- IMF projects slower economic growth for Nigeria in 2024
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has called on the International Monetary Fund and the World Bank to offer concessional loans to assist Nigeria and other nations carrying out economic reforms.
Edun issued this plea at a press conference during the G-24 leaders’ meeting at the ongoing IMF/World Bank annual meetings in Washington, D.C.
He emphasized the economic difficulties that African countries are encountering, pointing out that global trade is moving towards protectionism, which hinders opportunities for emerging nations.
The minister highlighted that these obstacles to trade impede attempts to draw in investment, generate employment, and alleviate poverty.
Although he recognized the benefits of current trade programs like AGOA in aiding entry into the U.S. market, he emphasized the need for a fairer global financial system that provides subsidized funding to developing economies.
Edun explained that international financial institutions frequently require the implementation of reforms that enhance macroeconomic stability as a condition for their support.
He stressed that while these reforms may be advantageous in the future, they can also bring about immediate expenses.
He also emphasized the significance of efficient communication, pointing out that it is crucial for the public to be informed about the goals, schedule, and potential results of these changes.
He stated that a crucial element of macroeconomic changes is openness, informing individuals about the actions taken, the anticipated outcomes, and the timeline.
Edun reiterated Nigeria’s dedication to the Paris Agreement in terms of climate change but highlighted the need for the country to find a compromise between environmental objectives and economic growth.
“For countries like Nigeria, we must take a realistic approach to climate action. Our hydrocarbon resources are essential for economic growth and industrialization, even as we remain committed to the global fight against climate change,” he explained.
Edun concluded by reiterating Nigeria’s call for better access to concessional funding, which would enable countries pursuing difficult but necessary reforms to sustain their economies while safeguarding the welfare of their citizens.
IMF projects slower economic growth for Nigeria in 2024
Meanwhile, the IMF has revised its economic forecast for Nigeria, projecting a slowdown in the country’s growth for 2024.
According to the latest World Economic Outlook report released on Tuesday, Nigeria’s economy is now expected to grow at 2.9 per cent in 2024, maintaining the same growth pace recorded in 2023.
The latest projection is a 0.2 percent decrease from the previous projection in July and a 0.4 per cent decrease from the previous projection in April.
This adjustment reflects the IMF’s cautious stance on the challenges facing emerging markets, including Nigeria.
The international lender said, “The revision reflects slower growth in Nigeria, amid weaker-than-expected activity in the first half of the year.”
However, the IMF also noted that the projected growth for 2025 stands at 3.2 per cent, which is 0.2 per cent higher than the projections made in July and April this year.
The IMF’s projection is much lower than that of the World Bank for 2024 and 2025.
In the latest edition of Africa’s Pulse, a recent report by the World Bank, it was projected that Nigeria’s gross domestic product will expand by 3.3 per cent in 2024 and slightly accelerate to 3.6 per cent in 2025-2026.
The report read, “Economic growth in Nigeria is projected at 3.3 per cent in 2024 and 3.6 per cent in 2025–26 as macroeconomic and fiscal reforms gradually start yielding results. Inflation peaked in June 2024 (at 34.2 per cent year-on-year) and decelerated to 33.4 per cent in July and further to 32.2 per cent in August.”
However, for the IMF, Nigeria’s inflation is projected to drop from an average of 32.55 per cent in 2024 to 25 per cent by 2025.
During a press conference unveiling the World Economic Outlook at the ongoing IMF/World Bank annual meetings in Washington, D.C., the IMF urged countries facing high inflation, including Nigeria, to adopt tighter monetary policies to stabilise their economies.
Pierre-Olivier Gourinchas, the IMF’s economic counsellor and director of research, stressed the need to balance monetary and fiscal policies in order to tackle inflation and debt challenges.
He said, “In countries where inflation is very high, we recommend a tight monetary policy stance. In some cases, when possible, fiscal consolidation can help, though this is complicated by trade-offs many nations face.”
