Stalled per-capita growth, poverty, high food insecurity have increased cost-of-living crisis in Nigeria, a International Monetary Fund IMF report has said.
In a new report titled ‘IMF Executive Board Concludes Post Financing Assessment with Nigeria’, IMF said low revenue collection has hampered the provision of services and public investment.
The report noted that Nigeria’s headline inflation reached 27 percent year-on-year in October (food inflation 32 per cent), reflecting the effects of fuel subsidy removal, exchange rate depreciation, and poor agricultural production in 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.”
The report also noted that on January 12, 2024, the Executive Board of the International Monetary Fund concluded the Post Financing Assessment and endorsed the Staff Appraisal on a lapse-of-time basis. It added that Nigeria’s capacity to repay the IMF is adequate.
The global lender also expressed optimism that the current administration made a strong start, tackling deep-rooted structural issues in challenging circumstances.
The report added:
“The new CBN team has made price stability its core mandate and demonstrated this resolve by dropping its previous role in development finance. On the fiscal side, the authorities are developing an ambitious domestic revenue mobilisation agenda.”
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