Nigeria's Fiscal Risks Rise Ahead of 2027 Elections

Nigeria is at a critical fiscal juncture as it approaches the January 2027 general elections. The economy is projected to grow by 4.1% in 2026, but inflation is expected to peak above 33% by late 2024.

The Tinubu administration's reforms, including the unification of the foreign exchange window and the passage of four landmark tax reform bills, aim to address long-standing economic distortions. However, the removal of fuel subsidies has led to a 463% increase in petrol prices, exacerbating transport costs and food prices, which in turn diminishes purchasing power and increases poverty.

The International Monetary Fund estimates that poverty will reach 63% of Nigeria's population by 2025, with an additional two million Nigerians falling below the poverty line in 2026. Nigeria's total public debt is projected to rise to ₦159 trillion by December 2025, with a budget deficit of ₦23.85 trillion.

The IMF warns that spending pressures related to the elections could further widen the fiscal deficit, complicating the government's financial situation.