The International Monetary Fund, IMF, has advised Nigeria to be prudent in spending after the implementation of hard economic reforms that has made it to save more revenue.
The Director, Fiscal Affairs Department IMF, Vitor Gaspar, gave this advice at a Fiscal Monitor news conference at the ongoing 2025 IMF/World Bank Spring Meetings in Washington DC on Wednesday.
Gaspar said that there was an urgent need for fiscal authorities and governments to build buffers.
The IMF Director said governments need to act urgently and decisively as they face harsh trade offs and painful choices.
He emphasized the significance for policy makers to invest their political capital in building confidence and trust that starts with keeping their own houses in order.
“This is especially important in a situation that tests the resilience of individual economies, not to mention the entire system.
“Putting the house in order involves three policy priorities. first, fiscal policy should be part of an overall policies.
“Secondly, fiscal policy should in most countries, aim at reducing public debt and rebuilding buffers to create space to respond to spending pressures and other economic shocks through a credible medium term framework.
“Thirdly, fiscal policy should, together with other structural policies, aim at improving potential growth, thereby easing policy trade offs in these times of high uncertainty.
“Fiscal policy must be an anchor for confidence and stability that contributes to a competitive economy, delivering growth and prosperity for all ministers of finance must build trust, tax fairly, spend wisely and take the long team,”; the director said.
On his part, the Nigerian Division Chief in the Fiscal Affairs Department of the IMF, Davide Furceri, said that Nigeria had been able to make some of those painful choices to have space for fiscal savings but it needs to spend wisely.
“Nigeria managed to do a very difficult reform that was important in delivering fiscal savings,” he said.
According to Furceri, the country needs to focus on boosting revenue through improved mobilisation efforts, and secondly, scaling up spending in key areas like social protection and investment.
