The International Monetary Fund (IMF) has called on the Federal Government to revise the 2025 budget to reflect lower oil prices and increase cash transfers to protect vulnerable Nigerians.
This recommendation was part of the IMF’s newly released ‘Article IV’ consultation on Nigeria, which noted that while the country’s economy is growing, the rate remains too low in per capita terms, with inflation still high. The IMF projected a GDP growth of 3.4% for 2025 and 3.2% in 2026.
According to the report, ensuring that fuel subsidy savings reach government coffers could maintain a neutral fiscal stance, with full-year savings estimated at 2% of GDP. However, if these savings are not realised by the second half of 2025, and with expected tax reforms unlikely to yield substantial revenue gains, spending cuts—amounting to 0.6% of GDP—would be necessary. The IMF advised prioritising reductions in recurrent expenditure to preserve capital investments that support economic growth.
It warned that without appropriate policy adjustments, the 2025 fiscal deficit could surpass projections.
IMF Mission Chief for Nigeria, Axel Schimmelpfennig, emphasised the impact of global uncertainties—especially oil price volatility—on Nigeria’s fiscal and external balances, as well as inflation. He said the current environment made it crucial for Nigeria to build fiscal buffers and remain responsive to both risks and opportunities.
He added, “The key challenge now is to tackle high poverty and food insecurity.”
The IMF’s call comes after President Bola Tinubu directed oil and gas firms to revive dormant oil fields to boost production and raise government revenue. The directive was relayed by Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, during the 2025 Nigeria Oil and Gas Energy Week in Abuja.