The International Monetary Fund has called on governments to rebuild fiscal capacity and keep public debt under control as spending pressures rise.

In its 13-page World Economic Outlook update, published on Monday, the Fund urged countries to pursue medium-term fiscal consolidation while maintaining prudent debt management.

The report projected that Nigeria’s economy would expand by 4.4 per cent in 2026, up from 4.2 per cent in 2025, before slowing slightly to 4.1 per cent in 2027. This would place Africa’s largest economy above the projected global growth of 3.3 per cent and close to the Sub-Saharan average of 4.6 per cent.

The IMF stressed the importance of broadening revenue bases, rationalising expenditure, and improving efficiency, particularly by leveraging private investment.

“Efforts to replenish fiscal buffers should be anchored in realistic assumptions, including those regarding long-term spending pressures,” it said.

The Fund also advised that discretionary fiscal support should be carefully targeted. “Any discretionary fiscal interventions must be strictly targeted toward those firms and households most affected by adverse shocks and include explicit sunset provisions that make the actions temporary,” it added, cautioning that broad-based subsidies or industrial policy measures can be costly and disruptive if not carefully managed.

On monetary policy, the IMF said central banks should aim to maintain price stability while navigating shifts in the global economy. Policymakers in countries with inflation near target could consider gradual rate cuts, while those with high inflation should remain cautious.

“Central bank independence is paramount for macroeconomic stability and economic growth,” the report noted.

Structural reforms and investment in technology were also highlighted as key to medium-term growth. The IMF said reforms in labour markets, education, competition, and regulation, along with digital transformation and energy efficiency initiatives, could boost productivity and expand growth potential.

The IMF projected that Nigeria’s economy would grow by 4.4 per cent in 2026, up from 4.2 per cent in 2025, before easing slightly to 4.1 per cent in 2027. This pace would place Africa’s largest economy above the global average of 3.3 per cent and close to the Sub-Saharan Africa average of 4.6 per cent.

The Fund concluded that transparent trade policies, strong financial oversight, and clear economic frameworks are critical to reducing uncertainty, supporting investment, and ensuring sustainable growth.