The International Monetary Fund (IMF) has advised the Federal Government to revise the proposed ₦54.99 trillion 2025 budget, citing lower-than-expected global oil prices. This recommendation is contained in the IMF’s Article IV Consultation Report on Nigeria, released in Washington, D.C., on Tuesday.
According to the IMF, while Nigeria’s economy is projected to grow by 3.4% in 2025—thanks to increased oil production and easing inflation—there is a need to “recalibrate the 2025 budget to lower oil prices” to reflect current realities in the international market.
Commendations
The report applauded the Central Bank of Nigeria (CBN) for its exchange rate liberalisation policy and other reforms, which have helped boost capital inflows. It also noted that the CBN’s “tight monetary policy stance” remains appropriate and should continue until inflation is fully under control.
Acknowledging ongoing efforts to recapitalize the banking sector, the IMF stated: “Growth has been steady but too low in per-capita terms, and inflation remains high. Gains have yet to benefit all Nigerians. Food insecurity and poverty have risen. Half-way through its term, the government is now focused on raising growth, while adapting to the spillovers from the changing global environment. Agriculture remained subdued, owing to security challenges and sliding productivity.”
On GDP, the Fund said: “Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 3½ percent, supported by domestic reform gains.”
On Foreign Exchange
The IMF also highlighted improvements in the foreign exchange market, noting: “Reforms to the FX market and foreign exchange interventions have brought stability to the naira. Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the rebased CPI index released by the Nigerian Bureau of Statistics.”
However, the report flagged several risks, warning that “downside risks have increased with heightened global uncertainty. A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures. A deterioration of security could impact growth and food insecurity.”
The IMF Executive Board, while aligning with the Staff Report, noted that the benefits of recent economic reforms were yet to reach most Nigerians. It stressed the need for “agile policy-making” to maintain macroeconomic stability, drive inclusive growth, and reduce poverty.
The Board also commended the CBN, stating: “Directors agreed that the Central Bank of Nigeria is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched. They welcomed the discontinuation of deficit monetization and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting.”
To improve Nigeria’s growth prospects, the IMF emphasized the need to address insecurity, reduce bureaucratic bottlenecks, boost agricultural productivity, close infrastructure gaps—especially in power supply—and increase investment in health and education. It also urged policies that would build resilience to climate-related shocks.
Reactions
Reacting to the report, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, stated that the government is taking a proactive stance to manage the identified risks.
In a statement signed by the Director of Information and Public Relations, Mr. Mohammed Manga, the Minister assured that the 2025 Budget is being implemented with a strong focus on protecting reform gains and maintaining economic stability.
He added: “The government continues to monitor developments in the international oil market and global trade environment and is taking responsive measures to mitigate potential risks while maintaining momentum toward inclusive growth.”
