The International Monetary Fund (IMF) has advised the Nigerian government, led by Chief Bola Tinubu, to be prudent in its spending following the implementation of difficult economic reforms aimed at boosting fiscal savings.
Speaking at a Fiscal Monitor news conference during the 2025 IMF/World Bank Spring Meetings in Washington, D.C. on Wednesday, Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, stressed the need for countries, including Nigeria, to build fiscal buffers and restore confidence through sound economic management.
Gaspar outlined three key fiscal priorities: aligning fiscal policy with broader macroeconomic goals, reducing public debt through credible medium-term frameworks, and enhancing potential economic growth via structural reforms.
Davide Furceri, IMF’s Division Chief for Nigeria, acknowledged Nigeria’s implementation of difficult reforms that have created room for fiscal savings.
However, he emphasised the need for these savings to be used wisely, especially in areas such as social protection and public investment.
Gaspar stated, “This is especially important in a situation that tests the resilience of individual economies, not to mention the entire system. Putting the house in order involves three policy priorities. First, fiscal policy should be part of an overall policies.
“Secondly, fiscal policy should, in most countries, aim at reducing public debt and 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.
“Fiscal policy must be an anchor for confidence and stability that contributes to a competitive economy, delivering growth and prosperity for all ministers of finance must build trust, tax fairly, spend wisely and take the long team.
“Nigeria managed to do a very difficult reform that was important in delivering fiscal savings.
“That said, we understand that many countries, including Nigeria, face pressing spending needs. But spending must be done wisely, this means stronger prioritisation and greater efficiency in how resources are allocated.
“One key message not just for Nigeria, but for many countries, is the importance of strong fiscal institutions. Medium-term fiscal frameworks and solid public financial management systems are essential.
“They 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 stressed.
(NAN)
