In an assessment of Nigeria’s economic landscape, the International Monetary Fund (IMF) has sounded the alarm on the country’s challenges, pointing to stalled per-capita growth, soaring poverty rates, and escalating food insecurity as catalysts exacerbating the ongoing cost-of-living crisis.
In a newly released report titled ‘IMF Executive Board Concludes Post Financing Assessment with Nigeria,’ the global lender outlined a grim scenario marked by rising inflation, currency volatility, sluggish economic growth, and widespread business closures.
“Nigeria faces a difficult external environment and wide-ranging domestic challenges,” the report declared, painting a picture of a nation grappling with an array of pressing issues.
Highlighting the dire economic indicators, the IMF underscored that headline inflation had surged to a staggering 27 percent year-on-year in October, with food inflation soaring to an alarming 32 percent. Factors such as the removal of fuel subsidies, currency depreciation, and poor agricultural output were cited as contributing factors to the inflationary pressures besieging the country.
The report emphasized the urgent need for Nigeria to restore macroeconomic stability and foster conditions conducive to sustained, inclusive growth.
Despite the daunting hurdles, the IMF expressed cautious optimism regarding the new administration’s proactive approach in addressing structural deficiencies within the economy. Notably, the report commended recent policy measures undertaken by the government, including the removal of fuel subsidies and the unification of exchange rates, as crucial steps toward reform.
However, concerns loom large over Nigeria’s mounting debt burden, with the country currently owing the IMF a sum of $2.8 billion.
As the Federal Government grapples with the daunting task of servicing its escalating debt, warnings from experts, including professional services firm PricewaterhouseCoopers (PwC), underscore the precarious financial predicament facing the nation. PwC’s latest report cautioned that Nigeria’s escalating debt service costs could have profound implications for its credit rating outlook, borrowing costs, and overall fiscal sustainability.
As Nigeria navigates through these turbulent economic waters, the IMF’s sobering assessment serves as a poignant reminder of the urgent need for decisive action to avert a deepening crisis and pave the way for a more resilient and prosperous future.