The International Monetary Fund (IMF) has called on Nigeria to revise its 2025 budget to reflect the decline in global oil prices and to increase direct cash transfers to protect vulnerable populations facing poverty and food insecurity.
In its latest Article IV Consultation Report — an annual review of Nigeria’s economic policies — the IMF noted that while Nigeria’s economy shows signs of stability, per capita growth remains weak, and inflation continues to rise.
Nigeria, Africa’s most populous country and a leading oil producer, approved a 2025 budget based on daily crude production of 2 million barrels at $75 per barrel. However, recent price trends undermine this projection. As of Wednesday, July 2, Brent crude fell to $68 per barrel, putting pressure on public finances and economic planning.
The head of the IMF mission to Nigeria warned that the global environment Nigeria operates in is “highly uncertain,” especially due to oil price volatility, which directly affects fiscal balances, inflation, and external reserves.
He emphasized that Nigerian policymakers must strengthen and preserve fiscal buffers, prepare for shocks, and seize economic opportunities to maintain recovery momentum and stimulate more inclusive growth. The IMF also reiterated the importance of boosting social spending, especially cash transfers, to shield the poorest households from the impact of rising living costs.
The Fund expects Nigeria’s GDP to grow by 3.4% in 2025, followed by 3.2% growth in 2026, citing improving economic conditions. However, it cautioned that this pace of growth is not enough to significantly reduce poverty or meet development goals, urging more decisive reforms in public finance, investment climate, and governance.
In an effort to diversify export markets and generate foreign exchange, Nigeria launched its first oil exports from the Dangote Refinery to Asian markets in June — a move that the IMF views as a positive step toward long-term energy sector reform.
Still, Nigeria remains vulnerable to global oil dynamics. While prices temporarily rose last month due to Middle East tensions, they have since declined again as OPEC+ — of which Nigeria is a member — shifted its strategy to regain market share instead of reducing output.
The IMF’s recommendations underscore the need for Nigeria to build a more resilient and diversified economy — one that is less dependent on volatile oil revenues and better equipped to respond to global uncertainties.
