VenturesNow

Nigeria’s growth forecast for 2024 remains 3.3%— IMF

Published

8 months ago

May 10, 2024

The International Monetary Fund (IMF) has upheld its projection of a 3.3% growth rate for Nigeria’s economy in 2024, an increase from the 2.9% recorded in the previous year. This prognosis is based on the improvement observed in the services and commerce industries.

According to the IMF, the economic prospects in Africa’s most populous country and leading oil producer remain difficult, with a 40% increase in food price inflation in March, which has raised concerns about food security.

“If Nigeria grows at 3.3% that is just above the population dynamics, which is a big challenge,” IMF mission chief for Nigeria, Axel Schimmelpfenning, told journalists.

President Bola Tinubu has implemented extensive reforms since assuming office around one year ago. These measures include reducing expensive petrol and power subsidies and depreciating the naira currency twice within a year to decrease the difference between the official and secondary market exchange rates.

According to the Fund’s projection, fuel subsidies could amount to 3% of GDP this year since the rise in pump prices has not matched their dollar cost. Schimmelpfennig stated that policymakers are determined to gradually eliminate these subsidies within the next one or two years.

“The reforms are focused on how to raise that growth so that Nigerians can see real impacts on their living standards,” Schimmelpfenning said.
Global ratings agencies have reviewed Nigeria’s economic outlook upwards due to the impact of reforms, with Fitch the latest to revise Nigeria’s outlook to positive from stable on May 3.

“We think a lot has happened. We also have to recognise that the problems built up over many years were quite severe. We can’t expect that everything is going to be resolved overnight,” he added.

Schimmelpfenning emphasized the importance of expanding a cash transfer program and increasing government income to enhance the country’s capacity to deliver services to its population.

The IMF commended the Central Bank of Nigeria (CBN) for its recent implementation of interest rate hikes as a means to control rapidly increasing inflation. The IMF also emphasized the importance of using data-driven methods to further tighten interest rates.

The International Monetary Fund (IMF) has advised the Central Bank of Nigeria (CBN) to increase its foreign exchange reserves. Additionally, the IMF has suggested that the CBN should establish a clear and fair framework for foreign exchange interventions, with the primary goal of mitigating excessive short-term fluctuations in the market.

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IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

2 days ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

2 days ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.