This represents a reduction of six percentage points in the nation's Gross Domestic Product (GDP) and would reduce its external current account balance as well as international reserves.

The Fund's report says Nigeria's outlook for growth is expected to moderate as the economy adjusts to permanently lower oil prices. According to the IMF, fiscal oil revenues are projected at 3.4 per cent of GDP, down from 5.8 per cent last year, limiting fiscal spending. It said aggregate demand shocks could lower growth by about 1.5 percentage point from last year to 4.3 per cent this year.

The IMF said the outlook is compromised by low fiscal and external buffers, which have reduced the capacity to absorb shocks relative to the experience of the 2008-09 financial crisis.