an economic principle.
The governance dimension of the IMF’s report may be even more significant. The Fund expressed concerns about off-budget spending, fiscal transparency, public financial management, fiscal reporting, and accountability. While these observations may appear technical, they address one of Nigeria’s most persistent development challenges. Countries do not become prosperous solely because they adopt sound economic policies. They become prosperous because they build institutions capable of implementing those policies consistently and transparently. Strong institutions create predictability, attract investment, improve service delivery, and enhance public trust.
This issue becomes particularly important as Nigeria seeks to expand domestic revenue mobilisation. The recent tax reforms represent an important attempt to strengthen the country’s fiscal capacity. However, taxation and accountability are inseparable. Citizens are generally more willing to comply with tax obligations when they can see evidence that public resources are being managed effectively and translated into public goods. Revenue mobilisation cannot be sustained through policy measures alone; it must be supported by trust in public institutions.
The federal government’s response to the IMF report rightly emphasised that the ultimate objective of reform is not improved economic indicators but better outcomes for Nigerians. The success of the next phase of reform will therefore not be judged primarily by reserve levels, exchange-rate stability, or sovereign credit ratings. Those indicators remain important, but they are intermediate outcomes rather than final objectives. The true test of reform is whether citizens experience meaningful improvements in their daily lives.
This requires a shift in the way success is measured. Policymakers must increasingly focus on questions that resonate with citizens. Are more Nigerians escaping poverty? Are food prices becoming more affordable? Are businesses creating sustainable jobs? Is the electricity supply improving? Are healthcare and educational outcomes getting better? Are rural communities becoming more secure? These are the questions that determine whether reform is inclusive and sustainable.
The broader lesson from the IMF assessment is that Nigeria has largely completed the first phase of reform. The difficult task of correcting major macroeconomic distortions is underway and is beginning to produce measurable results. The second phase, however, is likely to be even more challenging. It requires translating macroeconomic stability into widespread prosperity. It requires strengthening institutions, deepening accountability, improving security, expanding infrastructure, modernising agriculture, and investing in human capital.
The IMF’s endorsement should therefore neither be dismissed nor celebrated uncritically. It is not a declaration that Nigeria’s economic challenges have been solved. Rather, it is an acknowledgment that important reforms have improved the country’s economic foundations and reduced vulnerabilities that threatened long-term stability. That achievement deserves recognition. At the same time, the report serves as a reminder that strong foundations are only valuable if they support a structure that benefits the broader population.
Ultimately, the debate is no longer about whether reform was necessary. The more important question is whether reform can become inclusive enough to improve the welfare of ordinary Nigerians. The IMF has confirmed that Nigeria’s economic foundations are stronger than they were three years ago. The challenge before government, business, civil society, and citizens is to ensure that those stronger foundations support a more prosperous, equitable, and secure society. Until the benefits of stability become visible in the lives of ordinary Nigerians, Nigeria’s reform story will remain unfinished.
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John Onyeukwu, is a lawyer and public policy analyst with interdisciplinary expertise in law, governance, and institutional reform. He holds an LL.B (Hons) from Obafemi Awolowo University, an LL.M from the University of Lagos, and dual master’s degrees in Public Policy from the University of York and Central European University. He also earned a Mini-MBA. John has managed development projects on governance, public finance, civic engagement, and service delivery. He can be reached on john@apexlegal.com.ng
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