IMF urges Nigeria to focus on revenue generation, expenditure sides of public finance
The International Monetary Fund (IMF) on Wednesday urged the Federal Government to focus on revenue and expenditure sides of public finance.
It also stressed on the need to prioritise fiscal policies that strengthen public finance management and capital expenditure on infrastructure and education in order to consolidate the country’s macroeconomic gains.
Speaking at Fiscal Monitor session at the ongoing World Bank/IMF Annual Meetings in Washington DC, Division Chief, Fiscal Affairs Department IMF, Davide Furceri, said, “Nigeria has made significant progress in recent years. Several laws have been passed to streamline the tax code, reduce tax expenditures and ease the compliance burden for businesses and coerce. These are steps in the right direction”.
On the back of the higher growth projection for the country, he stated that Nigeria must muster further political will to implement additional fiscal policies that reinforce emerging gains and reduce vulnerabilities to domestic and external shocks.
The IMF had raised Nigeria’s growth forecast to 3.9 per cent in 2025 and 4.1 per cent in 2026, citing improvements in the country’s macroeconomic outlook.
According to him, the Nigeria’s ongoing fiscal and structural reforms were neutral and well aligned with monetary policies designed to curb inflation and stabilise the economy.
He called for greater efficiency in public spending to ensure better outcomes for citizens.
According to him, optimising how resources are allocated and spent could deliver substantial economic and social gains.
“In addition, it is important to increase social spending, particularly to support vulnerable households and ensure inclusive growth,” Furceri said.
He urged Nigeria to continue to implement key fiscal and monetary reforms under its medium-term economic framework, fiscal discipline, improved revenue generation and enhanced transparency in public finance management.
He added that IMF’s endorsement reflected growing confidence in Nigeria’s reform trajectory, even as the government pushes for policies aimed at boosting growth, reducing inequality and sustaining macroeconomic stability.
He said: “These are policies that go in the right direction. On the spending side, there is scope to, on the one hand, improve the efficiency of the spending itself — and we also talk in the chapter about the gains that can be achieved when countries improve the efficiency and composition of spending — but also to increase social spending to address social vulnerability in the country”.
Director of the Fiscal Affairs Department at the IMF, Vitor Gasper, said Nigeria needs to prioritise fiscal policy issues by strengthening public finance management and improving the quality of spending to help stimulate growth and achieve sustainability in its debts.
Nigeria’s debt position stood at N152.3 trillion as at June 2025, data from Debt Management Office (DMO) showed.
According to him, persistence of spending above tax revenues will push debts higher threatening sustainability and financial stability.
He called for more expenditure on infrastructure and education, by changing the composition of public spending while keeping the overall envelope fixed.
He advised that prioritizing fiscal policy is essential to support debt sustainability and prepare fiscal buffers to use in case of severe adverse shocks including financial crises.
He said: “But while we do recognise that the fiscal equation is very hard to square politically, the time to prepare is now. Improving growth prospects and enhancing public trust in government help balance the fiscal equation. Fiscal policy is structural policy. Deploying fiscal structural policy improves growth prospects and reinforces complementarities and synergies with the private sector”.
