Nigeria’s reforms not working — IMF report

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by Adam Mosadioluwa

The latest International Monetary Fund (IMF) report on the economic outlook for sub-Saharan Africa has indicated that Nigeria’s ongoing economic reforms are struggling to deliver meaningful results, even 18 months after their implementation.

The report, presented on Friday at the Lagos Business School (LBS) by IMF Deputy Director Catherine Patillo, highlighted a mixed performance of economic reforms across the region, with notable successes in countries such as Côte d’Ivoire, Ghana, and Zambia. However, Nigeria was conspicuously absent from the list of success stories.

According to the report, sub-Saharan Africa’s average economic growth rate is projected to remain at 3.6 per cent for 2024, but Nigeria’s growth rate, pegged at 3.19 per cent, falls below this average. 

Patillo noted that while macroeconomic imbalances have reduced in several countries, Nigeria has yet to show similar progress.

“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’’.

In contrast, Nigeria’s inflation rate, which slowed briefly in July and August, 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, with analysts 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.

Debt servicing was another area of scrutiny, with Nigeria ranked among countries suffering the heaviest fiscal burden. The IMF noted that rising debt service obligations are consuming substantial portions of revenue, limiting resources available for development.

“In Angola, Ghana, Nigeria, and Zambia, this increase in interest payments alone absorbed a massive 15 per cent of total revenue,” the report stated.

The IMF painted a mixed outlook for the region’s near future but 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.

“Resource-intensive countries continue to grow at about half the rate of the rest of the region, with oil exporters struggling the most,” the report stated. It further noted that adjustment fatigue, public resistance, and weak communication strategies are undermining the impact of reforms in Nigeria.

The IMF recommended rethinking reform strategies, urging countries like Nigeria to adopt measures that mobilise public support for deep structural changes. 

“This will require greater attention to communication and engagement strategies, reform design, compensatory measures, and rebuilding trust in public institutions,” the report advised.