Muhammad Basheer HotoroIn its 13-page World Economic Outlook update published on Monday, the Fund urged countries to pursue medium-term fiscal consolidation while maintaining prudent debt management frameworks.
The IMF projected that Nigeria’s economy would grow by 4.4 per cent in 2026, rising from an estimated 4.2 per cent in 2025, before moderating slightly to 4.1 per cent in 2027. This growth rate would place Africa’s largest economy above the projected global average of 3.3 per cent and close to the Sub-Saharan Africa average of 4.6 per cent.
The report emphasised the need for governments to broaden revenue bases, rationalise public spending, and improve efficiency, particularly through increased private sector participation.
“Efforts to replenish fiscal buffers should be anchored in realistic assumptions, including those regarding long-term spending pressures,” the Fund stated.
The IMF also cautioned against poorly targeted fiscal interventions, advising that discretionary support should be limited to firms and households most affected by economic shocks and designed with clear timelines.
“Any discretionary fiscal interventions must be strictly targeted and include explicit sunset provisions that make the actions temporary,” it said, warning that broad subsidies and poorly designed industrial policies could prove costly and distortive.
On monetary policy, the Fund stressed the importance of maintaining price stability in the face of global economic shifts. It noted that countries with inflation close to target could consider gradual interest rate cuts, while those experiencing elevated inflation should proceed cautiously.
The IMF further underscored the importance of central bank independence, describing it as critical to macroeconomic stability and long-term growth.
The report highlighted structural reforms and technological investment as key drivers of sustainable growth. According to the Fund, reforms in labour markets, education, competition, and regulation—alongside digital transformation and energy efficiency initiatives—could significantly boost productivity and economic potential.
The IMF concluded that transparent trade policies, strong financial oversight, and clear economic frameworks are essential to reducing uncertainty, attracting investment, and ensuring sustainable economic growth.
