The International Monetary Fund (IMF) has raised concerns over President Bola Tinubu’s economic reforms, asserting that the measures implemented have not yielded the intended positive outcomes.
In its latest outlook report for Sub-Saharan Africa, the IMF pointed out that the economic strategies embarked upon by the Tinubu administration have yet to show tangible results, 18 months after their commencement.
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The global financial body also highlighted the increasing hardship faced by Nigerians, with rising poverty levels being a significant concern.
Nigeria Falls Short in Regional Economic Performance
The IMF report, unveiled at the Lagos Business School by Deputy Director Catherine Patillo, painted a bleak picture for Nigeria, contrasting it with other African nations showing signs of economic recovery.
While the average economic growth rate for the region is projected to hold at 3.6% for the entire 2024, Nigeria lags behind at 3.19%. Patillo noted that macroeconomic imbalances have improved in several countries, yet Nigeria was notably absent from the list of success stories.
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Patillo remarked, “We have seen significant fiscal consolidation in many countries, with improvements in Cote d’Ivoire, Ghana, and Zambia. However, Nigeria’s macroeconomic situation remains precarious, with rising inflation and persistent currency instability.”
Inflation and Exchange Rate Woes Persist
While inflation rates in several African nations have stabilized, Nigeria’s inflation surged to 33.8% in October 2024, well above the government’s 21% target. The IMF noted that Nigeria remains among countries struggling to contain inflation, alongside Angola and Ethiopia.
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Patillo emphasized, “In many countries, inflation is now within or below target ranges, but Nigeria continues to grapple with double-digit inflation due to unanchored monetary policies.”
The IMF also highlighted the severe depreciation of the Nigerian naira, exacerbating the country’s exchange rate instability. Patillo added, “Foreign exchange pressures have eased across much of the region, yet Nigeria’s currency has faced unprecedented depreciation this year.”
Rising Debt Poses Threat to Fiscal Stability
Another critical point in the IMF’s assessment is Nigeria’s escalating debt burden, which has strained fiscal stability. The report noted that Nigeria is among countries where debt servicing consumes a significant portion of revenues, limiting the government’s capacity for development spending. The IMF stated, “Interest payments now exceed 20% of revenues in nearly one-quarter of Sub-Saharan countries, including Nigeria, which has seen a dramatic rise in debt service costs.”
Social and Political Challenges Impede Reforms
The outlook report painted a mixed picture for the region, warning that Nigeria’s resource-heavy economy remains vulnerable. The IMF highlighted that domestic and external financing conditions are tight, while social and political resistance further complicates policy adjustments. The report emphasized, “Political and social pressures make it increasingly difficult to implement necessary reforms in countries like Nigeria.”
The IMF report singled out countries like Ghana and Botswana for making strides in restoring macroeconomic stability, while Nigeria was categorized among those experiencing “adjustment fatigue.” It recommended a strategic shift, urging Nigerian leaders to focus on building public trust and creating coalitions for pro-growth reforms.
Food Sector Stakeholders Decry Ineffective Reforms
In the food sector, key stakeholders have expressed dissatisfaction with the federal government’s agricultural policies, rating them as largely ineffective. The National President of the All Farmers Association of Nigeria (AFAN), Arc Ibrahim Kabir, noted that while the reforms are desirable, the implementation mechanisms are flawed. He stated, “The agricultural reforms introduced are promising, but without proper implementation strategies, their impact remains minimal.”
Andrew Mamedu, Country Director of ActionAid Nigeria, echoed similar sentiments, highlighting Nigeria’s food insecurity crisis. He remarked, “Despite the state of emergency declared on food production, Nigeria still ranks among the most food-insecure countries in 2024. High input costs, poor access to credit, and insecurity in farming regions continue to hinder progress.”
Call for Comprehensive Policy Implementation
Food sector experts, including the Team Lead of Jet FarmNG, Jerry Olanrewaju, have urged the government to streamline policy frameworks and focus on actionable strategies. Olanrewaju pointed out, “The current administration’s statements on agriculture are yet to be backed by a robust implementation framework. The duplication of policies has further complicated progress, making it imperative to focus on executing existing policies effectively.”
Stakeholders called for increased budgetary allocations to agriculture and targeted subsidies to support smallholder farmers. Mamedu emphasized, “The government must prioritize climate-resilient practices and invest in rural infrastructure to boost agricultural output and enhance food security.”
Outlook: IMF Recommendations and Stakeholder Hopes
The IMF report recommended a holistic approach to reform implementation, stressing the need for improved communication and stakeholder engagement. It stated, “To mobilize support for deep reforms, the Nigerian government must rebuild public trust and adopt compensatory measures that address the needs of vulnerable populations.”
The food sector stakeholders expressed cautious optimism, urging the federal government to adopt best practices from leading global economies. They advocated for strategic subsidies, improved access to credit, and enhanced infrastructure to support farmers and drive sustainable growth
