The World Bank and the Nigerian government have expressed divergent views on the key assumptions underpinning Nigeria's 2025 budget, according to the bank's May 2025 Nigeria Development Update presented on Monday in Abuja.

The global financial institution described Nigeria's budget assumptions of 2.1 million barrels per day oil production and $73 per barrel price as "ambitious" given the current production level of 1.6 million barrels per day and international market price of $60 per barrel.

However, Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, disagreed with the World Bank's assessment, stating that the projections were based on the country's potential. "Are the projections in the 2025 budget ambitious? No, they are not, in all modesty. This is because even in the presentation, two things were said: the oil price which is now $60 per barrel but the average for Nigeria is $73 because of our premium grades," Bagudu explained.

Economic Growth Challenges

The World Bank noted that while most economic indicators remain positive, inflation continues to be high. The bank emphasized that for Nigeria to achieve its target of a $1 trillion economy by 2030, the growth rate needs to increase fivefold from its current rate of 3.8 percent.

Despite these challenges and the rising cost of living, the World Bank urged the Federal Government to maintain its course in implementing economic reforms. The bank commended the government for removing subsidies on petrol and liberalizing the foreign exchange market.

Fiscal Recommendations

Dr. Alex Sienaet, Lead Economist at the World Bank Country Office, presented the report to an audience that included Ministers of Finance, Budget and National Planning, Communication, Innovation and Digital Economy, the Governor of the Central Bank of Nigeria, and the Governor of Plateau State.

The World Bank report described Nigeria's fiscal outlook as "cautiously optimistic" but emphasized the need to consolidate recent advances. It highlighted three key recommendations:

First, ensuring that the full revenue gains from the removal of the PMS subsidy, estimated at about 2.6 percent of GDP in 2024, are transferred to the Federation Account. The report noted that despite the subsidy being fully removed in October 2024, NNPCL only started transferring revenue gains to the Federation in January 2025 and has been remitting only 50 percent of these gains.

Second, close monitoring of the 2025 budget implementation is essential due to what the bank considers "overly ambitious revenue assumptions" that may lead to a larger-than-anticipated fiscal deficit.

Third, sustained efforts to enhance expenditure efficiency and transparency are crucial to maximizing development outcomes, with particular responsibility falling on states, which now receive more revenue (N13.8 trillion in 2024) than the Federal Government (N12.3 trillion).

Government Response

Minister of Finance, Wale Edun, emphasized the need for transparency in fiscal data and the oil revenue sector. "In terms of where we go next, the key is investment. It is investments that allow increases in productivity that grows the economy and creates jobs," he stated.

Edun also revealed that the government is conducting a forensic audit of NNPC Limited and assured that all monies due to the federation account from the national oil company would be recovered.

CBN Governor, Yemi Cardoso, added that the economy needs a period of sustained stability to grow. "We recognize our role as the custodian of stability and we recognize what we have to do to ensure that we accomplish and attain stability," Cardoso explained.