The International Monetary Fund (IMF) has raised concerns over the escalating Illicit Financial Flows (IFFs) from Nigeria, warning that they are worsening the country’s revenue challenges. The IMF emphasized that tracing and curbing these flows is critical for fiscal sustainability and long-term economic growth.
Global Focus on Illicit Financial Flows
Speaking at the 2025 IMF and World Bank Annual Meetings in Washington, D.C., IMF Managing Director Kristalina Georgieva highlighted the growing threat posed by IFFs, which include stolen public funds, proceeds from criminal activities, and untraceable digital transactions.
“We believe that for countries like Nigeria, the IMF’s renewed focus on tracing illicit financial flows can provide a blueprint for plugging fiscal leakages that have long undermined revenue generation and sustainable growth,” Georgieva said.
She noted that these flows erode governance systems, drain public resources, and weaken development efforts, particularly in developing economies. The digital economy, including cryptocurrencies, has added new complexities, allowing some illicit activities to evade oversight.
“Criminal activities can now be funded without being traced. This is a serious problem, and we must address it decisively,” she added.
IMF’s Strategy to Combat Illicit Flows
The IMF has strengthened its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)framework following a 2023 review. Georgieva explained that tracking illicit financial flows is now an integral part of the IMF’s Article IV consultations, which assess the economic health of member countries.
For nations seeking IMF support, program designs will now include measures specifically targeting illicit flows, especially where the problem is systemic. The Fund is also providing technical assistance and training to help authorities detect, trace, and respond to suspicious financial activities.
“Training local authorities to trace illicit financial flows and act quickly is crucial. Digital tools help monitor money, but they also create new avenues for evading oversight,” Georgieva said.
Governance and Collaboration
The IMF stressed that tackling illicit financial flows requires strong governance and institutional integrity. Through its Governance Diagnostics initiative, the Fund helps countries identify vulnerabilities that enable corruption and financial crime. Georgieva encouraged collaboration between governments, civil society, and international partners to strengthen financial oversight and institutional transparency.
Countries such as Sri Lanka and Kenya were cited as examples of successful partnerships that have improved governance and combated financial crimes.
Nigeria’s Economic Outlook
Despite concerns over illicit flows, the IMF revised Nigeria’s 2025 economic growth forecast upward to 3.9%, citing stronger domestic fundamentals, improving investor confidence, and moderated impact from global tariff tensions. This represents a 0.5 percentage point increase from the IMF’s July 2025 projection and nearly a full percentage point higher than the April forecast.
The Fund projects growth to accelerate to 4.2% in 2026, while 2024 GDP was revised upward to 4.1% due to national account rebasing, which captured previously underreported sectors like the digital economy, informal agriculture, and modular refining activities.
The IMF highlighted that reforms in the energy and financial sectors, exchange rate adjustments, and higher oil production are contributing to the positive outlook. At the same time, inflation remains elevated, with consumer prices forecast to drop from 31.4% in 2024 to 23.0% in 2025, and further to 22.0% in 2026. End-of-period inflation is projected at 21% in 2025 and 18% in 2026.
Nigeria’s current account surplus is expected to narrow from 6.8% of GDP in 2024 to 5.7% in 2025, and further to 3.6% in 2026, as higher imports offset gains from oil exports.
Sub-Saharan Africa Outlook
For Sub-Saharan Africa, the IMF upgraded growth projections to 4.1% in 2025 and 4.4% in 2026, citing macroeconomic stabilization and ongoing reforms in key economies such as Nigeria and Ethiopia.
However, the Fund warned that resource-dependent and conflict-affected countries remain vulnerable, with low-income nations facing widening per capita income gaps compared to advanced economies. Strengthening institutions, mobilizing domestic revenue, improving debt management, and pursuing broader structural reforms were highlighted as critical for unlocking the region’s economic potential.
