Nigeria’s 2025 Budget Assumptions Unrealistic, May Worsen Deficit — World Bank
The World Bank has warned that Nigeria’s 2025 budget projections are overly optimistic and could result in a wider fiscal deficit if not carefully monitored.
The warning came on Monday during the presentation of the Nigeria Development Update (NDU) at an event in Abuja attended by top federal officials, state governors, and private sector leaders.
According to the Bank, the federal government’s assumption of 2.1 million barrels per day oil production and a $73 per barrel oil price is “ambitious” in light of the country’s current 1.6 million barrels output and the international market price of around $60.
“The 2025 budget has overly ambitious revenue assumptions and may lead to a larger-than-anticipated fiscal deficit,” said Dr. Alex Sienaert, Lead Economist at the World Bank’s Nigeria office. He stressed that consolidating gains from reforms, particularly fuel subsidy removal, was critical for fiscal discipline.
The Bank also noted that only half of the estimated 2.6 percent of GDP savings from subsidy removal are being remitted by NNPCL, with the remainder used to clear arrears. “Full remittance to the Federation Account is essential,” Sienaert added.
Beyond the budget, the Bank identified four key actions to spur inclusive growth: addressing infrastructure gaps, improving the business environment, expanding access to finance, and reforming strategic sectors.
In response, Finance Minister Wale Edun emphasized that transparency in oil revenues is a government priority, disclosing that “a forensic audit of NNPC is ongoing to recover all funds due.”
Budget Minister Atiku Bagudu defended the oil benchmarks, saying, “We’ve produced 2.2 million barrels before. Our projections are based on capacity, not mere guesses.”
CBN Governor Yemi Cardoso insisted that macroeconomic stability remains the apex bank’s focus, while Plateau Governor Caleb Mutfwang highlighted insecurity as a major fiscal drain on state budgets.
