IMF to Nigeria: Clean up oil sector, cut debt smartly
The International Monetary Fund (IMF) has urged Nigeria to ramp up transparency in its oil sector and tighten its borrowing strategy to fully reap the benefits of its ongoing economic reforms.
Speaking at the IMF and World Bank Spring Meetings in Washington, D.C., Abebe Selassie, Director of the IMF’s African Department, praised Nigeria’s recent steps—particularly the removal of fuel subsidies—but warned that more must be done to ensure the reforms translate into real fiscal gains.
“The subsidy was draining limited tax revenue without targeting the people who need it most,” Selassie said. “It’s encouraging to see the government act boldly, but now is the time to make sure those savings actually flow into the national budget.”
Selassie also stressed the need for Nigeria to expand its social safety nets and drive private sector investment to diversify its economy beyond oil. “The country needs to build more schools, more infrastructure, and that requires smart, long-term revenue strategies—not unchecked borrowing,” he added.
With Nigeria’s public debt hitting N142.3 trillion as of late 2024, the IMF official cautioned against reckless borrowing, recommending a “prudent and agile” financing approach.
In the short term, he acknowledged that Nigeria may need to borrow but emphasized that such borrowing should be strategic and measured. “What’s critical now is accountability, diversification, and sustainable growth,” Selassie concluded.
