IMF Warns of Deepening Economic Crisis in Nigeria, Calls Urgent Need for Reform

The International Monetary Fund (IMF) has raised an alarm, cautioning that Nigeria is facing a worsening economic crisis.

The IMF has raised concerns that Nigeria’s stagnant per-capita growth, widespread poverty, and severe food insecurity have worsened the ongoing cost-of-living crisis in the nation

This information was detailed in the recently published report titled ‘Review of Nigeria’s Post-Financing Assessment by the IMF Executive Board.’

The report highlighted how the inadequate revenue collection has obstructed service delivery and the allocation of resources for public investment

According to the report, the inflation rate for October was 27 percent, compared to the same period last year, with food inflation at 32 percent.

This increase was linked to the removal of fuel subsidies, currency depreciation, and adverse effects on agricultural production within the country.

The report read in part, “Nigeria faces a difficult external environment and wide-ranging domestic challenges. External financing (market and official) is scarce, and global food prices have surged, reflecting the repercussions of conflict and geo-economic fragmentation

“Per-capita growth in Nigeria has stalled, poverty and food insecurity are high, exacerbating the cost-of-living crisis. Low reserves and very limited fiscal space constrain the authorities’ option space. Against this backdrop, the authorities’ focus on restoring macroeconomic stability and creating conditions for sustained, high and inclusive growth is appropriate.”

Amid Nigeria’s ongoing economic challenges, the report noted that on January 12, 2024, the Executive Board of the International Monetary Fund concluded an evaluation of post-financing and promptly approved the Staff Appraisal. It highlighted Nigeria’s ability to repay its debts to the IMF.

Kanyi Daily recalls that the International Monetary Fund (IMF) had announced the approval of debt service relief to 25 countries.