The International Monetary Fund (IMF) has expressed deep concern over the growing challenge of Illicit Financial Flows (IFFs) from Nigeria, warning that such activities are aggravating the nation’s persistent revenue shortfalls.
Speaking at the 2025 IMF–World Bank Annual Meetings in Washington, D.C., the Fund’s Managing Director, Ms. Kristalina Georgieva, emphasized that the IMF would intensify efforts to trace and curb illicit financial movements as part of a broader strategy to strengthen Nigeria’s fiscal stability.
> “For countries like Nigeria, the IMF’s renewed focus on tracing Illicit Financial Flows could serve as a blueprint for closing fiscal leakages that have long weakened revenue generation and sustainable growth,” Georgieva stated.
She cautioned that illicit financial flows — which include stolen public funds, proceeds from criminal enterprises, and untraceable digital transactions — continue to undermine governance, drain national resources, and stifle economic development, particularly in developing nations.
Digital Economy and the Rise of Untraceable Transactions
According to Georgieva, the digital economy has further complicated the problem, as cryptocurrencies such as Bitcoin now provide avenues for anonymous financial transactions.
> “You may have public money stolen from taxpayers or private funds redirected into criminal ventures that harm citizens’ welfare. With digital money, these activities can occur without traceability — a very serious challenge that demands urgent global attention,” she explained.
Recent IMF briefings revealed that illicit flows now take on “multiple dimensions,” including embezzlement, tax evasion, and illegal private investments, all of which threaten economic stability and social welfare.
Strengthened Anti-Money Laundering Framework
In response, the IMF announced that it has reinforced its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework following a comprehensive review in 2023.
Georgieva disclosed that tracking financial integrity risks is now a core component of the IMF’s annual Article IV consultations — the Fund’s standard economic assessment for member countries.
> “Following the money is now a mandatory part of our economic health checks. This ensures every country’s vulnerability to illicit flows is routinely examined,” she said.
She added that IMF-supported programs will now include specific anti-IFF measures, especially in countries where such risks are systemic. The Fund is also offering technical assistance and capacity-building support to help national authorities detect and address suspicious transactions more effectively.
> “We are training country authorities to trace illicit flows, act faster, and use digital tools more responsibly — even as these tools create new risks,” Georgieva added.
Governance and Institutional Reforms
Beyond financial tracking, Georgieva highlighted the need for stronger governance systems to combat corruption and financial crimes.
Through its Governance Diagnostics Initiative, the IMF is helping countries identify structural weaknesses that enable corruption and IFFs to persist.
> “This isn’t an audit,” she clarified. “It’s about uncovering institutional vulnerabilities — the breeding grounds for corruption — and recommending reforms to close those gaps.”
She also called for collaboration among governments, civil society, and international partners, stressing that transparency and cooperation are essential to restoring public trust.
> “Civil society groups often know where vulnerabilities lie. Working together, we can build stronger institutions and greater accountability,” she said.
Georgieva commended countries such as Sri Lanka and Kenya for adopting cooperative frameworks that tackle financial crimes while reinforcing governance structures.
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IMF Upgrades Nigeria’s 2025 Economic Growth Forecast
In a related development, the IMF upgraded Nigeria’s economic growth forecast for 2025 to 3.9%, citing stronger domestic fundamentals, improved investor confidence, and better fiscal management.
This projection marks a 0.5 percentage point increase from the Fund’s July 2025 forecast and nearly one point higher than earlier April estimates.
According to the IMF’s October 2025 World Economic Outlook (WEO) titled “Global Economy in Flux”, Nigeria’s real Gross Domestic Product (GDP) grew by 4.1% in 2024 and is expected to rise to 4.2% in 2026.
For Sub-Saharan Africa, growth is projected at 4.1% in 2025 and 4.2% in 2026, reflecting stronger regional reforms and improved macroeconomic management.
Globally, however, the IMF revised its growth forecast downward to 2.8%, citing the impacts of trade tensions and global tariff disputes.
Nigeria’s Economic Outlook: Key Drivers and Challenges
The IMF attributed Nigeria’s growth resilience to higher oil output, a supportive fiscal stance, and increasing investor optimism. It noted that recent energy and financial sector reforms have attracted new investments and improved transparency in the foreign exchange market.
Despite these gains, inflation remains a major concern. The IMF expects Nigeria’s average inflation rate to ease from 31.4% in 2024 to 23% in 2025, and further to 22% in 2026, reflecting gradual disinflation.
Nigeria’s current account surplus is projected to narrow from 6.8% of GDP in 2024 to 5.7% in 2025 and 3.6% in 2026, as rising imports balance out oil export gains.
The report also confirmed a major rebasing of Nigeria’s national accounts, adopting 2019 as the new base year, which expanded GDP coverage to include the digital economy, informal agriculture, and modular refining. This adjustment raised Nigeria’s nominal GDP by over 40%, offering a more accurate reflection of its economic activity.
The IMF urged Nigeria to sustain credible fiscal and monetary policies, strengthen institutions, and accelerate reforms to ensure macroeconomic stability and inclusive growth.
> “Nigeria’s outlook is now more positive, driven by reduced uncertainty, limited exposure to global tariff wars, and rising investor confidence,” said Denz Igan, Division Chief at the IMF’s Research Department.
He added that higher oil production, exchange rate appreciation, and better security in oil-producing regions are contributing to the country’s upward growth revision.
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Sub-Saharan Africa Outlook
For the Sub-Saharan region, Igan noted that the IMF had also raised growth expectations to 4.1% in 2025 and 4.4% in 2026, supported by stabilization measures and reform momentum in key economies such as Ethiopia and Nigeria.
However, he warned that resource-dependent and conflict-affected nations still face significant challenges, and the income gap with advanced economies continues to widen.
The IMF recommended that African countries focus on domestic revenue mobilization, effective tax reforms, debt transparency, and governance improvements to unlock the region’s full economic potential.
