The International Monetary Fund, IMF, latest report has revealed that the President Bola Ahmed Tinubu’s economic reforms are not working.
This is even as the IMF’s economic outlook for sub-Saharan Africa has indicated that Nigeria’s ongoing economic reforms are struggling to deliver meaningful results.
This was contained in a report presented on Friday at the Lagos Business School (LBS) by IMF Deputy Director Catherine Patillo.
Speaking at the event, Patillo highlighted a mixed performance of economic reforms across the West African region. He, however, reported some notable successes in countries such as Côte d’Ivoire, Ghana, and Zambia. With Nigeria, conspicuously missing from the list of success reform stories.
According to the report, sub-Saharan Africa’s average economic growth rate is projected to remain at 3.6 per cent for 2024. With Nigeria’s growth rate, pegged at 3.19 per cent.
Patillo also noted that while macroeconomic imbalances have reduced in several countries, Nigeria has yet to show similar progress.
He said, “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’’.
Recall that Nigeria’s inflation rate, slowed briefly in July and August. It, however, resumed its upward trend in September, rising further in October. At 33.8 per cent, it significantly exceeds the 21 per cent target set for 2024. This is even as analysts are predicting further increases in November and December.
According to Vanguard, the report also flagged Nigeria’s struggles with exchange rate stability. Highlighting it as one of the worst-performing nations in this regard.
“While other countries in the region are experiencing reduced foreign exchange pressures, Nigeria’s local currency depreciation and instability remain a concern,” Vanguard reported.
According to the report, Nigeria ranked among countries suffering the heaviest fiscal burden. The IMF noted that rising debt service obligations are consuming substantial portions of Nigerian revenue. Thus, limiting resources available for development.
It stated, “In Angola, Ghana, Nigeria, and Zambia, this increase in interest payments alone absorbed a massive 15 per cent of total revenue.”
While the IMF painted a mixed outlook for the sub-Saharan near future, it grouped Nigeria among resource-intensive countries. Struggling with social and political challenges that hinder reform implementation. Political unrest, public dissatisfaction, and tight financing conditions were identified as major impediments.
The Fund noted that “Resource-intensive countries continue to grow at about half the rate of the rest of the region. With oil exporters struggling the most.”
It further noted that adjustment fatigue, public resistance, and weak communication strategies are undermining the impact of reforms in Nigeria.
As a way out for Nigeria, the IMF recommended rethinking reform strategies. It, therefore, urged countries like Nigeria to adopt measures that mobilize public support for deep structural changes.
IMF maintained that “This will require greater attention to communication and engagement strategies. Reform design, compensatory measures, and rebuilding trust in public institutions.”
source: Nigerian Tribune
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