Nigeria’s government must exercise greater fiscal discipline and prioritise spending to navigate economic headwinds, the International Monetary Fund has advised. The call comes amid concerns over rising public debt and questions surrounding the efficiency of government expenditure.
At the 2025 IMF/World Bank Spring Meetings in Washington, D.C., Davide Furceri, Division Chief in the IMF’s Fiscal Affairs Department, acknowledged Nigeria’s recent economic reforms, including the removal of fuel subsidies and cessation of central bank financing for fiscal deficits. However, he emphasised the need for continued fiscal prudence.
“Spending must be done wisely, which means stronger prioritisation and greater efficiency in resource allocation,” Furceri stated. He highlighted the importance of directing funds towards social protection and infrastructure development to foster sustainable growth.
The IMF’s April 2025 Fiscal Monitor report projects a decline in Nigeria’s debt-to-GDP ratio to 45.4% by 2030, down from 52.9% in the previous year. Despite this optimistic outlook, the report underscores the necessity for Nigeria to strengthen its fiscal institutions and implement medium-term frameworks to ensure economic stability.
Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, echoed these sentiments, stressing that fiscal policy should serve as an anchor for confidence and stability. He urged Nigerian policymakers to build financial buffers to withstand economic shocks and to integrate fiscal policy within broader economic strategies.
The IMF’s recommendations come amid scrutiny of Nigeria’s budget allocations. Reports indicate that President Bola Tinubu’s administration has earmarked significant funds for international travel in the 2025 budget, raising questions about spending priorities. Critics argue that such expenditures may not align with the country’s pressing economic needs.
In response to these concerns, the IMF has advised Nigeria to focus on revenue mobilisation efforts and to ensure that any new spending is offset by cuts elsewhere or by generating additional revenue. This approach aims to maintain fiscal balance while addressing the country’s development goals.
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