World Bank raises Nigeria’s 2025 economic growth forecast to 3.6%

To minimise the impact of increased global uncertainties on government borrowing and public debt, Nigeria must efficiently manage resources on spendings, the International Monetary Fund (IMF) has advised.

Deputy Division Chief of the Development Macroeconomic Division at IMF Research Department, Davide Furceri, disclosed this yesterday at a press briefing on the April 2025 IMF Fiscal Monitor report released on the sidelines of the ongoing Spring Meetings of the IMF and the World Bank.

Also, the IMF in its April 2025 Fiscal Monitor report has projected steady decline in Nigeria’s Debt-to-GDP to 45.4 per cent by 2030 from 52.9 per cent last year.

As of mid-2024, Nigeria’s debt-to-GDP ratio had risen to 55 per cent, a significant increase from 42.4 per cent at the end of 2023. This uptick is attributed to factors such as exchange rate depreciation and increased domestic borrowing at higher interest rates.

The series of recent tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks.

They come in the context of rising debt levels in many countries and already strained public finances, which in many cases will also need to accommodate new and permanent increases in spending, such as defense.

Maintaining that Nigeria has to scale up resources on social spending, Furceri stressed the importance of building fiscal buffers to shield the country against future shocks, even as it projected a gradual decline in Nigeria’s debt-to-GDP ratio over the next five years. Nigeria’s debt-to-GDP ratio was 51.28 per cent in 2024.

This ratio is expected to decrease to 40 per cent in 2025 due to a re-base of the Nigerian economy. The debt-to-GDP ratio has been fluctuating, reaching an alltime high of 53.8 per cent in September 2024.

Also, according to the newly released Fiscal Monitor report, Nigeria’s public debt burden while still elevated is projected to follow a downward trajectory.

After rising to 52.9 per cent of GDP in 2024, the IMF forecasts that it will fall slightly to 52.5 per cent in 2025, and then decline steadily to 45.4 per cent by 2030. The Fund attributes this improvement to anticipated stronger economic growth and enhanced revenue mobilisation efforts.