Allocate 1% Of GDP To Education, Infrastructure, IMF Tells Nigeria

Nigeria could unlock a caller question of economical maturation by simply reallocating a tiny portion of its budget, astir 1 percent of Gross Domestic Product (GDP) from recurrent and administrative expenses to productive sectors similar acquisition and infrastructure, the International Monetary Fund (IMF) has said.

Nigeria’s spending connected acquisition has been connected a diminution successful narration to its GDP since 2012, dropping from 0.55 percent successful 2012 to 0.35 percent successful 2022. In 2023, Nigeria devoted lone 4.4 percent of its full expenditure to education, according to information from the World Bank, a fig acold beneath the UNESCO-recommended 20 per cent benchmark for nationalist acquisition budgets.

In 2025, the authorities allocated 7.08 per cent of the N66.11 trillion full fund to education, a alteration from 8.21 per cent successful 2024.

In its October 2025 Fiscal Monitor Report entitled “Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth,” the Fund argued that emerging marketplace economies specified arsenic Nigeria could execute arsenic overmuch arsenic a six per cent emergence successful output from better-targeted spending, without having to rise full expenditure.

According to the Fund, Nigeria’s occupation is not however overmuch it spends, but however it spends. While nationalist expenditure has grown implicit the years, a ample information inactive goes into wages, subsidies, and administrative costs – areas that bash small to thrust growth.

Deputy Division Chief of the IMF’s Development Macroeconomic Division, Davide Furceri, said: “Currently, what we are projecting for Nigeria is simply a neutral fiscal stance, which we judge is accordant with monetary policies aimed astatine reducing inflation.

“On the spending side, determination is country to amended efficiency. Substantial gains tin beryllium achieved erstwhile countries heighten the creation of their spending. It is besides important to summation societal spending, peculiarly to enactment susceptible households and guarantee inclusive growth.”

The Fund’s planetary reappraisal of nationalist spending ratio recovered that emerging economies discarded astir one-third of imaginable worth from existing budgets. In low-income countries, this “efficiency gap” rises to 39 percent, compared to 31 percent successful precocious economies.

For Nigeria, the IMF estimates that closing the ratio spread could boost output by up to 7 per cent. Thus, reallocating astir N2 trillion, which is astir 1 percent of GDP, from low-impact recurrent costs to superior projects could make N12–N18 trillion successful semipermanent economical gains.

Nigeria presently spends astir 12 per cent of its GDP done the nationalist sector, good beneath the 32 per cent mean for emerging markets.

The IMF said specified an imbalance limits the country’s quality to concern semipermanent maturation and quality superior development.  It urged the authorities to redirect resources toward superior formation, education, and research, which person a stronger interaction connected productivity.

“On the gross side, determination is inactive scope to amended collections done taxation medication reforms and broader gross mobilisation successful ways that bash not harm growth. Nigeria has made notable progress, simplifying the taxation code, reducing taxation expenditures, and easing compliance for businesses. These are steps successful the close direction,” Furceri said.

While Nigeria’s nationalist debt, estimated betwixt 44 and 46 per cent of GDP, remains mean by planetary standards, the IMF warned that precocious indebtedness work costs which consumes astir fractional of revenues proceed to compression fiscal space.

The Fund besides cautioned that rigid budgets dominated by recurrent obligations, wages, subsidies, and statutory transfers permission small country for transformative investments.

Citing countries similar Togo and Serbia, which person implemented medium-term budgeting and spending reviews, the IMF said Nigeria could follow akin reforms to amended ratio and execute amended outcomes.

Beyond the macro numbers, the Fund stressed that investing successful acquisition and infrastructure reduces inequality and promotes inclusive growth.

Drawing from examples specified arsenic Brazil’s Bolsa Família and Rwanda’s acquisition reforms, the IMF said countries that transmission much resources into quality superior thin to grounds stronger and fairer economical progress.

Its projections amusement that reallocating conscionable a fraction of administrative spending toward acquisition and wellness could assistance semipermanent GDP by up to 6 per cent portion improving income distribution.

The IMF outlined a acceptable of cardinal reforms it believes could assistance Nigeria walk much efficiently and execute stronger, much inclusive growth.

These see conducting yearly spending reviews to place and destruct waste, digitising fund and procurement systems to heighten transparency and curb leakages, and reforming wage and subsidy structu...