Economy
IMF to FG: Take strong action to address oil theft
International Monetary Fund IMF, Executive Board, has urged the Federal Government to take strong action to address oil theft and production losses. IMF also advised the government to strengthen Nigerian oil industry regulatory framework by passing a sound Petroleum Industry Bill with enhanced oversight and transparency provisions. It said that the framework for anti-money laundering and combating the financing of terrorism could support these efforts.
IMF in its review of the Nigerian economy in its article IV 2014 released weekend urged the government to also highlight the need for improving oil revenue management, by completing the transition from the Excess Crude Account to the Sovereign Wealth Fund. These measures, it said, should be supported by full implementation of the Treasury Single Account and the integrated information management systems. It said that maintaining fiscal discipline in the run up to the elections is also important.
The body also urged the Federal Government to rebuild fiscal buffer, reduce oil subsidy, curtail waivers, and boost non-oil revenue in order to ensure current progress in the country. IMF commenting on the Nigerian economy after consultation with the Nigerian authorities emphasized the need to rebuild fiscal buffers and to strengthen the framework further.
In the report, the IMF said: “Efforts should be geared towards boosting non-oil revenue by broadening the tax base, improving tax administration and curtailing exemptions, and further reducing oil subsidies.
“Directors underscored that adopting a rule-based reference oil price in fiscal projections and further strengthening public financial management should help the authorities achieve their consolidation objectives. Directors commended the authorities for lowering inflation and considered the current tight monetary policy stance to be appropriate, given the risks associated with potential capital flow reversals. To better manage liquidity, they generally encouraged more reliance on open market operations to guide short-term interest rates.
“With regard to exchange rate policy, directors noted that greater exchange rate flexibility could serve as an important buffer against external shocks. Directors noted that the financial system is well capitalised with low non-performing loans and recommended continued improvements in the supervisory framework, especially with regard to increased exposure from cross border financial activities. Directors encouraged the authorities to build on the progress made in strengthening prudential policies by further enhancing the framework for anti-money laundering and combating the financing of terrorism, and implementing the remaining Financial Sector Assessment Program (FSAP).
The report “welcomed the plan to wind down the operations of the Asset Management Corporation of Nigeria, AMCON. Directors emphasized that structural reforms remain critical to improve competitiveness and productivity, and reduce poverty and inequality. They encouraged the authorities to persevere with their Transformation Agenda with continued focus on education and health reforms, the improvement of power supply, and broadening agricultural production.
“Reform efforts should also aim at enhancing the business environment, improving productivity, boosting financial access to small and medium sized enterprises, and strengthening governance and institutional capacity. The upcoming release of re-based GDP data and further improvements in statistical data collection should strengthen the basis for policy and private sector decision-making in Nigeria.
According to the IMF, “Executive Directors welcomed Nigeria’s continued strong macroeconomic performance, underpinned particularly by sustained high growth in the non-oil sector. Inflation has continued to decline and the reserves position is adequate. While the economic outlook remains favourable, key risks include continued lower oil revenues from oil production losses and lower oil prices, the impact from the unwinding of unconventional monetary policy in advanced economies, and domestic political and security uncertainties.
“Directors underscored that steadfast implementation of prudent macroeconomic policies and reforms will be essential to address the risks and vulnerabilities, generate more inclusive and balanced growth, and reduce unemployment.
“Directors welcomed the authorities’ continued commitment to fiscal consolidation and noted the improvements made to the fiscal framework. However, to ensure macroeconomic stability, they emphasized the need to rebuild fiscal buffers and to strengthen the framework further.
“Directors commended the authorities for lowering inflation and considered the current tight monetary policy stance to be appropriate, given the risks associated with potential capital flow reversals. To better manage liquidity, they generally encouraged more reliance on open market operations to guide short-term interest rates. With regard to exchange rate policy, Directors noted that greater exchange rate flexibility could serve as an important buffer against external shocks. Directors noted that the financial system is well capitalized with low non-performing loans.
“They recommended continued improvements in the supervisory framework, especially with regard to increased exposure from cross border financial activities. Directors encouraged the authorities to build on the progress made in strengthening prudential policies, including further enhancing the framework for anti-money laundering and combating the financing of terrorism, and implementing the remaining Financial Sector Assessment Program (FSAP) recommendations.
“They welcomed the plan to wind down the operations of the Asset Management Corporation of Nigeria. Directors emphasized that structural reforms remain critical to improve competitiveness and productivity, and reduce poverty and inequality. They encouraged the authorities to persevere with their Transformation Agenda with continued focus on education and health reforms, the improvement of power supply, and broadening agricultural production. Reform efforts should also aim at enhancing the business environment, improving productivity, boosting financial access to small and medium sized enterprises, and strengthening governance and institutional capacity. The upcoming release of re-based GDP data and further improvements in statistical data collection should strengthen the basis for policy and private sector decision-making in Nigeria.”
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
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