By Abiola Olawale
The International Monetary Fund (IMF) has issued a stark warning to Nigeria, calling for an urgent revision of its 2025 national budget to avert a deepening financial crisis.
The IMF’s latest Article IV Consultation Report highlighted the risks posed by falling oil prices, lower production levels, and challenges in executing capital expenditure, which could push Nigeria’s fiscal deficit to 4.7% of GDP in 2025, up from 4.1% in 2024.
The New Diplomat reports that the ₦54.99 trillion 2025 budget benchmarked crude oil price at $75 per barrel.
However, the IMF has raised an alarm that the current market realities, where Brent and West Texas Intermediate futures hovered around $68.68 and $67.04, respectively, could hamper Nigeria’s budgetary finance.
The IMF emphasized that without recalibrating the budget to reflect these lower oil prices, Nigeria risks widening its fiscal deficit, increasing debt burdens, and exerting further pressure on the naira’s exchange rate.
The report reads in part: “Ensuring that the fuel subsidy savings accrue to the government would yield the proposed neutral stance—the full-year savings are estimated at two per cent of GDP. If the savings are not realised starting H2-2025 and given that tax policy reforms under consideration are not expected to deliver significant revenue gains in 2025, adjustment would have to come from the expenditure side (0.6 per cent of GDP), with staff recommending to prioritise adjustments to recurrent spending to protect growth-enhancing investments.
“Absent policy actions, the fiscal deficit in 2025 would exceed budget expectations.”
Despite the IMF’s concerns, Nigerian authorities have expressed their commitment to recalibrating the 2025 budget and implementing the necessary adjustments to address the country’s fiscal challenges.
This was disclosed in a statement issued by the Director of Information and Public Relations, Mohammed Manga.
According to the statement, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, expressed gratitude for the IMF’s recognition of Nigeria’s ongoing reform efforts, particularly highlighting the progress made in improving the country’s fiscal and external positions.
Responding to the IMF’s warning about risks arising from global economic uncertainties, including oil price fluctuations and market volatility, Edun reiterated the government’s determination to ensure stability.
The statement reads in part: “In response to the downside risks highlighted in the IMF’s report—particularly uncertainties in the global economy—the Minister reaffirmed the government’s proactive stance.
“He emphasised that the implementation of the 2025 Budget is being carried out with a focus on safeguarding reform gains and ensuring economic stability. 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.
“The Federal Government remains fully committed to sound economic management that promotes macroeconomic stability, broad-based growth, and improved living standards for all Nigerians.”
