Nigeria’s leading economists and financial analysts have expressed differing views on the latest IMF economic prescriptions for the country, although many agree with the International Monetary Fund’s concerns regarding the Federal Government’s proposed $5 billion borrowing plan from First Abu Dhabi Bank in the United Arab Emirates.
The debate follows the IMF’s 2026 Article IV Mission Concluding Statement, which assessed Nigeria’s economic outlook and policy direction. Among the Fund’s recommendations were warnings against the proposed external loan, calls for an increase in Value Added Tax (VAT), continued monetary tightening by the Central Bank of Nigeria (CBN), reduced dependence on portfolio investments, expanded social intervention programmes, greater budget transparency and fiscal discipline.
The IMF also projected that inflation would moderate in the second half of 2026 while noting that ongoing reforms have contributed to improved macroeconomic stability.
The Federal Government described the IMF report as an endorsement of its reform agenda. Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the findings reflected growing confidence in the government’s economic direction.
“The report provides further independent validation that the bold and necessary reforms undertaken under the leadership of President Bola Ahmed Tinubu, are strengthening macroeconomic stability, restoring confidence, and laying the foundation for sustainable and inclusive growth,” he stated.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, supported the IMF’s reservations about the planned $5 billion facility from First Abu Dhabi Bank. According to him, Nigeria’s growing debt-service obligations have become a major fiscal concern, reducing resources available for infrastructure, healthcare, education and security.
“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.
Head of Equity Research at Quest Merchant Bank, Mr. Tunde Abidoye, also agreed with the IMF’s concerns, describing the proposed financing arrangement as risky because it is structured as a total return swap.
“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, Mr. Ayodele Akinwunmi, argued that foreign borrowing could be beneficial if channelled into productive infrastructure projects capable of stimulating economic growth.
Opinions also differed on other IMF economic prescriptions, particularly the recommendation to increase VAT. Abidoye opposed the proposal, arguing that Nigerians have already absorbed significant economic pressures resulting from recent reforms. Akinwunmi similarly rejected a VAT increase, insisting that broadening tax compliance would be more effective than raising tax rates.
“What Nigeria needs is not higher tax rates but broader tax compliance. Expanding the number of individuals and institutions paying taxes will strengthen government revenue without stifling growth,” he said.
David Adonri, Executive Vice Chairman of High Cap Securities Limited, also disagreed with the IMF’s VAT recommendation, warning that higher consumption taxes could worsen poverty levels. On monetary policy, economists offered mixed reactions. While Adonri supported tighter monetary measures to combat inflation, Akinwunmi cautioned that additional interest rate increases could undermine economic growth.
Despite their differences, analysts largely agreed with the IMF’s position that Nigeria should reduce excessive reliance on Foreign Portfolio Investments (FPIs) and attract more Foreign Direct Investment (FDI).
They argued that long-term capital inflows are more effective in supporting production, job creation and sustainable economic expansion. The economists also endorsed targeted social intervention programmes, stressing that welfare initiatives should be complemented by skills development and employment opportunities.
The debate surrounding the latest IMF economic prescriptions highlights differing perspectives on the best path toward economic stability and growth. While experts broadly support caution on new external borrowing and efforts to attract productive investments, opinions remain divided on VAT increases, debt management and the future direction of monetary policy in Nigeria.
