July 07, (THEWILL) — The Nigerian Government last week celebrated the verdict of the International Monetary Fund (IMF) which applauded the positive results of the ‘bold and difficult’ reforms of the present administration.
The IMF’s latest Article IV Consultation affirms that Nigeria is making meaningful progress following a series of significant structural reforms to restore financial discipline and credibility. The Fund subsequently commended Nigeria’s authorities for the bold and politically difficult policies that have “improved macroeconomic stability and enhanced resilience.”
Reacting to the report, the Governor, Central Bank of Nigeria (CBN), Olayemi Cardoso, commented: “At a time of global uncertainty, this assessment reaffirms that responsible, forward-looking policy choices matter. It affirms that Nigeria is regaining credibility, anchoring expectations, and laying the foundation for inclusive, long-term growth. It is both an encouragement to stay the course, and a reminder that resilience and prosperity require continued discipline and vision.”
However, the Government, obviously, downplayed the critical challenges that tether economic development and render brilliant monetary policy initiatives impotent, including fiscal indiscipline and foreign exchange uncertainties highlighted in the report.
The Fund urged the Nigerian Government to rework its N54.99 trillion 2025 budget to reflect the prevailing realities of a less favourable oil price environment which experiences increased external shocks on worsening vulnerability.
“The 2025 budget needs to be recalibrated to lower oil prices,” the IMF directors stated in the report, which warned that the fiscal deficit could widen to 4.7 percent from the adopted 4.1 percent if reworking of the budget was not done. It stated that this is imperative in order to avoid increased public debt burden.
The IMF observed that the indiscipline which characterises Nigeria’s fiscal policy environment poses a serious threat to the expected enhanced economic recovery urging the authorities to adopt a saner attitude in that regard.
The Fund noted that Nigeria’s budget was based on an over-ambitious oil revenue when the country knows the external realities that determine the oil prices, adding that “Nigeria has a consistent habit of over-estimated revenues”.
According to a financial analyst, Ben Umukoro, Nigeria runs a bloated budget because of the corruption in government, especially among the lawmakers. They pad the budget with phantom constituency projects and convert the funds to personal use without impacting on their people. That explains why the revenue is hardly achieved.
While the Government revealed that it generated N6 trillion revenues in the first quarter of 2025, it is still below about N10 trillion prorated for the year.
The government forecast an oil price benchmark of $75 per barrel, production at 2.06ambpd, and N41.81 trillion revenue projection, leaving a deficit of N13.08 trillion deficit. Until recently, oil price has hovered well below the budgeted benchmark while production of 1.74mbpd is far below the projected level.
The Fund raised red flags over what it called “excessive volatility” in the naira exchange rate. It called on Nigerian authorities to urgently adopt a comprehensive FX intervention framework to reduce uncertainty and protect the economy from external shocks, especially given the oil-dependent status of the economy.
“The exchange rate must remain a credible shock absorber,” the IMF said, warning that unmanaged swings could undermine capital inflows and inflation control. This points to the fragile nature of the economy irrespective of the “strong performance” verdict being attributed to it.
Aside from the aspects mentioned by the CBN in passing, the IMF verdict came less than a week after the World Bank ‘s damn report on Nigeria’s deepening slump into the miry clay of poverty.
The World Bank has warned that extreme poverty is growing rapidly in Nigeria and 38 other economies affected by conflict and instability, worsening hunger and pushing development goals further out of reach.
The bank made this known in a statement released on Friday titled “Extreme Poverty is Rising Fast in Economies Hit by Conflict, Instability”, based on its post-COVID assessment of fragile and conflict-affected states.
Nigeria is listed among the 39 economies the bank classified as being in Fragile and Conflict-Affected Situations, a group that includes Afghanistan, Sudan, Syria, Yemen, Haiti, Democratic Republic of Congo, and Venezuela, among others.
“These countries include both those experiencing active conflict and others facing deep instability,” the statement said.
In Nigeria’s case, insecurity from banditry and kidnappings in the Northwest, and a prolonged insurgency in the Northeast, are cited as major drivers of fragility.
According to the bank’s findings, economic conditions in these fragile states have continued to deteriorate since the pandemic, even as other developing economies begin to recover.
“Since 2020, their per capita GDP has shrunk by an average of 1.8 per cent per year, while expanding by 2.9 per cent in other developing economies.
“This year, 421 million people are struggling on less than $3 a day in economies afflicted by conflict or instability—more than in the rest of the world combined.
“That number is projected to rise to 435 million, or nearly 60 per cent of the world’s extreme poor, by 2030,” the report said.
The number of people without access to electricity in Nigeria is put at 86.8 million, the highest world-wide, says a World Bank 2025 report.
This is the third consecutive year of this report showing Nigeria in the lowest position globally.
The report, released yesterday, which covers 2023 and titled: “Tracking Sustainable Development Goal, SDG7: The energy progress report 2025”, also showed that out of the top 20 countries with weakest access 18 were from Sub-Saharan Africa.
The World Bank report further noted that 61 percent of the Nigerian population had access to electricity and 26 percent had access to clean cooking energy in 2023.
The report stated: “In 2023, the 20 countries with the largest electricity access deficits accounted for 76 percent of the global total, up from 75 percent in 2022. Once again, 18 of these countries are in Sub-Saharan Africa.
“For the third consecutive edition of this report, Nigeria (86.8 million), the Democratic Republic of Congo (79.6 million), and Ethiopia (56.4 million) topped the list, together accounting for roughly a third of the entire global access deficit.
“What the IMF is doing is pure cosmetic. It wants to make the Nigerian government happy for adopting its (IMF) policies. But what progress is the country making with such frightening reports on poverty and electricity?”, asked Umukoro.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
