The International Monetary Fund has urged the Nigerian government to urgently address the food insecurity ravaging the country.
The charge is contained in a report issued by the IMF after its team visited Lagos and Abuja from February 12 to 23, 2024, to hold discussions for the 2024 Article IV Consultations with Nigeria.
The team led by IMF Mission Chief for Nigeria, Axel Schimmelpfennig, also said the decision by the Monetary Policy Committee of the Central Bank of Nigeria to further tighten monetary policy will help contain inflation and pressures on the naira.
The report, however, noted that President Bola Tinubu’s government inherited a difficult economic situation marked by low growth, low revenue collection, accelerating inflation, and external imbalances built up over the years.
The IMF team met with Minister of Finance, Olayemi Edun; CBN Governor, Olayemi Cardoso, senior government and central bank officials, the Ministry of Agriculture, the Ministry of the Environment, as well as representatives from sub-nationals, the private sector and civil society.
Addressing the media on the team’s findings at the end of the visit, Schimmelpfennig said, “Nigeria’s economic outlook is challenging. Stressing that the “Economic growth strengthened in the fourth quarter, with GDP growth reaching 2.8 percent in 2023. This falls slightly short of population growth dynamics. Improved oil production and an expected better harvest in the second half of the year are positive for 2024 GDP growth, which is projected to reach 3.2 percent, although high inflation, naira weakness, and policy tightening will provide headwinds.
“With about 8 percent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority. In this regard, staff welcomed the authorities’ approval of an effective and well-targeted social protection system. The team also welcomed the government’s release of grains, seeds, and fertilizers, as well as Nigeria’s introduction of dry-season farming.
“Recent improvements in revenue collection and oil production are encouraging. Nigeria’s low revenue mobilization constrains the government’s ability to respond to shocks and promote long-term development. Non-oil revenue collection improved by 0.8 percent of GDP in 2023, helped by naira depreciation. Oil production reached 1.65 million barrels per day in January as a result of enhanced security. The capping of fuel pump prices and electricity tariffs below cost recovery could have a fiscal cost of up to 3 percent of GDP in 2024.
