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IMF reviews Nigeria’s 2023 economic growth projection downwards

Published

1 year ago

October 11, 2023

Multilateral body, the International Monetary Fund (IMF) has predicted that Nigeria’s growing inflation rate will affect its economic growth, limiting it to 2.9 per cent in 2023.

The country’s economic growth prospects were also lowered by the IMF by 0.3 percentage points to 2.9% for 2023 due to lower oil and gas production.

This information was provided by the global lender in its recently issued World Economic Outlook (for October) titled, “Navigating Global Divergences.” The lender had predicted that Nigeria’s economy would expand by 3.2% in 2023 earlier in July. Then, it forecasted that security concerns in the oil industry would have an impact on the nation’s economy.

The Washington-based lender commented on its updated forecast for the nation, saying, “Growth in Nigeria is predicted to decrease from 3.3% in 2022 to 2.9% in 2023 and 3.1 per cent in 2024, with negative consequences of rising inflation on consumption taking hold.

The IMF highlighted that due to worsening weather shocks, the global slowdown, and internal supply constraints, growth in the sub-Saharan African region was predicted to fall to 3.3% in 2023. Although this growth would accelerate up to 4.0% in 2024, it would still be below the region’s historical average of 4.8%, according to the report.

Overall, global economic growth is projected to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024, well below the historical (2000–19) average of 3.8 per cent, the IMF declared.

It added, “Advanced economies are expected to slow from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024.”

Daniel Leigh, the head of the World Economic Studies division in the IMF’s Research Department, also claimed during the ongoing IMF/World Bank annual meeting in Marrakech, just 45 miles (72 km) from the site of the 6.8-magnitude earthquake, that the recent government-led demonetisation move, high inflation, and other factors were to blame for Nigeria’s negative assessment.

Leigh, who heads the department that produces the World Economic Outlook, said, “There is a downward revision for this year, partially this is due to the demonetisation, high inflation, shocks to agriculture and hydrocarbon output that is coming on top of the external headwinds.

“I will also add that President Tinubu has moved quickly with important reforms including ending the fuel subsidy and unifying the exchange rates. We welcome these initial bold reforms because we see them as paving the way for strong and inclusive growth.”

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 day ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.