Connect with us


12 Highlights from  IMF Article IV Consultation with Nigeria



IMF Article IV Consultation with Nigeria

 By FBNQuest Research

Last week, the International Monetary Fund (IMF) published its recent 2024 Article IV consultation with Nigeria.

The IMF’s report provides insights on several macroeconomic and social developments and offers policy recommendations.

On economic growth expectations, the Fund sees GDP growth improving to 3.3% in 2024, up from 2.9% in 2023.

The higher growth projection is primarily attributed to expected oil and agricultural production expansions from improved security and favourable weather conditions.


  1. The IMF’s growth forecast of 3.3% broadly matches the World Bank’s projections but is slightly lower than the CBN’s growth estimates of 3.4%.
  2. While the Fund sees oil GDP rising to 5.6% in 2024, from -2.2% in 2023, it expects non-oil GDP to grow by 3.2% in 2024, the same as in 2023.
  3. The Fund noted the sustained inflationary pressures in the country, which were driven by low productivity in the agricultural sector, higher transportation costs, and pass-through effects from the Naira devaluation.
  4. The Fund commended the CBN’s policy tightening measures and urged the monetary authority, based on incoming economic data, to further tighten monetary conditions to anchor elevated inflationary expectations.
  5. It recommended that the central bank continue mopping up excess liquidity through open market operations (OMO) and CRR debits.
  6. It called on the CBN to reduce the growing threats to the financial system’s stability by strengthening bank capitalisation and subjecting financial institutions to stricter regulations.
  7. The Fund also believes that improving the domestic securities and foreign exchange market operation would improve the monetary transmission mechanism and attract capital inflows into the economy.
  8. It further recommended that the government sustain its efforts to lower oil theft, remove bottlenecks around border procedures, promote agricultural output, and accelerate climate adaptation measures.
  9. On fiscal deficit, the Fund forecasts a higher fiscal deficit of 4.5% of GDP compared to the projected 2024 budget deficit of 3.4%.
  10. The Fund attributed the large government’s fiscal deficit to reduced gains from projected oil and gas revenues, increased electricity and fuel subsidies, and higher borrowing costs.
  11. The Fund warned that FGN’s plan to issue domestic foreign exchange (FX) securities to inject onshore dollar liquidity into the official market could potentially cause market fragmentation, raise the price of naira securities, and put further pressure on the naira.
  12. It highlighted various risks to Nigeria’s economic growth, such as worsening food insecurity, persistent depreciation of the naira, reduced production output, renewed geopolitical uncertainties, and policy reversals.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You have not selected any currencies to display