IMF Urges Nigerian Government to Review 2025 Budget

The International Monetary Fund (IMF) has called on the Federal Government of Nigeria to revisit its proposed ₦54.99 trillion budget for 2025, warning that falling global oil prices may impact the country’s revenue expectations.

This recommendation was contained in the IMF’s Article IV Consultation Report on Nigeria, released yesterday from Washington, DC.

According to the report, Nigeria’s economy is projected to grow by 3.4 percent in 2025, driven by increased oil production and easing inflation. However, the IMF cautioned that the 2025 budget should be adjusted to reflect lower oil prices and current global realities.

The IMF also commended the Central Bank of Nigeria (CBN) for liberalising the foreign exchange market and other reforms that have boosted capital inflows. The Fund noted that the CBN’s tight monetary policy should continue until inflation is firmly under control.

On banking, the IMF acknowledged efforts to strengthen the sector, including the ongoing recapitalisation process.

Despite signs of economic growth, the report noted that gains have not been felt by many Nigerians, with high inflation, poverty, and food insecurity still prevalent. Agriculture remains sluggish, affected by security challenges and declining productivity.

The IMF expects real GDP to expand by 3.4 percent in 2025, supported by a new domestic refinery, higher oil production, and strong services. Medium-term growth is projected to stay around 3.5 percent, assuming domestic reforms continue.

Regarding foreign exchange, the IMF noted that reforms and interventions have helped stabilise the naira. Year-on-year inflation dropped to 23.7 percent in April 2025, down from an average of 31 percent in 2024.

However, the IMF warned of increased risks due to global uncertainty. A further drop in oil prices or rising financing costs could negatively affect growth and stability, while security problems could make food insecurity worse.

The IMF’s Executive Board agreed that the benefits of recent reforms have not yet been felt by all Nigerians and stressed the need for flexible policies to maintain macroeconomic stability, support growth, and reduce poverty.

Board members also praised the CBN for maintaining strict monetary policy, ending deficit financing by the central bank, and working to improve central bank governance.

To strengthen Nigeria’s economic outlook, the IMF highlighted the need to tackle security issues, boost agricultural productivity, close infrastructure gaps, especially in electricity, improve healthcare and education, and make the economy more resilient to climate change.

Responding to the report, Nigeria’s Minister of Finance, Wale Edun, said the government would remain proactive against potential risks identified by the IMF.

He emphasised that the 2025 budget is being implemented with a focus on economic stability and reform gains, and that authorities are closely monitoring the oil market and global trade to adjust policies as needed.