Nigeria needs to adapt its 2025 budget to lower oil prices and scale up cash transfers to shield the most vulnerable parts of its population, the International Monetary Fund said on Wednesday.

Releasing the results of its routine "Article IV" assessment of Nigeria's economic policies, the IMF said economic growth had been steady but too low in per capita terms with inflation remaining high. The Fund predicted that the country's economy would expand at 3.4% this year and 3.2% in 2026.

"The international economic environment that Nigeria lives in and operates in is marked by the very, very large uncertainty, and in particular, international oil price volatility impacts Nigeria directly through the fiscal and the external balances as well as inflation," said Axel Schimmelpfennig, the Fund's mission chief for Nigeria.

The complex outlook made it more important than ever for policymakers to build and maintain buffers while being nimble and ready to respond to shocks or seize opportunities, he said.

Oil prices go down

"Turning to our policy messages, the key challenge now is to tackle high poverty and food insecurity."

Africa's largest oil exporter had assumed a price of $75 per barrel in its 2025 budget. Brent crude futures last traded at just over $68 a barrel.