Mr Jason Wu, Assistant Director for Global Markets, International Monetary Fund (IMF), said that the recent government reforms had improved Nigeria’s macroeconomic outlook.
Wu said this at the ongoing IMF/World Bank 2025 Spring Meetings in Washington, D.C. on Tuesday, during the release of the agency’s Global Financial Stability report for April 2205.
He said that the reforms had simultaneously lowered Nigeria sovereign credit profile, while adding that the country remained exposed to financial volatility and weakening global risk appetite.
“Nigeria’s sovereign spread has widened in recent weeks as global stock markets decline.
“For major commodity exporters like Nigeria, if trade tensions continue to dampen global demand, revenue shortfalls are likely.
“Authorities must stay vigilant and adopt the right policies to respond,” Wu said.
The IMF’s Global Financial Stability Report (GFSR) highlighted Nigeria’s return to the international debt market in late 2024 with its first Eurobond issuance since 2022.
This marked a positive shift in investor sentiment toward frontier markets, buoyed by macroeconomic reforms and improved credit ratings.
He quoted the report, saying “Sovereign eurobond spreads for frontier economies narrowed in 2024 and early 2025, helped by fiscal reforms, progress in debt restructuring, and foreign exchange policy adjustments.”
Examples cited include debt restructuring in Ethiopia and Ghana, and Nigeria’s forex market reforms.
“Frontier economies were able to issue foreign currency debt at relatively modest yields,” the report noted.
It added that the total issuance in first quarter of 2025 was roughly half of the total for 2024.
The report said, “Nigeria returned to the eurobond market in late 2024 for the first time since 2022, while Egypt re-entered in January 2025.”
It also revealed that Angola secured foreign currency financing through a total return swap with an international bank, while Côte d’Ivoire accounted for the largest eurobond issuance in Africa during first quarter.
Regionally, economic growth in Sub-Saharan Africa is also projected to ease slightly to 3.8 per cent in 2025, before rebounding to 4.2 per cent in 2026.
The nation’s growth, however, is expected to remain below the regional average.
“For Sub-Saharan Africa, growth is projected to decline from 4.0 per cent in 2024 to 3.8 per cent in 2025, before modestly recovering to 4.2 per cent in 2026.
“Among major economies, Nigeria’s forecast was downgraded by 0.2 percentage points for 2025 and 0.3 for 2026, due to falling oil prices.
“South Africa saw a 0.5-point downgrade for 2025 and 0.3 for 2026, citing weak 2024 performance and deteriorating sentiment,” the report said.
Also, South Sudan recorded the sharpest downgrade, with its 2025 forecast slashed by 31.5 percentage points due to delays in restarting oil production through a damaged pipeline.
On a positive note, Nigeria’s current account balance is expected to remain in surplus, however, declinin from 9.1 per cent of GDP in 2024 to 6.9 per cent in 2025, and 5.2 per cent in 2026.
This surplus could offer a degree of protection against external economic shocks.
I