In its usual characteristic manner of speaking from both sides of the mouth, the 2026 report of the International Monetary Fund (IMF) on Nigeria, which contains 50 paragraphs (and 88 pages inclusive of the preliminary section), did not disappoint. In its double-speaking manner, it reported that strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult. Poverty reached 63 percent (national poverty line) and 27 million Nigerians are estimated to have faced food insecurity in the fall of 2025. Ordinarily, this will be taken as an objective assessment of the economic situation in Nigeria, but a closer examination of the detailed recommendations in the report exposes this manner of speaking from both sides of the mouth.
However, this observation does not remove the fact that this report (like many other IMF reports) was a very well-detailed and meticulously written piece of work with all the necessary statistics (tabular and graphic) and very relevant annexes. But still the manner of double speaking remains. The details of this doublespeak are likely to be unknown or ‘hidden’ from those who read only the Press Release No. 26/190 titled: IMF Executive Board Concludes 2026 Article IV Consultation with Nigeria, and dated June 9, 2026. For instance, in that press release which was widely reported in the press, one would not likely pick the most worrisome recommendations made by the IMF in the detailed version of the report, as far as ordinary Nigerians are concerned. These slightly obscured worrisome recommendations are contained in paragraph 20, page 17, which simply put, said that: further tax policy changes will likely be needed – such as increasing the VAT rate, extending VAT to fuel products, rationalizing VAT expenditures in particular VAT exemptions on extractive industries and some customs duties, and introducing telecom excises – to complement administrative gains (See https://www.imf.org/-/media/files/publications/cr/2026/english/1ngaea2026001.pdf). Fortunately, the Federal Government has responded promptly that it has no plans to implement this advisory.
Substantively speaking, the contradiction in the IMF report is as follows: on the one hand, ‘strong reforms over the past three years have yielded improved macroeconomic outcomes, and built resilience’, and on the other hand, conditions for many Nigerians remain difficult as poverty increased to 63 percent. But if poverty is rising amidst ‘improved macroeconomic outcomes’, where are the gains going to or who benefits from the improved macroeconomic outcomes? And again, if poverty is increasing and many Nigerians are suffering, why then will the IMF still go ahead to recommend increased fuel and telecom taxes? One of its major recommendations of reducing poverty is that the upscaling of the cash transfer system would solve the problem of the poor and vulnerable groups. But the Nigeria of today goes beyond the suffering of the poor and vulnerable groups. The truth is that many people across social classes are suffering from serious deprivation, as income of workers are insufficient to cope with increased economic hardship. The middle class is virtually wiped out and its members are struggling to pay their house rents, as many of them are still living in rented accommodation.
Without mincing words, the policy trajectory of the President Bola Ahmed Tinubu administration falls within the prescription of the IMF as well as the World Bank. We are familiar with the prescription of ‘remove fuel subsidy and devalue the Naira’ both of which had been on the table for many years before the emergence of the Tinubu administration in 2023. The implementation of both of these policy prescriptions by the Tinubu administration is what the diehard supporters of the administration frequently refer to as his bold economic reforms. According to them, without these reforms, Nigeria’s economy would have collapsed long ago.
However, as Nigeria implements these bold reforms, the celebrated gains not improving the economic condition of Nigerians. And to make matters worse, the debt profile of Nigeria is rising astronomically to the extent that the same IMF is warning that Nigeria will spend over half of its revenue on debt servicing by 2026, which according to the Business Day, threatens to cripple funding for critical infrastructure, health and education (Business Day, June 17, 2026). Specifically, debt servicing takes 53.7% of revenue in 2026, up from 40.8% in 2024, and yet the same IMF gives the false hope that Nigeria’s overall debt level is still statistically sustainable, implying that Nigeria can still borrow more from the willing IMF. Is Nigeria not being led to serious debt trap to the level that it has not experienced before?
A further look at some of the other recommendations of the IMF, indicates that Nigeria is moving in that debt trap trajectory. For example, the IMF said that ‘tight macroeconomic policies and continued reforms supported by technical assistance from the Fund and other partners will be crucial to preserve stability and boost inclusive growth.’ If Nigeria accepts this recommendation for example, it means that more borrowing from the IMF and other development partners will become inevitable and Nigeria will enter into a trajectory of debt trap cycle.
Responding to the IMF report, the Federal Government through the Honourable Minister of Finance and the Coordinating Minister of the Economy Mr. Taiwo Oyedele said that the government ‘notes IMF assessment of Nigeria’s economy and remains committed to sustaining reform momentum.’ Again, he said that ‘the report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu, GCFR, are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth. (emphasis added).
This is a familiar response. For example, since the administration of President Ibrahim Babangida in the mid-1980s, every successive administration has been saying that Nigeria is ‘laying the foundation for sustainable development,’ and sometimes, they would add ‘and inclusive growth.’ The question this writer has been asking over the years (in response to this recurring claims) is that when will Nigeria move beyond the foundation laying stage of its development? And as if to signal that Nigeria will remain perpetually at the foundation laying stage, the government affirmed that ‘Nigeria is moving in the right direction and is better positioned to withstand global economic uncertainties than at any time in recent years.’ But there is doubt whether this policy trajectory will lead Nigeria out of the economic doldrums, thereby keeping her at the foundation laying stage of development with the cycle of hardship continuing. This sadly has been our story since the Babangida regime introduced the Structural Adjustment Programme (SAP) in July 1986, following the advice of the same Bretton Woods institutions (IMF & World Bank).
Prof. Obasi, a public policy expert, is of the Department of Public Administration at the Yakubu Gowon University, Abuja (formerly University of Abuja).
