IMF Urges Nigeria to Review 2025 Budget Amid Falling Oil Prices, Inflation Concerns
By DAYO ADESULU
The IMF urges Nigeria to review 2025 budget projections due to falling oil prices and global risks, despite economic growth forecast of 3.4% and inflation decline in early 2025.
📰 IMF Urges Nigeria to Review 2025 Budget Over Oil Price Volatility
The International Monetary Fund (IMF) has called on the Federal Government of Nigeria to recalibrate its N54.99 trillion 2025 budget, citing concerns over lower-than-expected oil prices and rising global uncertainty.
This recommendation is contained in the IMF’s Article IV Consultation Report released in Washington D.C. on June 27, 2025, which acknowledges Nigeria’s reform progress but flags significant downside risks that threaten fiscal stability.
“The 2025 budget needs to be recalibrated to lower oil prices,” the report stressed.
📊 Economic Outlook: Growth Projected at 3.4%, But Gains Uneven
The IMF projects that Nigeria’s GDP will grow by 3.4% in 2025, driven by:
- Increased oil production
- Improved FX stability
- The Dangote Refinery’s operations
- Recovery in services and manufacturing
However, the Fund warns that:
“Growth is steady but too low in per-capita terms. Food insecurity and poverty have risen.”
📈 Key Economic Indicators:
| Indicator | Value |
|---|---|
| Budget Size (2025) | ₦54.99 trillion |
| Projected GDP Growth (2025) | 3.4% |
| Inflation (April 2025, YoY) | 23.7% |
| Avg. Inflation (2024) | 31% |
| Exchange Rate (May 2025) | ₦1,580/$ (parallel market) |
💰 Budget Risks: Oil Dependence Under Pressure
The Fund notes that:
- Falling oil prices will shrink government revenues
- Increased financing costs could weaken external positions
- Security risks and climate events could undermine food production
“A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions,” the report warned.
🏛️ IMF Commends CBN for Reforms & Tight Monetary Policy
The IMF praised the Central Bank of Nigeria (CBN) for:
- Liberalising the exchange rate
- Halting deficit monetization
- Implementing tight monetary policy
The Fund called for the continuation of tight policy until “disinflation becomes entrenched”, and supported the recapitalisation of banks and improvements in CBN governance to pave the way for future inflation targeting.
🌾 Sectoral Challenges: Agriculture, Food Insecurity, Infrastructure
Despite macroeconomic gains, the IMF flagged persistent challenges:
- Agriculture remains subdued due to security and low productivity
- Poverty and food insecurity are on the rise
- Infrastructure gaps, especially in electricity, continue to hamper growth
The IMF emphasized that for inclusive growth, the government must:
- Improve health and education spending
- Address red tape and infrastructure deficits
- Boost agricultural productivity
📣 FG’s Response: We’re Monitoring and Adapting
Responding to the report, Minister of Finance Wale Edun said the government is actively managing the downside risks identified by the IMF.
“The government continues to monitor the international oil market and is taking responsive measures to mitigate potential risks,” Edun said.
According to a statement from the Ministry of Information and Public Relations, budget implementation is being done cautiously, with a focus on preserving reform gains and ensuring inclusive growth.
❓FAQs: IMF Urges Nigeria to Review 2025 Budget
1. Why is the IMF asking Nigeria to review the 2025 budget?
Because global oil prices have dropped below projections used in the ₦54.99 trillion budget.
2. What are the IMF’s key concerns?
Falling oil prices, inflation, security risks, high financing costs, and rising poverty levels.
3. What growth rate did the IMF project for Nigeria?
A GDP growth of 3.4% for 2025, supported by domestic reforms and higher oil production.
4. Did the IMF praise any of Nigeria’s reforms?
Yes, particularly the CBN’s FX liberalisation, tight monetary stance, and bank recapitalisation efforts.
5. What should Nigeria do now?
IMF recommends recalibrating the budget, ensuring agile policy-making, and increasing infrastructure and social spending.
6. Is the Federal Government taking action?
Yes. According to Finance Minister Wale Edun, the government is monitoring the oil market and adjusting budget strategies to protect economic stability.
#IMFReportNigeria, #Nigeria2025Budget, #OilPriceRisk, #WaleEdun, #CBNReforms, #NigerianEconomy, #InflationNigeria, #IMFConsultation, #NairaUpdate, #FoodInsecurityNG,
🔗 Related Resources
📘 IMF Article IV Consultation Reports
📘 Federal Ministry of Finance, Budget and National Planning
