&Forecasts 3.4% economic growth for Nigeria in 2025&Calls for sustained tight monetary policy, robust FX reform
&$17.4trn upstream investment required to avoid global market deficit OPEC
By Seun Ibiyemi
The International Monetary Fund (IMF) has cautioned that Nigeria remains vulnerable to external economic shocks despite notable macroeconomic reforms, calling on the Federal Government to revise its proposed �54.99 trillion 2025 budget using a more cautious oil price benchmark.
In its latest Article IV Consultation report, the IMF acknowledged Nigerias progress through bold reforms, including the removal of fuel subsidies, cessation of Central Bank deficit financing, and the liberalisation of the foreign exchange market. These measures, it noted, have supported a fragile economic recovery and bolstered investor sentiment.
However, the Fund stressed that these gains are still fragile, pointing to Nigerias continued dependence on oil revenues as a major risk. It warned that any downturn in global oil prices or rising borrowing costs could severely undermine fiscal stability.
The 2025 budget must be adjusted to reflect more conservative oil price assumptions, IMF directors advised, noting that if left unchanged, the fiscal deficit could widen from a projected 4.1% to around 4.7%, aggravating the countrys debt burden.
While projecting a GDP growth rate of 3.4% for 2025, driven by increased oil output, a new domestic refinery, and a strong services sector, the IMF noted that per capita growth remains insufficient and has yet to alleviate widespread poverty and food insecurity.
The Fund also flagged inflation as a major concern. Although the rate fell from an average of 31% in 2024 to 22.97% in May 2025, Nigeria still records one of the highest inflation rates globally. The IMF recommended that the Central Bank of Nigeria (CBN) maintain a tight monetary policy until a sustained decline in inflation is achieved.
It further pointed to ongoing fragilities in the foreign exchange market. While recent reforms have improved liquidity and transparency, the IMF said a clear intervention strategy is still required. It noted that the naira should continue to act as a shock absorber, especially given the shallow depth of the FX market and increased short-term capital flow risks.
The report acknowledged improvements in Nigerias external reserves and renewed access to global capital markets but warned that external financing needs remain substantial. The IMF urged transparent exchange rate management and prudent fiscal oversight.
On the fiscal front, the IMF commended gains in revenue generation and savings from fuel subsidy removal. However, it urged the government to strengthen budget implementation, improve spending efficiency, and channel resources toward development and social protection.
To protect vulnerable populations, the IMF recommended expediting targeted cash transfer schemes, particularly as food insecurity worsens.
In the financial sector, the Fund backed the CBNs recapitalisation initiative and its alignment with international regulatory standards but called for stronger risk-based supervision amid rapid growth in fintech and crypto activities.
It also called for completion of reforms required to remove Nigeria from the Financial Action Task Force (FATF) grey list, citing progress in anti-money laundering and counter-terrorism financing measures.
&Forecasts 3.4% economic growth for Nigeria in 2025
The IMF also projected a 3.4% expansion in Nigerias real GDP for 2025, marking a positive outlook for the countrys economic growth.
According to the IMF, Nigerias economic growth is expected to be driven by increased hydrocarbon output, the start-up of a new domestic refinery, and a robust services sector.
Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services, the IMF stated.
Concluding its review, the IMF welcomed Nigerias macroeconomic stabilisation efforts but warned of underlying structural weaknesses. It called for increased investment in infrastructure, education, health, and agriculture, alongside reforms to boost agricultural productivity and address insecurity.
&FG welcomes IMF endorsement of economic reforms
In response, the Federal Government welcomed the IMFs assessment, with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, expressing satisfaction with the Funds endorsement of Nigerias economic trajectory.
Speaking after the reports release, Edun said the reforms enacted over the past two years have led to improved fiscal and external balances, renewed investor confidence, and greater economic resilience.
He pointed to inflation data as a sign of progress, noting that headline inflation fell to 22.9% in May 2025, with food inflation dropping to 21.4%. He attributed this improvement to increased agricultural output and productivity.
The IMFs recognition of our economic progress validates our reform agenda, Edun stated. We are encouraged by the results and remain committed to pursuing stability and inclusive growth.
He acknowledged the risks identified in the IMFs report and assured that the 2025 Budget is being implemented with strategic safeguards to preserve reform gains. He reaffirmed governments readiness to respond to oil price volatility and other external pressures with prudent, flexible policies.
&OPEC forecasts $17.4trn trillion investment need to avoid global oil shortfall
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) has warned that without significant investment, the world could face a shortfall of 23 million barrels per day in oil supply by 2030.
Speaking at the 24th Nigeria Oil and Gas (NOG) Energy Week in Abuja, OPEC Secretary-General Haitham Al Ghais said that cumulative oil-related investments of $17.4 trillion will be needed by 2050 to meet rising energy demands.
He explained that global primary energy demand is expected to increase by 23% between now and 2050, driven by population growth, urbanisation, and economic expansion, particularly in non-OECD countries.
With nearly 1.9 billion people projected to move to urban areas by 2050, there will be immense pressure on energy infrastructure, Al Ghais said. Yet this also offers a chance to lift millions out of energy poverty.
He noted that hydrocarbons will continue to play a crucial role in the global energy mix, with oil retaining a near-30% share by 2050, and oil and gas together exceeding 50%.
Al Ghais stressed that developing nations must be allowed to utilise their natural resources to boost domestic economies and reduce energy poverty.
He added that OPEC remains committed to securing market stability through cooperation, innovation, and investment in cleaner and more efficient technologies.
