IMF Warns Illicit Financial Flows Are Deepening Nigeria’s Revenue Crisis
The International Monetary Fund (IMF) has sounded the alarm over the ongoing outflow of illicit financial flows (IFFs) from Nigeria, warning that these unlawful capital movements are exacerbating the country’s revenue shortfall.
At the IMF, World Bank 2025 Annual Meetings in Washington, IMF Managing Director Kristalina Georgieva singled out IFFs, which include misappropriated public funds, proceeds from criminal activity, and opaque digital transactions, as a serious drag on Nigeria’s finances and development.
She said that these flows erode public resources, weaken institutional integrity, and hinder efforts at sustainable growth.
Georgieva pledged that the IMF will intensify its efforts to trace these hidden funds and help countries, including Nigeria, plug “fiscal leakages” that sap revenue generation.
She emphasized that following the money has become a component of the IMF’s core country assessments (Article IV consultations), to evaluate each nation’s exposure to illicit flows and financial integrity risks.
Additionally, Georgieva affirmed that the IMF is deploying technical assistance and training to help national authorities better detect, trace, and respond to suspicious financial activity, particularly in the digital and cryptocurrency spheres, which she noted offer increased anonymity to illicit actors.
She also underscored that confronting illicit financial flows must go hand in hand with strengthening institutions and governance systems. Through its Governance Diagnostics initiative, the Fund seeks to identify vulnerabilities in institutional arrangements that allow corruption and illicit financial behavior to flourish.
In parallel, the IMF has upgraded Nigeria’s 2025 GDP growth projection to 3.9 percent, citing improved domestic fundamentals, a favorable fiscal stance, and stronger investor confidence.
This is a 0.5 percentage point increase from earlier forecasts.
However, the Fund cautioned that inflation remains elevated and that implementing credible fiscal and monetary policies remains essential if growth is to be sustainable.