By Erewunmi Peace

The International Monetary Fund (IMF) has advised the Nigerian government to revise its 2025 national budget, citing declining global oil prices as a major threat to fiscal stability.

According to the IMF’s latest Article IV consultation report, Nigeria’s budget projection of $75 per barrel for crude oil may no longer be realistic, as oil prices have dipped to approximately $68 per barrel in recent weeks. The global financial body warns that this gap could significantly impact revenue expectations and widen the country’s fiscal deficit.

“With oil prices below budget assumptions, Nigeria needs to recalibrate its spending plans to maintain economic stability and avoid unnecessary borrowing,” the IMF noted.

The projected fiscal deficit is likely to increase from 4.1% to 4.7% of GDP if adjustments are not made. The IMF also emphasized the importance of reducing wasteful subsidies, improving public spending efficiency, and boosting non-oil revenue sources.

A Wake-Up Call for Policymakers

The IMF’s recommendation arrives at a time when Nigeria faces mounting economic challenges — from rising inflation and foreign exchange volatility to sluggish growth in key sectors.

Analysts suggest that the Federal Government may need to consider policy options such as:

Scaling back non-essential spending

Prioritizing capital projects with high economic returns

Expanding targeted social support programmes for vulnerable citizens

Looking Ahead

This latest call from the IMF echoes previous warnings about Nigeria’s dependence on oil revenues. As the country grapples with the evolving realities of the global oil market, experts stress the urgent need for fiscal discipline, diversification, and transparent economic reforms.