The International Monetary Fund (IMF) says Nigeria will
navigate global shocks due to the reforms implemented by President Bola Tinubu.
Axel Schimmelpfennig, IMF mission chief for Nigeria, spoke
during a visit to Lagos and Abuja from April 2 to 15, where he led a delegation
to hold discussions for the 2025 Article IV Consultations with Nigeria.
The team met with Wale Edun, minister of finance and
coordinating minister of the economy; Abubakar Kyari, minister of agriculture
and food security; Yemi Cardoso, governor of the Central Bank of Nigeria (CBN);
ministry of environment and other stakeholders in the private sector, academia,
labour unions, and civil society.
In a statement by the IMF, Schimmelpfennig said authorities
had taken “important steps” to stabilise the economy, enhance resilience, and
support growth.
The steps, he noted, include ending the CBN’s financing of
the fiscal deficit, removing costly petrol subsidy, and improving the
functioning of the foreign exchange market.
“The Nigerian authorities have taken important steps to
stabilise the economy, enhance resilience, and support growth,” Schimmelpfennig
said.
“The financing of the fiscal deficit by the central bank has
ceased, costly fuel subsidies were removed, and the functioning of the foreign
exchange market has improved. Gains have yet to benefit all Nigerians as poverty
and food insecurity remain high.
”The outlook is marked by significant uncertainty. Elevated
global risk sentiment and lower oil prices impact the Nigerian economy.
“The reforms since 2023 have put the Nigerian economy in a
better position to navigate this external environment. Looking ahead,
macroeconomic policies need to further strengthen buffers and resilience, while
creating enabling conditions for private sector-led growth.
“The authorities communicated to the mission that they will
implement the 2025 budget in a manner that is responsive to the decline in
international oil prices.”
‘TIGHT MONETARY POLICY REQUIRED TO CURB INFLATION’
The IMF official also recommended a neutral fiscal stance to
support monetary policy in bringing down inflation.
He added that fiscal savings from petrol subsidy reforms
should be channelled into the national budget to protect critical investments.
Schimmelpfennig further advised that the CBN maintain a
tight monetary policy stance to curb inflation.
“In particular, adjustments should protect critical,
growth-enhancing investment, while accelerating and broadening the delivery of
cash transfers under the World Bank-supported program to provide relief to
those experiencing food insecurity,” he said.
“A tight monetary policy stance is required to firmly guide
inflation down.”
Schimmelpfennig said the monetary policy committee’s
data-dependent approach has served Nigeria well and will help navigate elevated
macroeconomic uncertainty.
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