Nigeria Experiencing Deepening Economic Crisis – IMF Warns of High Inflation, Food Insecurity

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The International Monetary Fund (IMF) has warned about Nigeria’s worsening economic situation, citing stagnant growth, widespread poverty, and severe food insecurity as key factors fueling a persistent cost-of-living crisis.

In its recently published report, “Review of Nigeria’s Post Financing Assessment,” the IMF cites inadequate revenue collection as a major hurdle, hindering service delivery and public investment. According to the IMF, inflation continues to rise, with the October 2023 rate reaching 27%, compared to 21.3% in the same month last year. Food inflation is even more alarming, standing at 32%.

The report attributes this surge to the removal of fuel subsidies, a depreciating exchange rate, and disruptions to agricultural production.

The report read in part, “Nigeria faces a difficult external environment and wide-ranging domestic challenges. External financing (market and official) is scarce, and global food prices have surged, reflecting the repercussions of conflict and geo-economic fragmentation.

“Per-capita growth in Nigeria has stalled, poverty and food insecurity are high, exacerbating the cost-of-living crisis. Low reserves and very limited fiscal space constrain the authorities’ option space. Against this backdrop, the authorities’ focus on restoring macroeconomic stability and creating conditions for sustained, high and inclusive growth is appropriate.”

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