The International Monetary Fund (IMF) has issued a warning about the deteriorating economic situation in Nigeria. The report highlights stagnant growth, widespread poverty, and severe food insecurity as the main factors contributing to a persistent cost-of-living crisis.

In the recently published “Review of Nigeria’s Post Financing Assessment” report, the IMF identifies inadequate revenue collection as a major obstacle. It hinders service delivery and public investment in the country. The IMF report states that inflation continues to rise, with the rate reaching 27% in October 2023 compared to 21.3% in the same month last year. Food inflation is even worse, standing at 32%.

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

The report states that Nigeria is facing a difficult external environment and wide-ranging domestic challenges. External financing is scarce, and global food prices have risen sharply, reflecting the repercussions of conflict and geo-economic fragmentation.

The report states, “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’ options. Against this backdrop, the authorities’ focus on restoring macroeconomic stability and creating conditions for sustained, high, and inclusive growth is appropriate.”