*Warns against complacency could undermine hard-won macro gains
*Flags risks to economic consolidation
By Babajide Komolafe
The International Monetary Fund (IMF) yesterday called on the Federal Government and state governments to demonstrate the quality of public spending if macroeconomic stability is to translate into tangible improvements in household welfare.
Speaking at the Nigerian Economic Summit Group, NESG 2026 Macroeconomic Outlook presentation, in Lagos Nigeria’s IMF Country Representative, Dr. Christian Ebeke, warned that Nigeria’s recent exit from crisis mode should not be mistaken for a permanent recovery. He stressed that while the country has made significant progress over the past two years, complacency could quickly erode the gains achieved through fiscal and monetary reforms.
“Nigeria faces risks if policymakers at both federal and subnational levels assume the job is done. Stabilization is not the destination,” Ebeke said. “Policy perseverance is critical, especially as fiscal space remains limited, inflation is still high, and monetary tools are constrained. Poorly executed fiscal decisions could undermine the very progress the country has made.”
The IMF representative highlighted that the country’s macroeconomic gains remain fragile, noting that self-inflicted policy mistakes and procyclical fiscal behavior—particularly in an election year—could trigger renewed volatility. “Contingency planning and careful execution are vital. The quality of spending, not just the quantity, will determine whether households feel the benefits of stabilization,” he added.
The warning echoes concerns raised by other panelists, including the World Bank’s Senior Economist for Nigeria, Dr. Samar Mata, who emphasized that inflation remains a major impediment to household welfare. She noted that macroeconomic indicators have improved, but millions of Nigerians are yet to experience real improvements in living standards.
“Monetary policy is largely maxed out. Without targeted fiscal interventions, structural reforms, and social protection programs, stability alone will not reduce poverty,” Dr. Mata said.
The IMF’s caution comes amid discussions over Nigeria’s fiscal consolidation, rising external risks, and the need for stronger public finance management. Dr. Ebeke urged governments to prioritize spending in critical sectors such as primary health care, education, and social protection, while ensuring transparency and accountability.
“Governments must deliver visible results. Citizens need to see their taxes translating into functioning schools, healthcare facilities, and safe roads. That is how confidence and trust are built,” he said.
The NEST 2026 presentation also examined the roles of monetary policy, private sector investment, and structural reforms in sustaining growth. While acknowledging progress in stabilizing the naira, narrowing interest rate spreads, and improving reserves, panelists agreed that the benefits of stabilization would remain limited without deliberate efforts to improve public spending and household welfare.
Dr. Ebeke concluded that Nigeria possesses the tools to respond to external and domestic shocks, but implementation remains the key. “The focus now must be on the quality of execution. Otherwise, we risk reversing two years of hard-won progress,” he warned.
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