By Uche Usim
The International Monetary Fund (IMF) has called on Nigeria’s economic managers to urgently embrace prudent fiscal discipline and efficient resource management, warning that economic stability hinges on how well governments, especially in emerging economies, navigate rising global uncertainties.
Speaking during the 2025 IMF/World Bank Spring Meetings in Washington DC, Davide Furceri, Division Chief in the Fiscal Affairs Department of the IMF, acknowledged the fiscal adjustments Nigeria has undertaken in recent years. However, he emphasized that continued discipline in government spending is essential to build resilience and unlock long-term growth.
Furceri noted that Nigeria faces the dual challenge of addressing urgent social and developmental needs while managing limited fiscal space. He stressed the importance of enhancing revenue generation through improved mobilization efforts and leveraging those resources to expand investment in critical sectors such as social protection and infrastructure.
“We understand that many countries, including Nigeria, face pressing spending needs. But spending must be done wisely, which means stronger prioritization and greater efficiency in resource allocation,” Furceri stated. He added that sustainable development requires strong fiscal institutions—such as well-designed medium-term frameworks and robust public financial management systems—which act as fiscal anchors and provide clarity for economic planning.
Reinforcing this position, Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department, warned that fiscal policy must serve as a force for stability rather than becoming a source of economic turbulence. He urged Nigerian authorities to build credible financial buffers that can help absorb shocks in an increasingly volatile global environment.
“Policymakers must invest their political capital in building confidence and trust, starting with keeping their own houses in order,” Gaspar remarked. He stressed that the credibility of fiscal institutions, the fairness of tax systems, and the judicious use of public funds are vital for long-term national prosperity.
Gaspar advocated a comprehensive approach to fiscal resilience. He said governments must integrate fiscal policy with broader economic strategies, ensuring coherence with monetary and structural reforms. In addition, he emphasized the importance of reducing public debt and rebuilding fiscal buffers to create the financial agility needed during downturns. Equally critical, he argued, is the pursuit of structural reforms that enhance economic productivity, support inclusive growth, and help nations navigate complex trade-offs.
“Fiscal policy must be an anchor for confidence and stability, contributing to a competitive economy, delivering growth and prosperity for all. Ministers of finance must build trust, tax fairly, spend wisely, and take the long-term approach,” Gaspar concluded.
The IMF also raised concerns about escalating risks to global fiscal management, citing the disruptive impact of protectionist measures such as the recent wave of tariffs imposed by the United States.
These developments, the Fund noted, have upended global trade dynamics and forced many countries to reassess their fiscal strategies and economic buffers.
For Nigeria, the message is unmistakable. In a global environment marked by uncertainty and intensifying fiscal pressures, the country must urgently prioritize resilience. This means enhancing domestic revenue, instituting spending discipline, and committing to reforms that foster inclusive, long-term development. Only then can Nigeria build a stable economic foundation capable of withstanding external shocks and delivering shared prosperity.