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Eighteen months after the federal government embarked on extensive economic reforms, the International Monetary Fund’s regional report for sub-Saharan Africa has revealed that the anticipated positive impacts remain out of reach.
The findings suggest that while the reforms are well-intentioned, their implementation and efficacy are still hindered by systemic challenges and regional economic dynamics.
Industry voices in the food sector have criticized the federal government’s reforms, stating that they have done little to address the pressing needs of daily life. These stakeholders argue that the reforms, though significant in scope, lack the practical impact needed to enhance the availability and affordability of basic goods for the average citizen.
In its publication yesterday, the International Monetary Fund identified a small cohort of nations in sub-Saharan Africa that have experienced some success in advancing their economic reforms.
Nigeria, however, did not make the cut. Instead, the report grouped the country with others where reform measures have yet to yield the expected results, signaling ongoing systemic hurdles.
As per the report, sub-Saharan Africa is expected to achieve an average economic growth rate of 3.6 percent in 2024. Nigeria, however, is projected to grow at a slower pace of 3.19 percent, placing it below the regional average and raising questions about the effectiveness of its economic policies.
Presenting the report at the Lagos Business School, LBS, IMF Deputy Director, Catherine Patillo, indicated that macroeconomic imbalances in the region have started reducing with notable improvements in some countries, but she excluded Nigeria in the good news.
She stated: ‘‘More than two-thirds of countries have undertaken fiscal consolidation. With the median primary balance is expected to narrow by 0.7 percentage points alone in 2024. And these have included notable improvements in Cote d’Ivoire, Ghana, and Zambia, among others’’.
Further on the improving macroeconomic situations in the region, Patillo stated: ‘‘On the imbalances side, median inflation has declined in many countries. And it’s already within or below the target band in about half the countries’’.
But contrary to this position, Nigeria’s inflation which had slowed down in July and August returned to uptrend in September 2024 with further rise in October while analysts predict that November and December would sustain the uptrend.
Also at current 33.8 percent, Nigeria’s inflation rate is largely off the 21 percent target for 2024.
The IMF report actually mentioned Nigeria as one of the countries that have been unable to tame inflation.
She stated: ‘‘Inflation is still in double digits in almost one-third of countries, including Angola, Ethiopia, and Nigeria, and above target in almost half of the region, particularly where monetary policy is not anchored by exchange rate pegs’’.
Patillo further said that exchange rate was improving across most countries in the region. She stated: ‘‘Looking further at exchange rates, we do see that foreign exchange pressures have largely abated since the end of 2023’’.
But Nigeria has recorded the worse exchange rate instability and local currency depreciation so far this year.
The IMF report also highlighted the impact of debt burden on fiscal stability listing Nigeria amongst the suffering countries.