The International Monetary Fund has advised Nigeria to cut its proposed ₦54.99 trillion 2025 budget to reflect weaker global oil prices, NaijNaira can report.
In its latest Article IV Consultation, released via Leadership Newspaper, the IMF acknowledged recent reforms—including fuel subsidy removal, halting central bank deficit financing, and FX market liberalisation—as steps that stabilised the naira and brought inflation under control.
“The 2025 budget needs to be recalibrated to lower oil prices,” IMF directors stated, urging a neutral fiscal policy focused on productive investments.
They warned that global oil price drops or rising external debt costs could hurt Nigeria’s fragile recovery, pressure the naira, and widen the fiscal deficit.
Without adjusting the budget to reflect current realities, the fiscal deficit could increase from 4.1% to 4.7%, deepening debt concerns.
Oil remains Nigeria’s primary revenue source. While better oil output lifted GDP growth to 3.4% in 2024, the IMF said this growth “has been steady but too low in per-capita terms,” noting inflation remains high and poverty continues to rise.
Inflation dropped to 23.7% year-on-year in April 2025 from an annual average of 31% in 2024, thanks to FX reforms and food production improvements.
The IMF encouraged efforts to fix power shortages, boost agriculture, and address red tape to improve food security and reduce economic fragility.
It also backed financial inclusion, stronger bank supervision, capital market development, and structural reforms in lending and tax administration.
The Fund called for quick cash transfers to vulnerable Nigerians and urged sustained policies to maintain macroeconomic stability.
Article updated 3 weeks ago. Content is written and modified by multiple authors.
