Significant Uncertainty Characterises Nigeria’s Economy -IMF

An International Monetary Fund (IMF) team, has completed a two-week visit to the country, submitting that the outlook of Nigeria’s economy was market by significant uncertainty.

The visit led by Axel Schimmelpfennig, IMF mission chief for Nigeria, visited Lagos and Abuja was from April 2–15 to hold discussions for the 2025 Article IV Consultations with Nigeria.

A release from the fund stated that the team met with Minister of Finance and Coordinating Minister of the Economy Wale Edun, Minister of Agriculture and Food Security Abubakar Kyari, Central Bank of Nigeria Governor Yemi Cardoso, senior government and central bank officials, the Ministry of the Environment, the private sector, academia, labor unions, and civil society.

Mr. Axel Schimmelpfennig, who issued a statement at the end of the visit, observed that though the Nigerian authorities have taken important steps to stabilise the economy, enhance resilience, and support growth, but that financing of the fiscal deficit by the central bank has ceased.

The report also observed that though costly fuel subsidies were removed, and the functioning of the foreign exchange market has improved, but that 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.

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“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.

“A neutral fiscal stance would support monetary policy to bring down inflation”.

The team however advised that “to safeguard key spending priorities, it is imperative that fiscal savings from the fuel subsidy removal are channeled to the budget.

“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.

“A tight monetary policy stance is required to firmly guide inflation down”, the visiting team said.

According to it, “The Monetary Policy Committee’s data-dependent approach has served Nigeria well and will help navigate elevated macroeconomic uncertainty.

Announcing a disinflation path to serve as an intermediate target can help anchor inflation expectations”, the release, added, informing however that the views of the team does not however mean the views of the fund’s executive board.

IMF, International monetary fund, economic stability,