By Muhammad Mamman
The International Monetary Fund (IMF) has raised concern over the growing scale of illicit financial flows (IFFs) from Nigeria, warning that the trend is worsening the country’s already fragile revenue position.
IMF Managing Director, Kristalina Georgieva, issued the warning at the 2025 Annual Meetings of the IMF and World Bank in Washington D.C., stressing that the Fund would intensify efforts to trace and curb illicit outflows undermining fiscal stability.
“For countries like Nigeria, the IMF’s renewed focus on tracing illicit financial flows could provide a blueprint for plugging fiscal leakages that have long undermined revenue generation and sustainable growth,” Georgieva stated.
She described IFFs—ranging from stolen public funds and proceeds of crime to untraceable digital transactions—as a major threat to economic stability and governance in developing countries. According to her, the rapid rise of cryptocurrencies and other digital assets has further complicated global anti-money laundering efforts.
“You may have money plainly stolen from taxpayers or channelled into criminal activities that harm citizens. Now, with digital currencies, criminal transactions can occur anonymously, making tracing extremely difficult. This is a serious problem, and we must treat it as such,” she said.
IMF’s Anti-Corruption Strategy
The IMF, she revealed, has strengthened its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework following a comprehensive review in 2023.
“Following the money” is now an integral part of the IMF’s annual Article IV consultations—an economic assessment of member states—ensuring that every country’s exposure to illicit flows and financial integrity risks is routinely evaluated.
Furthermore, IMF-supported programmes for countries seeking financial assistance will now include specific anti-IFF measures, particularly where the issue is systemic. The Fund is also expanding technical assistance and training to help national authorities detect and respond to suspicious financial transactions more effectively.
“We need to train local authorities to trace illicit flows quickly and use digital tools responsibly. Technology helps track money but also creates new loopholes for evasion,” Georgieva explained.
Strengthening Governance
The IMF boss emphasised that tackling illicit financial flows is ultimately a governance challenge that requires transparency, institutional reform, and cross-sector collaboration.
Through its Governance Diagnostics Initiative, the IMF is helping countries identify weaknesses in public institutions that enable corruption and financial crimes to thrive.
“The governance diagnostic is not an audit. It identifies vulnerabilities in institutions—breeding grounds for corruption—and recommends reforms,” Georgieva noted, urging collaboration between governments, civil society, and international partners.
Nigeria’s Growth Outlook
In a related development, the IMF revised Nigeria’s economic growth forecast upward to 3.9 per cent for 2025, up by 0.5 percentage point from July’s projection, citing stronger oil output, improved investor confidence, and fiscal policy support. Growth is expected to rise further to 4.2 per cent in 2026.
Sub-Saharan Africa’s growth forecast was also upgraded to 4.1 per cent in 2025 and 4.2 per cent in 2026, driven by reforms in economies such as Nigeria and Ethiopia.
However, the IMF warned that inflation remains high and fiscal discipline must be sustained. It urged Nigeria to strengthen institutions, improve transparency, and deepen structural reforms to maintain macroeconomic stability and inclusive growth.
“Nigeria’s resilience is commendable, but sustained progress depends on credible reforms, efficient revenue mobilisation, and transparent governance,” Georgieva concluded.
