The International Monetary Fund maintained its growth forecast of 3.3% for Nigeria’s economy for 2024, up from 2.9% last year, citing a pick-up in services and trade sectors.
It added that growth outlook was still challenging in Africa’s most populous nation and top oil producer, with food price inflation that reached 40% in March, raising food security concerns.
“If Nigeria grows at 3.3% that is just above the population dynamics, which is a big challenge,” IMF’s Axel Schimmelpfenning told journalists.
Since taking office about a year ago, President Bola Tinubu has embarked on sweeping reforms, including slashing costly petrol and electricity subsidies and devaluing the naira currency twice within a year to narrow the gap between the official and parallel market exchange rates.
Schimmelpfenning, IMF mission chief for Nigeria, said scaling up the government’s cash transfer system and government revenues so that the country has more resources to provide services to its citizens is a key priority.
The Fund forecast that fuel subsidy could cost up to 3% of GDP this year as the increases in pump prices have not kept up with their dollar cost, Schimmelpfennig said, adding that officials remain committed to phasing out fuel subsidy in another one or two years.
