IMF: Illicit Cash Leaks as Major Drag on Nigeria’s Revenues

Illicit financial flows (IFFs) are eroding Nigeria’s already-strained revenues, the International Monetary Fund warned at the 2025 Annual Meetings, pledging a renewed push to trace leakages and strengthen compliance.

The Fund also upgraded Nigeria’s 2025 growth outlook to 3.9%, citing improving domestic fundamentals but urging credible fiscal and monetary coordination.

The IMF’s stance adds urgency to long-standing reform priorities: closing customs loopholes, tightening AML/CFT enforcement, and digitalising tax administration to capture more of the informal economy. For households and businesses, reduced leakages could stabilise FX markets and expand fiscal space for power, health and transport investments.

Analysts say the message is clear: without plugging IFFs, gains from subsidy reforms and exchange-rate adjustments will underperform. Abuja’s next steps should include risk-based supervision, cross-border data sharing, and faster case resolution to deter offenders. If executed, the payoff could be meaningful higher non-oil revenue, narrower deficits, and better inflation control.