IMF: “High inflation causing hardship in Nigeria”

The International Monetary Fund (IMF), has said that one of the main causes of suffering for Nigerians is the nation’s high rate of inflation.

This was said in Sandton, South Africa, at a news conference for the World Economic Outlook (WEO) Update for January 2024.

In addition, structural issues like the Central Bank of Nigeria’s (CBN) funding of deficits are contributing to the growing rate of inflation, as highlighted by Daniel Leigh, Division Chief, Research Department, IMF. He went on to say that the nation’s primary objective is bringing down inflation.

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Leigh said: “There were reforms and the currency depreciated, and some of this weakness in the naira has contributed to the increase in inflation. Now there’s also structural factors behind that high inflation, including, you know, on the fiscal side, financing of the deficit. But this is clearly creating hardship.

“The perspective that we have is bringing down inflation is top priority. And the Central Bank has already, and has already raised interest rates significantly over the past year to 18.8 percent. So that is the monetary tightening that is helping in our forecast to bring inflation down from 24.6 percent in 2023 percent, to 23 percent this year, and then closer to single digits into 2025 at 15.5 percent.

“But on top of conquering inflation through monetary tightening, there’s also a need to provide social support through the budget. And creating the space for that is the challenge. Our perspective is that more revenue mobilization, strengthening revenue administration, widening the tax base, this is what is going to bring in space for development spending while safeguarding fiscal sustainability.”