Nigeria’s ongoing economic reforms have yielded disappointing results, according to the latest report from the International Monetary Fund (IMF), presented at the Lagos Business School on Friday.
Despite over a year of economic adjustments, Nigeria continues to struggle with inflation, currency instability, and unsustainable debt burdens, while other African nations experience more positive outcomes.
The IMF’s Deputy Director, Catherine Patillo, highlighted that while countries like Côte d’Ivoire, Ghana, and Zambia have made significant strides, Nigeria’s economic indicators are cause for concern.
Patillo pointed out that Nigeria’s growth rate of 3.19 percent is below the regional average of 3.6 percent projected for 2024.
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“More than two-thirds of countries have undertaken fiscal consolidation, with a median primary balance expected to narrow by 0.7 percentage points in 2024. Unfortunately, Nigeria has not made comparable progress,” Patillo remarked.
One of the most pressing concerns identified in the report is Nigeria’s persistently high inflation, which surged again after a brief slowdown in mid-2024.
With inflation at 33.8 percent as of October, it is far above the 21 percent target set by the government for the year. Experts predict that inflationary pressures may worsen in the final months of 2024, further straining household budgets.
The IMF also flagged Nigeria’s ongoing struggles with exchange rate stability, an area where the country remains among the worst performers in sub-Saharan Africa.
While other regional economies have seen improvements in foreign exchange stability, Nigeria’s local currency continues to face sharp devaluation, increasing pressure on businesses and consumers alike.
Furthermore, Nigeria’s debt servicing has become a significant fiscal burden, with rising interest payments consuming a substantial portion of government revenue.
The IMF report noted that in countries like Angola, Ghana, Nigeria, and Zambia, interest payments alone are absorbing as much as 15 percent of total revenue, further limiting the resources available for development.
Patillo attributed Nigeria’s poor performance to several structural challenges, including political unrest, public resistance to reforms, and weak communication strategies.
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“Resource-intensive countries like Nigeria continue to grow at about half the rate of other countries in the region, and the challenges facing the country are compounded by social and political issues,” she added.
The IMF has called on Nigeria to rethink its reform approach, urging the government to enhance communication strategies and design reforms that can mobilize greater public support.
“This will require greater attention to reform design, compensatory measures, and rebuilding trust in public institutions,” the report added.
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