Nigeria’s buffers have improved, but the IMF says a prolonged global shock could still widen sovereign spreads and prompt portfolio outflows.
The IMF’s alternative scenario, based on its April 2026 World Economic Outlook assumptions, combines tighter global financing and weaker appetite for risk with higher oil and gas prices and higher fertilizer and agricultural input prices. In that scenario, stronger hydrocarbon prices could lift export receipts, while a risk-off shift could raise Nigerian sovereign spreads. Outflows could center on nonresidents’ holdings of Central Bank of Nigeria (CBN) open market operations, with smaller withdrawals from government securities and equities. The report describes a possible shock, not withdrawals already underway.
If volatility rises, the CBN could permit some exchange-rate adjustment and use reserves to smooth excessive swings, the IMF said. The report points to the bank’s response to the 2025 “Liberation Day” shock as a precedent. IMF staff recommended monetary and fiscal adjustments while keeping the exchange rate flexible.
The IMF reported gross reserves of $46 billion in 2025, compared with $40 billion at the end of 2024. It cited $6 billion in net nonresident purchases of CBN open market operations and a $2.3 billion Eurobond issuance among the supports. The Fund estimated a 2025 current-account surplus of $14 billion, about 4.8% of GDP, based on provisional balance-of-payments data. It attributed the surplus mainly to increased oil and gas exports and lower fuel imports.
The Federal Reserve held its target range at 3.75% to 4.00% on Wednesday, Oct. 28. The European Central Bank kept its three key rates unchanged on Thursday, Oct. 29, at 2.50%, 2.65% and 2.90%, respectively. The ECB said financing conditions had tightened since its prior meeting; neither central bank identified a specific effect on Nigerian borrowers.
The scenario also carries costs: higher fuel, food and fertilizer prices could add to inflation and worsen poverty and food insecurity, the IMF said. For longer-term resilience, its staff called for better business conditions to attract foreign direct investment, deeper domestic capital markets and less reliance on short-term portfolio inflows and oil revenue.
