The International Monetary Fund (IMF) has raised concerns about the effectiveness of Nigeria’s ongoing economic reforms under President Bola Tinubu.
In its latest report on the economic outlook for sub-Saharan Africa, the IMF advised President Tinubu to rethink his approach to the ongoing reforms, recommending improvement in communication, offering of what it called “compensatory measures” to ease the impact of reforms, and designing of policies that would address public concerns.
“This will require greater attention to communication and engagement strategies, reform design, compensatory measures, and rebuilding trust in public institutions,” the report advised.
IMF is not happy with the achievements of the reforms after President Tinubu’s 18 months in office.
The IMF, presented yesterday, November 15 at the Lagos Business School by Catherine Patillo, IMF Deputy Director, highlighted successes in countries such as Côte d’Ivoire, Ghana, and Zambia, but Nigeria was conspicuously absent from the list of nations demonstrating positive outcomes from reform efforts.
The report projected an average economic growth rate of 3.6% for sub-Saharan Africa in 2024, even as Nigeria’s growth rate is expected to lag at 3.19%, placing the country below the regional average.
The IMF noted that while many African nations are reducing macroeconomic imbalances, Nigeria remains an outlier in its struggle to stabilize its economy.
Inflation remains a pressing issue in Nigeria. Although there was a brief slowdown in July and August, inflation resumed its climb in September and October, reaching 33.8%. This figure is far above the 21% target set for 2024, and analysts expect further increases before the year ends.
The IMF described Nigeria’s exchange rate instability as a significant challenge, adding that this is unlike other nations in the region that have reduced foreign exchange pressures.
Another major issue highlighted in the report is Nigeria’s heavy debt servicing burden.
The IMF said that Nigeria, alongside Angola, Ghana, and Zambia, spends an alarming 15% of total revenue on interest payments. This high level of debt servicing limits the country’s ability to invest in critical areas such as infrastructure and social programs.
