Economy
Nigeria’s Poverty Should Be Lower Given Growth, IMF Says
Nigeria’s poverty rate should be falling faster given its economic growth this decade, an official of the International Monetary Fund said. The share of citizens Nigerians who are considered poor fell to 62.6 percent in 2010 from 64.2 percent in 2004 according to figures published by the World Bank. The economy of Nigeria expanded an average 7.2 percent a year during the same period, according to IMF estimates.
“It’s a bit of a conundrum,” W. Scott Rogers, the senior resident representative of the IMF in Nigeria, said in an interview in Abuja. “Income per capita has gone up yet poverty isn’t improving and we’re having a difficult time understanding why that is or how that could be.” Economic growth has been largely driven by the non-oil industries, which expanded an average 8.5 percent a year from 2003 to 2011, the IMF said in a May 10 report, citing figures from National Bureau of Statistics. Oil accounts for about 15 percent of the country’s gross domestic product.
Agriculture accounted for 48.7 percent of the country’s non-oil economic output from 2001 to 2011 while wholesale and retail accounted for 21.4 percent, according to the IMF. Agriculture expanded an average 6.6 percent a year, while wholesale and retail trade grew 12.2 percent a year, according to the lender. “This is one thing we’ve learned over the last decade or two, that it’s not just the rate of growth in the aggregate that matters, it’s where it’s coming from and who’s enjoying it,” said Rogers. Still, “in Nigeria the growth is everywhere.” The re-basing of the country’s GDP to a more recent year will probably provide a more accurate picture of the composition of the economy and where growth is coming from and may help understand why poverty hasn’t reduced by a larger rate in the country, said Rogers. The IMF started providing technical assistance to the statistics office in September on the re-basing exercise, he said.
The West African country’s GDP is currently based on production and consumption patterns in 1990. The statistics bureau will decide before the end of the month whether to use 2010 or 2012 as the new base year, the head of the agency, Yemi Kale, said on May 9. The updated data, to be released next year, will probably boost the reported size of the Nigerian economy while decreasing the annual rate of growth, according to Kale. The IMF recommends that Nigeria should increase savings in its excess crude account, in which Nigeria saves revenue above a budgeted oil price, and the Sovereign Wealth Fund, to $20 billion, where the savings were in 2008, said Rogers. The ECA has savings of $7 billion, down from $9.2 billion in January, Finance Minister Ngozi Okonjo-Iweala said in a May 10 interview.
Annual negotiations between lawmakers and the government over what the benchmark price should be aren’t “meaningful” as long as funds that go into the account are spent, said Rogers. The oil price has rarely gone below the set price in the past seven years, and the country should have been accruing savings “the entire time,” he said. Lawmakers raised the benchmark oil price in this year’s budget to $79 a barrel from the $75 price proposed by the government. Okonjo-Iweala and central bank Governor Lamido Sanusi said the move would stoke inflation and proposed that the price should be determined in future by a technical committee instead of politicized negotiations.
“What’s important is that what’s saved is saved until the rule says when” it can be spent, said Rogers. One of the risks to the achievements of Nigeria’s fiscal and monetary management is if government spending rises again ahead of the 2015 elections, including that of the states’ budgets and the excess crude account, said Rogers. The central bank may have to raise rates from the current record high if this happens, he said. The Abuja-based regulator’s Monetary Policy Committee will hold its policy rate at 12 percent for a 10th consecutive meeting tomorrow, according to all 11 economists surveyed by Bloomberg News. “If fiscal policy starts to loosen as we go towards the elections, one of the jobs of central banks is to clean up the mess,” he said. “It doesn’t really have any other choice, and what does that do? It raises the cost of borrowing at a time of fiscal policy expansion. That’s just economics, that’s not Nigeria, but that’s the risk they’re facing now.”
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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