LCCI MEDIA STATEMENT ON PROJECTIONS BY IMF AND WORLD BANK 2025
BEYOND THE FORECAST: RESETTING NIGERIA’S ECONOMIC COMPASS
The Lagos Chamber of Commerce and Industry (LCCI) acknowledges with deep concern the projections presented in the April 2025 World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) of the International Monetary Fund (IMF) and the World Bank at the ongoing 2025 Spring Meetings in Washington D.C. These reports underscore the downward revision in Nigeria’s economic growth forecast to 3.0% in 2025 and 2.7% in 2026, citing a confluence of global and domestic headwinds. They include subdued crude oil prices below the federal budget benchmark of $75, heightened global trade tensions, weakening demand from advanced economies, and volatility in international financial markets.
The IMF’s concerns regarding Nigeria’s vulnerability to external shocks are not unfounded. The country remains heavily dependent on crude oil for foreign exchange, making it susceptible to commodity price swings. The increased sovereign spread, volatile investor sentiment, and depreciating exchange rates paint a precarious macroeconomic landscape. While Nigeria recorded a positive balance of payments in 2024 and returned to the international debt market, the sustainability of these gains remains uncertain without deeper structural reforms.
The Chamber is also alarmed by the IMF’s inflation projection of an average of 26.5% in 2025 and a surge to 37.0% by 2026. Although recent policy measures, such as the unification of exchange rates and cessation of deficit financing by the Central Bank, are commendable, they remain insufficient in isolation. However, the potential for economic growth in the economy gives some hope that if we sustain ongoing reforms in the oil and gas sector to drive more crude production, increase domestic refining capacity, and reduce fuel importation, we could record an improved oil revenue to support our budget aspirations and projections. In terms of increased tax revenue, we urge the federal government to start the implementation of the recommended tax reforms, driven by a better tax administration system.
In the face of fragile economic conditions in Nigeria, we must prioritize a better-managed fiscal policy environment that drives public debt reduction, creating bigger buffers to accommodate the likely increase in defence spending pressures and trade-related shocks to the economy in the short term. With crude oil revenue under attack from falling prices, the government should get stricter with cutting the cost of governance within adjusted budget assumptions that reflect current realities. In a scenario of projected global public debt reaching 117 percent of GDP by 2027 (the highest level since World War II), Nigeria’s current debt level is close to attaining this projection if nothing drastic is done to reduce the value and cost of borrowing within the short term.
A stern focus can be directed on the following interventions:
1. On inflationary pressures that seem not to have sufficiently abated even with the rebased computations, we must invest more in infrastructure that drives the productive real sector of the economy. Food inflation has remained the major driver of the headline inflation rate for almost two years.
2. We may need to review and reprioritize the 2025 budget assumptions to reflect a lower oil revenue expectation. This should also call for necessary and critical adjustments to non-essential recurrent expenditures and non-productive subsidies.
3. To intensify our non-oil export promotion, the government should provide incentives to empower high-growth sectors like solid minerals, the creative industry, and the digital economy.
4. We can boost agricultural production and agro-processing through targeted investments in local fertilizer production, highly subsidized extension services, tech-driven irrigation, and value chain infrastructure.
5. To drive inclusive economic growth, we need to boost access to microfinance, improve and stabilize power supply, and drive regulatory reforms that support MSMEs and local manufacturing for job creation, revenue generation, and economic growth.
Dr. Chinyere Almona, FCA
Director General, Lagos Chamber of Commerce and Industry (LCCI)
April 24, 2025
