Nigerian National Petroleum Company Limited (NNPCL) has been given a mandate to significantly improve the country’s crude oil production and revenue generation, in a major move aimed at boosting the national buffers and support ongoing expansionary fiscal agenda.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who spoke on the national economic reforms at the ongoing IMF/World Bank annual meetings in Washington DC, said the new mandate given to the national oil company would greatly impact on the country’s foreign exchange (forex) inflows, crude oil production and general revenue profile.
“That’s the mandate they have been given and I think they will deliver,” Edun said.
He also explained ongoing efforts to deal with legacy issues such as subsidy claims and other reconciliations, with a view to ensuring that such legacy issues are resolved transparently.
According to him, a forensic audit of the NNPCL is underway, including reconciliation of subsidy claims so that both the government and the company would be able to have full understanding of what had happened in the past.
“Part of that burden shifted from the government’s budget to NNPC. So, they have a legitimate claim and they have some arrears that need to be given to them,” Edun said, in response to subsidy claims by the NNPCL.
Also, the International Monetary Fund (IMF) yesterday said the direct impact of tariff hike on most African countries is relatively small.
The global agency however cautioned that the indirect impact remains quite significant.
IMF Managing Director, Kristalina Georgieva, who spoke during the IMF press briefing at the ongoing IMF/World Bank annual meetings, explained that different countries face different challenges but recommended that Africa should continue on the path of strengthening buffer levels, and maintaining fiscal discipline.
She said: “The direct impact of tariffs on most of Africa, not on all of Africa, is relatively small, but the indirect impact is quite significant. Slowing global growth means that all other things equal, they would see a downgrade.”
According to her, there is a lot that can be done to broaden the tax base, and a lot that can be done to reduce tax evasion, tax avoidance, using technology.
She said that the World Bank is working on reducing infrastructure obstacles in the continent, to broaden trade.
Georgieva said. “Africa has so much to offer the world. Obviously, they have the minerals, the better resources, the young population. I think that a more unified, more collaborative continent can go a long, long way to make the continent an economic powerhouse. For the oil producers like Nigeria, falling oil prices creates additional pressure on budgets. On the other hand, for the oil importers, this is a breath of fresh air”.
According to her, the global economy growth has been significantly been downgraded because of major trade policy shifts.
She called on countries to work hard to resolve trade tensions as swiftly as possible, preserving openness and removing uncertainties.
She advised countries to address the imbalances that fuel many of the tensions facing world economies today.
She said: “Some countries, like China need to act to boost private consumption and embrace a shift to services. Others like the United States need to reduce fiscal deficits, and in Europe, it is time to complete the single market banking union. It is also about removing internal barriers to intra European Union trade”.
She advised all countries to lower their trade barriers, both tariff and non-tariff.
“Trade-offs will be tough for all, but would be toughest for low income countries, which face both tight financial conditions, global growth slowdown and falling aid flows,” she said.
Continuing, she said that different countries will face different conditions.
“Inflation pressures in some countries are easing. In others, pressures are yet to abate. Central Banks will need to strike a delicate balance between supporting growth and containing inflation. To do so, they must not only adjust policy interest rates, but also rely on credibility to anchor expectations.
“Central bank independence is critical for credibility. Protected open economies, including many emerging markets, are exposed to the trade shocks and tighter financial conditions. They must preserve exchange rate flexibility as a shock absorber in the event of unwarranted currency market volatility,” Georgieva said.
According to the Fund, global public debt-to-gross domestic product (GDP) could reach 117 per cent of Gross Domestic Product (GDP) by 2027. The global public debt position, will be the highest since World War II.
In its latest Fiscal Monitor report, released at the ongoing 2025 IMF-World Bank spring meetings on, the Fund said major policy shifts have heightened global uncertainty.
The report noted that the tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks.
While debt levels in many countries had risen, straining public finances, the fund said rising yields in major economies and widening spreads in emerging markets “further complicate the fiscal landscape”.
“We project global public debt to increase by 2.8 percentage points this year—more than twice the estimates for 2024—pushing debt levels above 95 percent of gross domestic product,” the report reads.
“This upward trend is likely to continue, with public debt nearing 100 percent of GDP by the end of the decade, surpassing pandemic levels.”
According to the IMF, with substantial policy uncertainty and a shifting economic landscape, debt levels could rise further, leading to fiscal policy trade-offs, like “balancing debt reduction, building buffers against uncertainties, and meeting urgent spending needs amid weaker growth prospects and higher financing costs”.
The IMF advised that countries will need to “first and foremost put their own fiscal house in order”, in a world that is uncertain and rapidly changing.
“This means implementing prudent policies within robust fiscal frameworks to build public confidence and help reduce uncertainty,” the fund said.
The institution said fiscal policy should prioritise reducing public debt and establishing and widening buffers to address spending pressures and economic shocks.
In addition, the report recommended that countries with limited “room” in government budgets should implement gradual and credible consolidation plans and allow automatic stabilisers, like unemployment benefits, to work effectively.
