IMF to Nigeria: Broaden Tax Base, Boost Regional Trade, and Build Economic Resilience

Amid growing fiscal pressures and shifting global economic trends, the International Monetary Fund (IMF) has issued a strong call for Nigeria to expand its domestic tax base, enhance revenue mobilization through technology, and deepen intra-African trade to safeguard its long-term economic future.

At a press briefing during the 2025 IMF Spring Meetings in Washington, D.C., IMF Managing Director Kristalina Georgieva underscored the urgency for Nigeria—and other African economies—to move beyond dependency on volatile oil revenues and to embrace strategic reforms that position them for sustainable growth.

“Countries like Nigeria must broaden their tax revenue base—not just for short-term stability, but to build long-term resilience,” Georgieva stated.

Technology and Domestic Reform at the Heart of Recovery

Georgieva emphasized that digital innovation is no longer optional but essential for modernizing tax systems, curbing evasion, and optimizing public finance management.

“Technology provides transformative opportunities. When properly deployed, it can seal financial leakages, improve efficiency, and promote fairness across the revenue ecosystem,” she explained.

Nigeria’s heavy reliance on crude oil exports continues to leave its economy exposed to external shocks. As global oil prices waver, the need for a diversified revenue strategy has never been more critical, Georgieva warned.

A Shift Towards Tailored Monetary Policy

The IMF chief also advised African central banks to pursue monetary policies that reflect domestic economic conditions rather than mimic strategies used in different regions.

“It’s no longer sufficient to replicate policies from neighboring economies. Policymakers must base decisions on their own inflation dynamics, fiscal structures, and growth trajectories,” she cautioned.

This guidance highlights a broader shift in IMF messaging: encouraging African nations to chart independent paths based on localized realities rather than one-size-fits-all economic models.

Transparency, Good Governance, and Regional Integration

In addition to fiscal and monetary reforms, Georgieva called for renewed commitments to transparency, anti-corruption, and institutional integrity—cornerstones she described as critical to unlocking Africa’s growth potential.

Trade integration was another focal point. Georgieva urged African countries to dismantle internal trade barriers and prioritize regional collaboration, drawing lessons from the success of ASEAN economies.

“Reducing infrastructure bottlenecks can unleash enormous economic potential across Africa,” she said, noting the World Bank’s initiatives to support infrastructure expansion on the continent.

With Africa’s young population and abundant natural resources, Georgieva asserted that the continent could emerge as a dynamic economic powerhouse if leaders seize the opportunity for reform and innovation.

Building Buffers Against Global Volatility

Georgieva specifically pointed to Nigeria, Egypt, Ghana, and Côte d’Ivoire as economies that must urgently build stronger fiscal buffers to withstand external shocks, such as commodity price fluctuations or global financial downturns.

“A more unified and collaborative Africa has the potential to transform itself into a major global economic force,” she concluded.

Domestic Policy Shifts: Tax Reform on the Horizon

In a related development, Nigeria’s Federal Government has announced that the forthcoming Tax Reform Bill will exempt real estate transactions from Value Added Tax (VAT). The move is designed to reduce the cost of building materials, lower the financial barriers to homeownership, and stimulate activity in the construction and real estate sectors—providing relief particularly to low- and middle-income Nigerians.

This domestic shift aligns with the IMF’s broader recommendation: that fiscal policies must be inclusive, growth-supportive, and adapted to national priorities.