The International Monetary Fund has called on Nigeria to intensify efforts toward inclusive growth, tighten fiscal discipline, and improve domestic revenue mobilisation as crucial steps toward long-term economic stability and prosperity.

In a blog post on Monday, IMF Mission Chief to Nigeria, Axel Schimmelpfennig, and Resident Representative, Christian Ebeke, praised recent reform efforts but cautioned that poverty and food insecurity remain high.

They also highlighted that global economic uncertainties continue to pose significant risks.

It stated, “To address these challenges, Nigeria should focus on three key priorities: First, the country needs stronger and more sustained growth to lift millions of people out of poverty and food insecurity, which is what the authorities are focusing on.

“This does not happen overnight. In the meantime, making growth more inclusive also requires scaling up the existing cash transfer system.

“Second, as an essential ingredient for economic development, Nigeria needs an effective budget framework.”

It added, “Delivering effective investments in people and infrastructure requires realistic budget assumptions, strong expenditure management, and transparent implementation and reporting, which, in turn, can strengthen accountability.

“For its part, monetary policy should continue to decisively tackle inflation and reduce economic uncertainty.

“Third, the government should continue to increase domestic revenues. This is essential given Nigeria’s substantial funding needs in growth-enabling areas such as agriculture, infrastructure, including access to electricity, and climate adaptation.

“The government’s tax reforms will make it easier to pay taxes and ensure that everyone who owes taxes pays them. Over time, once the ongoing cost-of-living crisis abates and the cash transfer system is fully operational, there will be room to align tax rates with those in neighboring countries.

“For now, the share of revenue that goes to interest spending leaves too little for investment in people and infrastructure.”

They stressed that Nigeria’s vast potential is clear, but unlocking it will require ongoing reforms and a strong social safety net to protect the most vulnerable.

While acknowledging the early gains of recent reforms, they warned that Nigeria continues to grapple with significant economic pressures.

Inflation remains persistently high, exceeding 20 percent, while poor infrastructure—especially the unreliable power supply—continues to undermine productivity and hinder private sector expansion.