The International Monetary Fund (IMF) has called on Nigeria and other major African economies to deepen reforms across fiscal policy, monetary and financial sectors, and governance to strengthen macroeconomic stability and promote more inclusive economic growth.
In its latest assessment of reform priorities across the African Union’s largest economies, the IMF identified fiscal reforms as a high priority in seven of the eight economies reviewed, including Nigeria.
For Nigeria, the Fund highlighted the need to improve tax policy, revenue administration, public financial management and spending efficiency.
The IMF also identified stronger monetary policy frameworks and transmission as a priority for Nigeria, Egypt and Ethiopia. In the area of governance, it called for greater fiscal transparency, stronger public financial management and improved anti-corruption practices in Nigeria and other major African economies.
The Fund said the reforms should focus on strengthening domestic revenue mobilisation while ensuring that public spending becomes more efficient and transparent.
“Adopting these recommendations can help support strong, sustainable, balanced, and inclusive growth by mobilizing domestic revenue and strengthening macroeconomic institutions,” the IMF stated.
The recommendations come as the Federal Government continues to implement a broad tax reform programme aimed at simplifying Nigeria’s tax system, improving compliance and expanding the country’s revenue base.
The reforms, which took effect in January 2026, established a new framework through the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act and Joint Revenue Board (Establishment) Act.
The measures are designed to eliminate duplicate taxes, harmonise tax administration, improve compliance and reduce the tax burden on smaller businesses.
Despite the reforms, businesses continue to report challenges associated with multiple taxes and government levies.
The Central Bank of Nigeria’s July 2026 Business Expectations Survey showed that 70.8% of respondents identified high and multiple taxation as the biggest constraint to business operations. Insecurity and high interest rates were also identified among the major challenges facing businesses.
The IMF’s call for improvements to Nigeria’s monetary policy framework also comes after an aggressive monetary tightening cycle by the Central Bank of Nigeria (CBN) in recent years.
Following the appointment of Olayemi Cardoso as CBN Governor in 2023, the apex bank pursued tighter monetary and liquidity conditions alongside foreign exchange reforms aimed at addressing inflation, restoring market confidence and improving macroeconomic stability.
The Monetary Policy Rate stood at 18.75% in 2023 before the CBN embarked on a series of rate increases in 2024. The benchmark rate was raised to 22.75% in February 2024 and eventually reached 27.5% by the end of the year.
The CBN also tightened liquidity conditions through changes to banks’ Cash Reserve Ratio, raising the requirement from 32.5% to 45% in early 2024 and subsequently to 50% as part of efforts to absorb excess liquidity.
The tightening cycle has since given way to a gradual easing phase as inflationary pressures moderated and economic conditions improved.
However, Presidential aide Tope Fasua has called for a rethink of the tight monetary policy stance, arguing that prolonged high interest rates could constrain economic growth without necessarily delivering the desired reduction in inflation.
The IMF has also raised concerns over some of Nigeria’s proposed financing arrangements.
In June, the Fund cautioned Nigeria over plans to raise up to $5 billion through a derivatives-based financing arrangement with First Abu Dhabi Bank.
The IMF warned that derivative-based sovereign financing arrangements could expose countries to significant risks because their terms can be difficult to assess.
The latest recommendations therefore place Nigeria’s fiscal, monetary and governance reforms under renewed scrutiny as the government seeks to increase revenue, improve economic efficiency and sustain growth.
The IMF’s position also underscores the need for reforms to go beyond policy changes and translate into stronger institutions, more transparent public finances and a business environment that supports investment and private-sector growth.
