By Abubakar Yunusa
The International Monetary Fund (IMF) has called for a tighter monetary policy in Nigeria to address persistent inflation, as part of recommendations following its 2025 Article IV Consultations held from April 2 to 15 in Lagos and Abuja.
Axel Schimmelpfennig, IMF mission chief for Nigeria, led a delegation that engaged with key figures, including Finance Minister Wale Edun, Agriculture Minister Abubakar Kyari, Central Bank of Nigeria (CBN) Governor Yemi Cardoso, and representatives from the private sector, academia, labour unions, and civil society.
In a statement, Schimmelpfennig commended Nigerian authorities for “important steps” to stabilise the economy, including ending CBN financing of fiscal deficits, removing costly petrol subsidies, and improving the foreign exchange market’s functionality.
“These reforms have put the Nigerian economy in a better position to navigate external challenges,” he said, noting the impact of elevated global risk sentiment and declining oil prices.
However, he warned that poverty and food insecurity remain high, with economic gains yet to reach all Nigerians.
Schimmelpfennig urged a neutral fiscal stance to complement monetary policy efforts in curbing inflation, recommending that savings from subsidy reforms be redirected to protect critical investments and expand cash transfers under a World Bank-supported programme to alleviate food insecurity.
The IMF official stressed the need for a “tight monetary policy stance” to guide inflation downward, praising the CBN’s data-dependent approach as effective in navigating macroeconomic uncertainty.
Authorities also assured the IMF that the 2025 budget would be implemented to address the decline in global oil prices.
The IMF’s recommendations come amid significant economic uncertainty, with Nigeria facing challenges from lower oil revenues and global market volatility.
Schimmelpfennig emphasised that sustained reforms are crucial to strengthen economic buffers and foster private sector-led growth.
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