The tough economic reforms implemented by the government of President Bola Ahmed Tinubu since he came to power in May 2023 have done little to reduce high levels of poverty in Nigeria, the International Monetary Fund (IMF) said in a report on Friday.

"The Nigerian authorities have taken important steps to stabilize the economy, enhance resilience, and support growth," IMF mission chief for Nigeria Axel Schimmelpfennig said in a statement.

However, "Gains have yet to benefit all Nigerians as poverty and food insecurity remain high," he added.

Over half of Nigerians live in poverty

Schimmelpfennig visited Lagos and Abuja between April 2 and 15 where he met with ministers, central bank officials, the private sector, academia, labor unions, and civil society. His statement on Friday was a result of those consultations.

The IMF provides loans to, mostly, developing economies in exchange for reforms. It has been criticized for binding financial relief to reform proposals that have often made life more difficult in affected countries. The UN institution has provided several loans to Nigeria in the past.

Schimmelpfennig's comments  come amid increasing social disruption in Africa's most populous country, fueled by inflation and an escalating cost-of-living crisis.

In October, the World Bank reported that more than half of Nigeria's population —  around 129 million people — was below the poverty line, The report said that poverty rates have soared in the past six years.

What did the IMF say about Nigeria?

Schimmelpfennig's statement praised Tinubu's ending of fuel subsidies, highlighting improvements of the foreign exchange market and changes regarding Nigeria's fiscal debt.

"The reforms since 2023 have put the Nigerian economy in a better position to navigate this external environment," the IMF official added.

At the same time, the IMF official said that the outlook was marked by "significant uncertainty" due to lower oil prices — affecting Nigeria's export earnings — and an increased feeling of global risk.

According to the statement, the Nigerian government said it would respond to declining oil prices in its 2025 budget. Schimmelpfennig also called for monetary policies to reduce inflation as well as the channeling of savings from the fuel subsidy into the budget.

"In particular, adjustments should protect critical, growth-enhancing investment, while accelerating and broadening the delivery of cash transfers under the World Bank-supported program to provide relief to those experiencing food insecurity," the statement said.

Edited by: Darko Janjevic