IMF Keeps Nigeria’s Growth Forecast at 3.3% for 2024

The International Monetary Fund (IMF) has maintained its growth forecast of 3.3% for Nigeria’s economy for 2024, up from 2.9% last year. The IMF cited a pick up in services and trade sectors as contributing factors to the growth outlook. However, the IMF also highlighted the challenging nature of Nigeria’s economic situation, with food price inflation reaching 40% in March, raising concerns about food security in the country.

IMF mission chief for Nigeria, Axel Schimmelpfenning, emphasized the importance of sustainable growth that exceeds population dynamics in order to address the challenges facing the nation. President Bola Tinubu’s sweeping reforms, including subsidy cuts and currency devaluation, have been instrumental in driving economic progress.

Fuel subsidies, which could cost up to 3% of GDP this year, remain a concern for the IMF. However, officials are committed to phasing them out in the coming years. Global ratings agencies have revised Nigeria’s economic outlook upwards, with Fitch recently upgrading the country’s outlook to positive.

Schimmelpfenning highlighted the importance of scaling up cash transfer programs and boosting government revenues to improve living standards for Nigerians. The IMF also praised the Central Bank of Nigeria’s recent interest rate hikes to combat inflation, calling for a data-driven approach to further rate adjustments.

Overall, the IMF urged the CBN to focus on building foreign exchange reserves and implementing transparent forex intervention frameworks to address short-term volatility. Despite the progress made, Schimmelpfenning emphasized that resolving Nigeria’s economic challenges will take time and sustained effort.