The International Monetary Fund (IMF) has warned that Nigeria’s revenue-to-Gross Domestic Product (GDP) ratio could decline further to 9.2 per cent by 2030, despite recent efforts to boost government income through fiscal and tax reforms.
According to the IMF’s latest Fiscal Monitor report, released yesterday during the ongoing World Bank/IMF Annual Meetings in Washington, DC, Nigeria’s fiscal position remains fragile, with revenue growth lagging behind the pace of economic expansion.
The Fund projected that Nigeria’s revenue-to-output ratio—which stood at 10.8 per cent in 2024—will fall to 9.6 per cent in 2025, and further dip to 9.1 per cent by 2026, before stabilising around 9.2 per cent in 2030.
This would place Nigeria well below the sub-Saharan African (SSA) regional average of 15.8 per cent, highlighting persistent structural weaknesses in tax collection, public finance management, and non-oil revenue generation.
In comparison, oil-producing countries are projected to record an average revenue-to-GDP ratio of 10.3 per cent by 2030—still higher than Nigeria’s forecast.
The IMF report, which benchmarks countries’ fiscal performance, noted that while Nigeria’s recent tax reforms have been widely applauded, their impact on overall revenue mobilisation remains limited in the short term. The size of the Nigerian economy—now valued at over ₦372 trillion—has outpaced the government’s ability to collect taxes efficiently, thereby keeping the fiscal ratio low.
On the expenditure side, the Fund projected that Nigeria’s public spending as a share of GDP will hover between 12.3 and 12.5 per cent from 2025 to 2030. This is significantly below both the SSA average of 18.2 per cent and the 13.5 per cent projected for oil-producing peers.
Analysts say this scenario reflects Nigeria’s constrained fiscal capacity to address its massive infrastructure deficit, estimated by Moody’s at $3 trillion annually, and to provide adequate social and capital investments.
However, the IMF offered a positive outlook on Nigeria’s debt sustainability. It forecast that the country’s gross debt-to-GDP ratio will decline from 39.3 per cent in 2024 to 33.8 per cent by 2030, indicating some fiscal consolidation. This compares favourably with the SSA average of 43.9 per cent and the projected 35.4 per cent for oil-exporting economies.
Speaking at a press briefing on the report, Davide Furceri, Deputy Division Chief at the IMF’s Development Macroeconomic Division, stressed the importance of balancing revenue growth with spending efficiency.“On the revenue side, there is scope to enhance mobilisation through stronger tax administration and broader reforms,” Furceri said. “Equally, improving the efficiency and targeting of public spending will be essential to sustain growth and reduce fiscal vulnerabilities.”
The IMF’s latest warning underscores the urgent need for Nigeria to deepen fiscal reforms, strengthen tax compliance, diversify revenue sources beyond oil, and ensure that every naira spent delivers maximum economic value.
