Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has said that strong financial backing should come in form of innovative support instruments to reform-minded economies as they implement bold economic transformation agenda.
He spoke at the G-24 Ministerial Meeting, on the sidelines of the IMF/World Bank meetings.
He urged the Bretton Woods institutions to extend stronger financial backing to reform-minded economies, particularly in Sub-Saharan Africa.
Also yesterday, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso outlined the gains of the economic reforms embarked on by the President Bola Ahmed Tinubu’s government. He noted that while the economic reforms were difficult, they have started bearing positive results.
Cardoso, who spoke during Nigeria Investor Presentation organised by JP Morgan at the ongoing IMF/World Bank meetings, pointed at stability in exchange rate, stronger economic buffers, dip in inflation numbers, increased foreign investors’ participation and improved sovereign rating as evidence of the early success of macroeconomic reforms.
The CBN boss said the adoption of orthodox monetary policy would be sustained, because it has helped the economy to navigate difficult path to a point of stability.
At a supplementary meeting, Chairman, Senate Committee on Interparliamentary Worldwide, Senator Jimoh Ibrahim, underscored the importance of accurate and comprehensive data to effective development, calling on the World Bank to support the development of African data bank.
The IMF acknowledged that mid to long-term gains of the removal of subsidy on Premium Motor Spirit (PMS), popularly known as petrol, may take time to materialise.
The Bretton Woods institution also expressed concerns over deteriorating global fiscal outlook and called on countries to develop comprehensive strategies to mitigate exposures to global vulnerabilities.
At the Fiscal Monitor session of the ongoing IMF/World Bank Annual Meetings in Washington DC, the IMF stated that removal of subsidy and spending of subsidy savings could take time to impact on the people, as against the immediate impact of the removal on people’s incomes.
Deputy Director, IMF’s Fiscal Affairs Department, Era Dabla-Norris, explained that while petrol subsidy removal impacts people’s income immediately, there are more tangible benefits like energy efficiency and ability to reallocate fiscal savings that would take time to materialse.
She called on the Federal Government to think about a comprehensive strategy on ways to ensure that petrol subsidy removal impacts positively on the people.
She also noted that Nigeria can raise more revenue through taxes, with such funds serving as buffer to support economic stability.
Director, Fiscal Affairs Department, IMF, Vitor Gaspar said that the global fiscal outlook has deteriorated since the October 2024 Fiscal Monitor.
He explained that major tariffs announcements, heightened uncertainty, financial market volatility, and diminishing foreign aid are adversely affecting public debts and deficits.
According to him, the global public debt is now projected to reach nearly 100 per cent of GDP by the end of the decade, surpassing the pandemic peak, with gross financing needs set to rise significantly.
He said: “Sudden and disruptive tightening of financing conditions present a clear and present danger. Consequently, fiscal policy now faces a more pronounced trade-off among four key objectives: reducing debt, building and expanding buffers to address future shocks, meeting urgent spending needs, and enhancing growth prospects.”
Addressing global financial leaders and policy influencers, Edun made a case for rewarding economies undertaking difficult, yet necessary reforms.
He stated that beyond acknowledging reform efforts, it was imperative for the international financial community to expand access to affordable, sustainable financing tailored to support long-term economic transitions.
Edun, who spoke in his dual capacity as a national representative and as First Vice-Chair of the G-24 – a group of developing nations working to coordinate positions on monetary and development issues, explained that under the Tinubu’s leadership, Nigeria is pursuing an ambitious reform agenda designed to restore macroeconomic stability, foster inclusive growth, and position the country for long-term prosperity.
According to him, the measures taken so far included the removal of fuel subsidies, the unification of foreign exchange windows, and an ongoing overhaul of the tax system to broaden the revenue base and improve fiscal efficiency.
“These decisions are not easy, but they are necessary for laying the foundation for a more resilient and inclusive economy that works for all Nigerians,” Edun said.
The minister reiterated the call to global investors to take advantage of emerging opportunities in the country, declaring that “Nigeria is open for business”.
He said Nigeria remains ready to engage with development partners, investors, and multilateral institutions in advancing its economic transformation agenda.
He commended the IMF’s recent creation of a third Sub-Saharan Africa Chair – a move widely viewed as an effort to enhance the region’s voice and participation within the institution.
Edun called for this momentum to continue through expanded African representation in leadership and decision-making roles within the Bretton Woods institutions.
Cardoso, citing relevant statistics, said the reforms have removed bottlenecks to investment flows, closed exchange rate gap, stimulate diaspora communities’ appetite and remittances, and gradually gaining global acknowledgement.
He noted that the recent Fitch Ratings upgrade had applauded the exchange rate unification, which reduced arbitrage in the markets as well as the introduction of electronic foreign exchange (forex) matching platform and a new forex code to enhance transparency and efficiency in the market.
The CBN boss said: “The numbers speak for themselves. The difficult reforms that were undertaken have begun to bear fruits. The orthodox monetary policy is a route we can’t compromise on.
“For adopting orthodox monetary policy, we have been able to stabilise the macroeconomic credentials of the economy”.
He said the foreign investors have seen these developments, and raised their investments and commitments in the domestic economy.
Cardoso explained that through a period of tough global situation and particularly challenging domestic crisis period, Nigeria, through the reforms, has been able to build a stronger economy, through difficult decisions taken by fiscal and monetary authorities.
He pointed out that Nigeria now has a competitive naira, which is a game changer that should attract investors to the economy, noting that with a competitive naira, foreign direct investments (FDIs) inflows prospects to the economy has risen.
He added that the ongoing efforts on the ease of doing business would further support investment inflows.
Edun buttressed that the government is targeting more than a double in economic growth, from the current three per cent to seven per cent growth.
He explained that the growth is expected to come from accelerated activities in the agricultural sector, infrastructure building and financial sectors transformation, in terms of efficient payment and banking sector stability.
He said investors are getting more confidence on the currency and in investing in the economy.
“I am confident that if we continue in the direction we have gone so far, we will continue to see progress in what we are doing,” the minister said.
Edun said the new appointments at the Nigerian National Petroleum Company Limited (NNPCL) would help boost oil production.
According to him, there are ongoing strategic efforts to ensure that NNPCL stimulate increase in oil production.
Director-General of the Debt Management Office (DMO), Patience Oniha, said the Federal Government is working with JP Morgan, to return to the JP Morgan index.
She said government is confident it will return to the index to boost investment flows to the economy.
The IMF called on countries with limited fiscal space to prioritise public spending within their planned budgets and allow automatic stabilisers to operate fully.
The Fund said higher tariffs generally lead to a reduction in imports, with the extent of this decline depending on the price elasticity of demand at the bilateral product-country level.
“In addition, rising future debt could add further pressure on long-term interest rates and government financing costs. New analysis confirms that higher expected future debt and deficits could lead to higher long-term interest rates,” the Fund stated.
According to it, emerging market and developing economies should reduce spending and increase revenues by reforming tax systems, broadening tax bases, and improving revenue administration.
Additionally, such countries should rationalise public wage bills while safeguarding public investment and upgrading social safety nets. Reforming state-owned enterprises is essential to enhance resource allocation, foster sector growth, and mitigate fiscal risks.
It stated: “Countries with low tax-to-GDP ratios must reassess existing tax rates and thresholds, particularly for the value-added tax (VAT) and personal income taxes. Others might consider increasing VAT rates, reintroducing goods and services taxes, and rationalising tax expenditures.
“Enhancing fiscal and debt governance, along with debt transparency, is essential to improve efficiency and mitigate debt risks. Countries must proactively identify and manage contingent liabilities, particularly those related to state-owned enterprises”.
According to the IMF, governments should provide clear, detailed, and timely information about debt, including creditor composition and exposure to risks, such as interest rate and exchange rate risks. This transparency, which would benefit from sound legal underpinnings, fosters scrutiny and accountability, and reduces dependence on nontraditional debt instruments.
It explained that in cases of significant financial instability, fiscal policy can play a crucial role in supporting central banks and financial supervisors through tools such as direct lending, guarantees, and equity injections.
“Targeted tax incentives can stimulate private investment and productivity through research and development. Strengthening spending efficiency—especially in health, education, and infrastructure investment—can raise an economy’s production capacity.
“Timely and orderly debt restructuring alongside fiscal adjustments is essential for countries facing debt distress. Recent initiatives by the international community have streamlined sovereign debt restructuring and reduced timelines,” the IMF stated.
