The International Monetary Fund, IMF has observed that poverty has increased in Nigeria with rising food insecurity.
The IMF which made the observation in country report No: 2024102 said the government led by President Bola Tinubu is constrained by low domestic revenue mobilisation.
It added that governance problems remain pervasive and that the external environment, viz cost of financing remains difficult , high oil and gas prices notwithstanding.
It said the new government is however on the right path to economic growth through ambitious reforms.
“Nigeria, under its new administration, has set out on an ambitious reform path to restore macroeconomic stability and support inclusive growth. The authorities reformed the fuel price subsidies, unified official foreign exchange windows, and are focused on revenue mobilization, governance, and enhancing the monetary and exchange rate policy frameworks, as well as strengthening social safety nets”, the IMF said.
It added that over the last decade, limited reforms, security challenges, weak growth and now high inflation worsened poverty and food insecurity.
“While Nigeria swiftly exited the Covid-19 recession, per-capita income has stagnated. Real GDP growth slowed to 2.9 percent in 2023, with weak agriculture and trade, and despite the improvement in oil production and financial services. Growth is projected at 3.3 percent for 2024 as both oil and agriculture outputs are expected to improve with better security”, the IMF report said, adding that the financial sector has remained stable, despite heightened risks.
“Determined and well-sequenced implementation of the authorities’ policy intentions would pave the way for faster, more inclusive, resilient growth”, it said, noting that Inflation reached 32 percent year-on-year in February 2024, driven mainly by food price inflation (38 percent) and loose financial conditions.
“With continued monetary tightening, inflation is projected to gradually decline to 24 percent year-on-year at end-2024. The fiscal position strengthened in 2023. Revenues benefited from naira depreciation and enhanced revenue administration, while expenditure rationalization and restraint allowed for a one-off wage increase to mitigate the impact of high inflation for public officials”.
