IMF urges deeper fiscal, monetary reforms in Nigeria

IMF urges deeper fiscal, monetary reforms in Nigeria

The International Monetary Fund (IMF) has urged Nigeria and other leading African economies to intensify fiscal, monetary and governance reforms to strengthen economic stability and promote broader-based growth.

The recommendation was contained in the IMF’s latest assessment of reform priorities across the

African Union’s eight largest economies.

According to the IMF, fiscal reform remains a major priority for almost all the economies assessed, with Nigeria requiring further improvements in tax policy, revenue collection, public financial management and the efficiency of government spending.

The Fund also identified stronger monetary policy frameworks and transmission mechanisms as key priorities for Nigeria, Egypt and Ethiopia.

For Nigeria, the IMF said governance reforms should focus on improving fiscal transparency, strengthening public financial management and enhancing anti-corruption measures.

The Fund said implementing the recommendations would help countries mobilise more domestic revenue and build stronger economic institutions capable of supporting sustainable and inclusive growth.

Nigeria is currently implementing a broad tax reform programme aimed at simplifying the tax system, expanding the revenue base and improving compliance.

The reforms, which commenced in January 2026, introduced a new framework through the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act and Joint Revenue Board (Establishment) Act. The government expects the reforms to eliminate overlapping taxes, harmonise tax administration and reduce compliance burdens, particularly for smaller businesses.

However, businesses continue to raise concerns over multiple taxes and government levies.

The Central Bank of Nigeria’s July 2026 Business Expectations Survey found that 70.8 per cent of respondents identified high and multiple taxation as the biggest constraint to business operations, ahead of insecurity and high interest rates.

On monetary policy, the IMF’s recommendation comes after an aggressive tightening cycle by the

CBN under Olayemi Cardoso.

The Monetary Policy Rate, which stood at 18.75 per cent in 2023, was raised repeatedly in 2024, reaching 27.5 percent by the end of that year.

The apex bank also tightened liquidity conditions through higher cash reserve requirements for banks as part of efforts to contain inflation and improve macroeconomic stability.

The CBN has since moved into a gradual easing phase as inflationary pressures have moderated and economic conditions improved.

The IMF has continued to monitor Nigeria’s financing strategy. In June, it cautioned the Federal Government over a proposed $5bn derivatives-based financing arrangement, warning that such structures could expose the country to significant financial risks because of the complexity of their terms.

Source: https://punchng.com/imf-urges-deeper-fiscal-monetary-reforms-in-nigeria/