Maha Christopher
Nigeria’s leading economists and financial experts have expressed mixed reactions to the latest policy recommendations issued by the International Monetary Fund, endorsing some proposals while rejecting others.
According to Vanguard, the IMF, in its 2026 Article IV Mission Concluding Statement, advised Nigeria against a proposed $5 billion loan from First Abu Dhabi Bank, citing concerns over the collateral requirements attached to the facility.
The Fund also recommended a possible increase in Value Added Tax, continued monetary tightening by the Central Bank of Nigeria, caution against excessive reliance on foreign portfolio investments, expanded cash transfer programmes and improved transparency in government spending.
Reacting to the IMF’s position, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, agreed with the Fund’s concerns over the proposed external borrowing.
According to him, Nigeria must be more cautious in accumulating debt, especially as a significant portion of government revenue is already being devoted to servicing existing obligations.
“A substantial share of public revenue is now devoted to debt-service obligations, leaving less fiscal space for infrastructure, healthcare, education, security and other growth-enhancing investments,” Yusuf said.
Similarly, Head of Equity Research at Quest Merchant Bank, Tunde Abidoye, backed the IMF’s warning on the Abu Dhabi loan, describing its structure as potentially risky.
“The IMF is right on this. Since the loan is essentially a derivative, it entails significant volatility which could crystallise through margin calls in the event of adverse shocks such as a sharp drop in oil prices,” he said.
However, Chief Economist at United Capital Plc, Ayodele Akinwunmi, argued that foreign borrowing could still be beneficial if directed towards critical infrastructure projects capable of stimulating economic growth.
The IMF’s recommendation for an increase in VAT also generated opposition among analysts.
Abidoye argued that Nigerians had already borne the burden of major economic reforms and that increasing VAT at this time could worsen hardship.
“I do not think the timing is right for a VAT increase,” he stated.
Akinwunmi also rejected the proposal, insisting that government should focus on improving tax compliance rather than increasing tax rates.
“What Nigeria needs is not higher tax rates but broader tax compliance,” he said.
On monetary policy, analysts were divided over the IMF’s support for continued tightening by the Central Bank.
While some experts agreed that inflationary pressures remain a concern, others warned that further interest rate hikes could weaken investment, business expansion and job creation.
David Adonri, Executive Vice Chairman of High Cap Securities Limited, supported the IMF’s recommendation for tighter monetary policy, arguing that inflation had not yet been sufficiently controlled.
The economists also agreed with the IMF’s warning against excessive dependence on foreign portfolio investments, stressing the need to attract more foreign direct investment capable of supporting long term economic growth and productive activities.
The Federal Government, meanwhile, welcomed the IMF report, describing it as an endorsement of ongoing economic reforms.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the findings reflected growing confidence in the government’s reform agenda and efforts to strengthen macroeconomic stability.
The IMF projected that inflation would moderate in the second half of the year, while noting that recent reforms had contributed to improved economic stability despite persistent challenges.
