THE International Monetary Fund (IMF) has advised the Nigerian government to use the money saved from removing fuel subsidies wisely and focus on important economic reforms.
The global financial body praised Nigeria for making tough economic decisions, especially the removal of fuel subsidies, which has helped the country save money. However, the IMF stressed that this money must be spent carefully and on the right things to support long-term economic stability.
Speaking at a press briefing during the 2025 IMF/World Bank Spring Meetings in Washington, D.C., Davide Furceri, who heads the IMF’s Fiscal Affairs Department for Nigeria, said: “Nigeria managed to do a very difficult reform that was important in delivering fiscal savings.”
Furceri encouraged Nigeria to spend these savings on important areas like healthcare, education, and infrastructure. He also urged the government to find better ways to increase its income (revenue) and improve how public funds are managed.
“Spending must be done wisely – that means better prioritisation and greater efficiency,” he said.
He emphasised the importance of strong fiscal institutions, adding that,” Medium-term fiscal frameworks and solid public financial management systems are essential.”
Furceri stressed that strong fiscal institutions provide a fiscal anchor to guide necessary adjustments and help reduce uncertainty.
“We want fiscal policy to be a source of stability, not a source of volatility,” he added.
IMF calls for stronger financial safety nets
Also speaking at the event, Vitor Gaspar, the IMF’s Director of Fiscal Affairs, said countries like Nigeria need to build up their financial “buffers” savings that can be used in emergencies.
He said governments must act quickly and use their political will to win public trust. Strong financial policies, he added, are key to surviving tough times and helping the economy grow in a stable way.
Gaspar laid out three main goals for governments:
- Make sure fiscal policy supports the country’s overall economic strategy.
- Save money to handle future economic shocks.
- Use smart policies to help the economy grow over time.
He said, “Putting house in order involved three policy priorities. First, fiscal policy should be part of overall policies.
“Secondly, fiscal policy should, in most countries, aim at rebuilding buffers to create space to respond to spending pressures and other economic shocks through a credible medium-term framework.
“Thirdly, fiscal policy should, together with other structural policies, aim at improving potential growth, thereby easing policy trade-offs in these times of high uncertainty.”
Gasper urged finance ministers to earn public trust, ensure fair taxation, allocate resources responsibly, and adopt a long-term approach.
Despite recent reforms, the IMF has cut its forecast for Nigeria’s economic growth. The country’s economy is now expected to grow by 3.0 per cent in 2025 down from the 3.2 per cent predicted earlier.
This new figure was included in the IMF’s April 2025 World Economic Outlook report, released on Tuesday, April 22. The IMF said the lower forecast is due to weaker oil prices.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.