The World Bank has raised concerns over key assumptions in Nigeria’s proposed 2025 budget, describing the oil production and price targets as “ambitious.” In its May 2025 Nigeria Development Update presented in Abuja, the bank stated that Nigeria’s projected oil production of 2.1 million barrels per day and $73 per barrel oil price are optimistic, given the current output of 1.6 million barrels per day and a global average price of $60.
Despite this, the Federal Government defended the assumptions, insisting they are based on the country’s potential. Finance Minister Wale Edun, Budget and Planning Minister Atiku Bagudu, and other top officials were present at the report presentation.
According to the World Bank, Nigeria must significantly increase its economic growth rate—currently at 3.8%—if it intends to achieve its target of a $1 trillion economy by 2030. It stressed that inflation remains high and urged the Federal Government to stay the course on its reform agenda.
The report also revealed that savings from the removal of petrol subsidies have not been fully transferred to the Federation Account. Although the Nigerian National Petroleum Company Limited (NNPCL) began remitting subsidy gains in January 2025, it has only transferred 50%, using the remainder to offset arrears. The bank called for full remittance to support fiscal management.
Additionally, the World Bank warned that the 2025 budget’s revenue projections might lead to a larger-than-expected fiscal deficit. It emphasized the importance of expenditure efficiency, especially at the state level, where revenues now surpass federal allocations—N13.8 trillion for states versus N12.3 trillion for the federal government.
To spur growth and achieve economic transformation, the World Bank recommended a four-point strategy: closing infrastructure gaps, enhancing market openness and business environment, improving access to finance, and reforming key sectors to unlock their full potential.
Finance Minister Edun emphasized the need for transparency, especially in oil revenue data, and revealed that a forensic audit of NNPCL is underway to recover all outstanding funds due to the Federation Account. He noted that investment is critical for boosting productivity and job creation.
Budget Minister Bagudu countered the World Bank’s skepticism, asserting that the budget assumptions are realistic, pointing to Nigeria’s premium oil grades and technical capacity to produce higher volumes.
CBN Governor Yemi Cardoso stressed the importance of economic stability, noting that the central bank has reduced foreign exchange volatility and is taking proactive steps to manage economic risks.
Meanwhile, Plateau State Governor Caleb Mutfwang highlighted the burden state governments face due to insecurity. He said increased revenue has been absorbed by growing security needs, which hinder investments in critical infrastructure.
Despite the challenges, the World Bank maintained that Nigeria’s fiscal outlook is cautiously optimistic, provided reform momentum is sustained and revenue gains are fully leveraged.
