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| World Bank warns of budget revenue risks. |
A recent World Bank report labels Nigeria’s record ₦54.99 trillion 2025 budget as overly ambitious. It warns the Federal Government may turn to the CBN’s Ways and Means facility if revenue falls short.
Nigeria’s economy grew 4.6 percent in Q4 2024, its fastest pace in a decade. Bold reforms drove that growth but inflation stayed high. The Bank projects a 3.6 percent expansion in 2025.
President Tinubu signed the Appropriation Act on May 13, 2025. The bill rose from an initial ₦49.7 trillion to ₦54.99 trillion, Nigeria’s largest ever.
The Bank warned key assumptions—2.1 million barrels per day oil output and $75 per barrel price—are optimistic. Actual 2024 production was 1.6 million bpd, with crude around $60.
If revenue misses targets, Nigeria risks renewed deficit financing under Ways and Means. That could damage fiscal sustainability and confidence in the naira.
The Federal Government disagreed. It says assumptions reflect growth potential, not wishful thinking, and remains committed to reforms.
Business leader Joe Abah calls the budget “miracle budgeting.” He questions how output jumps nearly 30 percent in one year without major new fields.
World Bank lead economist Alex Sienaert noted revenue targets look hard to meet even after subsidy gains and tax reforms.
Inflation climbed above 24 percent in 2024, heightening living cost pressures. The Bank urges faster social support to protect vulnerable households.
Only a third of the targeted 15 million citizens received N25,000 cash transfers. Delays risk widening hardship and public distrust.
Reforms like unifying FX rates and ending petrol subsidies boosted revenue by 4.5 percent of GDP in 2024. But only half of those gains reached the federation account.
Stable FX markets helped rebuild reserves to over $37 billion, offering a buffer against external shocks.
Despite growth, debt service climbed. The fiscal deficit fell to 3 percent of GDP in 2024, down from 5.4 percent the prior year. Yet fresh borrowing looms if revenues underperform.
To reach a $1 trillion economy by 2030, Nigeria needs growth five times faster than current rates. The Bank stresses job creation and productivity gains.
Sienaert urged ending the remaining electricity subsidy, calling it wasteful and regressive. Removing it could free funds for critical infrastructure.
Critics say the budget’s scale shows political will for reforms. Supporters argue that ambitious targets can drive efficiency and accountability. Both sides agree on the need for realistic assumptions.
Nigeria must closely monitor budget execution. Transparent reporting and independent audits will be key to avoid arrears and off-budget borrowing. Balanced fiscal policies will underpin long-term growth.