Nigeria’s ₦54.9 Trillion Budget: Balancing Ambition with Prudence as FG, World Bank Diverge on Funding Plans

n a pivotal moment for Nigeria’s economic trajectory, the Federal Government’s ambitious ₦54.9 trillion budget for 2025 has sparked a nuanced dialogue with the World Bank over the nation’s funding strategy. While both entities share a commitment to Nigeria’s growth and stability, differing perspectives on fiscal approaches have come to the forefront.

Nigeria’s Fiscal Ambitions and World Bank’s Prudence

President Bola Tinubu’s administration has outlined a comprehensive budget aimed at revitalizing key sectors, including infrastructure, education, and healthcare. To finance this expansive plan, the government is exploring various avenues, such as issuing a $1.7 billion Eurobond and a $500 million sukuk bond, alongside seeking concessional loans and climate financing.

However, the World Bank has expressed caution regarding Nigeria’s increasing reliance on external borrowing. The institution emphasizes the importance of realistic budgeting, improved tax administration, and reducing governance costs to ensure fiscal sustainability.

Collaborative Efforts Amidst Economic Reforms

Despite these differences, the World Bank continues to support Nigeria’s reform initiatives. In 2024, the Bank approved a $2.25 billion package comprising the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) and the Accelerating Resource Mobilization Reforms (ARMOR) programs. These initiatives aim to stabilize the economy, boost non-oil revenues, and protect vulnerable populations through targeted social programs.

Additionally, the World Bank has committed $2.2 billion for six key projects in 2025, focusing on education, health, digital infrastructure, and economic resilience. This continued partnership underscores a shared vision for Nigeria’s development, albeit with differing views on the optimal path forward.

Navigating the Path Ahead

As Nigeria endeavors to balance its developmental aspirations with fiscal responsibility, the ongoing discourse with the World Bank highlights the complexities of economic policymaking. The government’s commitment to bold reforms and the Bank’s emphasis on prudent financial management reflect a dynamic interplay aimed at fostering sustainable growth and improving the lives of Nigerians.

This evolving narrative underscores the importance of collaborative engagement and adaptive strategies in navigating the challenges and opportunities that lie ahead for Nigeria’s economy.