The International Monetary Fund (IMF) has urged Nigeria and other major African economies to deepen reforms in fiscal policy, monetary and financial frameworks, and governance to strengthen macroeconomic stability and promote inclusive economic growth.
The IMF made the recommendation in its latest assessment of reform priorities across eight of Africa’s largest economies.
The Fund identified fiscal reforms as a key priority in seven of the eight economies reviewed, with Nigeria requiring improvements in tax policy, revenue administration, public financial management and spending efficiency.
It also identified the need to strengthen monetary policy frameworks and transmission mechanisms in Nigeria, Egypt and Ethiopia.
On governance, the IMF said Nigeria and other major economies should improve fiscal transparency, strengthen public financial management and enhance anti-corruption measures.
The Fund said implementing the recommendations would help countries mobilise domestic revenue and strengthen their economic institutions.
For Nigeria, the recommendations come as the Federal Government continues to implement its tax reform programme, which took effect in January 2026.
The reforms 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 has said the reforms are aimed at simplifying the tax system, eliminating duplicate taxes, improving compliance and expanding the revenue base, while reducing the burden on 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 showed 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.
The IMF’s call for stronger monetary policy frameworks also comes after a prolonged tightening cycle by the CBN.
Under Governor Olayemi Cardoso, the apex bank raised interest rates and tightened liquidity while implementing foreign exchange reforms aimed at tackling inflation and restoring confidence in the financial system.
The Monetary Policy Rate, which stood at 18.75 per cent in 2023, was raised to 22.75 per cent in February 2024 and reached 27.5 per cent by the end of that year.
The CBN also increased banks’ Cash Reserve Ratio from 32.5 per cent to 45 per cent in early 2024 and later raised it to 50 per cent as part of efforts to reduce excess liquidity.
The tightening cycle has since shifted towards gradual easing as inflationary pressures moderated and economic conditions improved.
However, Presidential aide Tope Fasua has called for a reassessment of the tight monetary policy stance, warning that prolonged high interest rates could constrain economic growth without delivering a corresponding reduction in inflation.
In June, the IMF also cautioned Nigeria over plans to raise up to $5 billion through a derivatives-based financing arrangement with First Abu Dhabi Bank, warning that such sovereign financing structures could expose countries to significant risks because their terms can be difficult to assess.
However, the Federal Government has continued to secure external financing for major infrastructure projects. In December 2025, it secured about $1.2 billion in financing from the United Arab Emirates for the construction of a key segment of the Lagos-Calabar Coastal Highway.
