The International Monetary Fund demands Nigeria to modify its 2025 budget because of declining oil prices and to enhance social protection programs for vulnerable populations according to its Article IV review from Wednesday.
The Nigerian economy will expand at 3.4% this year but faces persistent high inflation rates while per capita growth shows minimal improvement. The IMF identifies global oil market volatility as a direct threat to Nigeria’s fiscal stability and external accounts and price stability.
The government of Nigeria established its 2025 budget based on a $75 per barrel oil price but Brent crude currently sells for less than $68. The Fund recommended that authorities should maintain flexible policies while creating financial reserves because of ongoing worldwide uncertainty.
The main priority at present is to address both high poverty levels and food insecurity according to Axel Schimmelpfennig who leads the IMF mission for Nigeria. The government needs to maintain rapid response capabilities to shocks while developing safety net programs.
Nigeria stands as Africa’s leading oil exporter so its budget heavily relies on energy revenue streams. The IMF’s recommendations will influence discussions about subsidy reforms and tax policy and fiscal strategy development as Nigeria works to protect stability and boost economic growth.
