The International Monetary Fund (IMF) has cast doubt on Nigeria’s economic reform efforts, stating in its latest outlook report for sub-Saharan Africa that despite 18 months of broad-based reforms under the current federal government, positive outcomes remain elusive.
While acknowledging progress in several countries such as Côte d’Ivoire, Ghana, and Zambia, the report excluded Nigeria from the list of nations achieving desired results. The average economic growth rate for the region is projected at 3.6% in 2024, but Nigeria’s growth rate is forecasted to lag at 3.19%, below the regional average.
IMF’s Observations:
Presenting the report at the Lagos Business School, IMF Deputy Director Catherine Patillo highlighted that macroeconomic imbalances in the region were easing in some countries, but Nigeria was conspicuously absent from this narrative.
- Inflation Concerns:
Inflation in Nigeria remains stubbornly high, reversing a brief decline earlier in the year. At 33.8%, it is far above the 21% target set for 2024. Analysts predict further inflationary pressure in the coming months. Patillo noted, “Inflation is still in double digits in almost one-third of countries, including Angola, Ethiopia, and Nigeria.” - Exchange Rate and Debt Issues:
While exchange rates are stabilizing across the region, Nigeria continues to grapple with significant local currency depreciation and exchange rate volatility. The IMF flagged Nigeria’s rising debt service burden, with interest payments consuming 15% of total revenue, severely impacting fiscal space for development spending.
Mixed Outlook for the Region:
The IMF report painted a picture of uneven progress, categorizing Nigeria among resource-intensive countries struggling to achieve meaningful growth. Political and social resistance to reforms further complicates Nigeria’s recovery trajectory.
Agricultural Reforms Under Scrutiny:
Amid broader economic challenges, stakeholders in Nigeria’s agricultural sector criticized the government’s reform efforts as insufficient. Despite the Tinubu administration’s focus on addressing food insecurity and agricultural growth, ActionAid Nigeria highlighted persistent barriers such as high input costs, poor access to credit, and insecurity in farming regions.
- Food Security Rankings:
According to the World Bank’s September 2024 Food Security Report, Nigeria ranks as the fifth most food-insecure nation globally and third in Africa. - Recommendations for Improvement:
Stakeholders have urged the government to prioritize smallholder farmers, enhance rural infrastructure, and subsidize organic farming. Jerry Olanrewaju, Team Lead at Jet FarmNG, emphasized the need for actionable frameworks and measurable progress indicators.
Positive Developments:
The All Farmers Association of Nigeria (AFAN) reported some strides in direct access to farm inputs and equipment under the Tinubu administration, though they acknowledged that full implementation of reforms is still pending.
Outlook:
While reforms hold promise, analysts warn that Nigeria must urgently address inflation, exchange rate instability, and structural challenges to realize the potential benefits of its policies. A people-centered approach focusing on long-term sustainability and inclusivity is seen as critical for achieving tangible economic growth.
