The World Bank has raised concerns over the Federal Government’s assumptions in the proposed 2025 budget, calling projections for oil production and pricing “ambitious.” However, the Nigerian government insists its estimates are grounded in the country’s economic potential.

In its May 2025 Nigeria Development Update presented in Abuja, the World Bank noted that the budget’s assumptions 2.1 million barrels per day (mbpd) oil production and $73 per barrel  may be overly optimistic, especially when current production hovers around 1.6 mbpd and global prices are closer to $60 per barrel.

The Bank acknowledged that most economic indicators are trending positively but warned that high inflation persists. It also stressed that to reach the government's $1 trillion economy target by 2030, Nigeria must grow at five times its current rate of 3.8%.

Despite these challenges, the Bank urged the government to remain committed to ongoing economic reforms, including subsidy removal and foreign exchange market liberalization.

FG Defends Projections

Minister of Budget and Economic Planning, Atiku Bagudu, disagreed with the Bank’s assessment, stating the budget projections are realistic.

Are the projections ambitious? No, they are not. Even the World Bank presentation acknowledged Nigeria’s premium oil grades, which can justify the $73/barrel price. While 1.6mbpd is the current production, we've achieved 2.2mbpd in the past and have the technical capacity to return there,” he said.

Finance Minister Wale Edun emphasized the need for transparency, particularly in oil revenue, noting that a forensic audit of NNPC Limited is underway to ensure all due funds are recovered.

CBN, States Weigh In

Central Bank Governor Yemi Cardoso stressed that the economy needs a sustained period of stability to grow. He cited reduced foreign exchange volatility — from 4% a year ago to under 0.5% — as a sign of progress.

“We must remain proactive in identifying and mitigating risks before they become overwhelming,” Cardoso said.

Plateau State Governor Caleb Mutfwang defended the states’ increased share of revenue, noting that inflation has reduced purchasing power despite higher allocations.

World Bank: Fiscal Prudence Still Key

The World Bank highlighted several areas of concern, especially in fiscal management:

  • Only 50% of PMS subsidy savings are currently being remitted to the Federation Account by NNPC Limited.

  • Budget 2025 may carry a higher-than-expected fiscal deficit due to aggressive revenue projections.

  • Capital spending should align with broader fiscal consolidation goals to curb inflation.

The Bank emphasized the need for improved spending efficiency and transparency — especially at the state level, which now receives more revenue (₦13.8 trillion in 2024) than the federal government (₦12.3 trillion).

Four-Point Strategy for Growth

To accelerate growth and create more jobs, the World Bank proposed a private sector-led, public sector-enabled approach centered on:

  1. Closing infrastructure gaps, particularly in electricity and transportation.

  2. Enhancing competition and improving the business environment to boost entrepreneurship.

  3. Expanding access to finance for startups and growing businesses.

  4. Improving sector-specific policies to unlock potential in key industries.

While acknowledging progress made so far, the World Bank concluded that Nigeria’s development aspirations hinge on bold, sustained reforms and greater synergy between federal and state efforts.