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

Published

5 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.

VenturesNow

IMF assessing implications of Senegal financial audit

Published

17 hours ago

October 17, 2024

Ifeoluwa Dada

The International Monetary Fund (IMF) has revealed that a staff team has travelled to Senegal to begin evaluating the ramifications of data adjustments that emerged from a government audit of previous and ongoing initiatives that the IMF had sponsored.

IMF staff will continue to collaborate closely with the authorities in the upcoming weeks to assess the macroeconomic impact and lay out the next measures, the Fund said in a statement, even though the government’s findings have not yet been certified.

Last month, an audit of Senegal’s finances, commissioned by recently elected President Bassirou Diomaye Faye, revealed that the country’s deficit at the end of 2023 was over 10% of GDP, as opposed to the 5% that the previous administration had estimated.

Following the Fund’s evaluation in June, the government announced that it had chosen not to proceed with Senegal’s request for an IMF disbursement in July. Since then, the West African nation has been in talks with the IMF about corrective action.

From October 9 to October 16, an IMF staff team travelled to Senegal to examine the preliminary audit findings.

The next steps “will include assessing whether any misreporting occurred during previous and current IMF-supported programs”, the statement said.

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Namibia central bank drops key rate again to boost growth

Published

17 hours ago

October 17, 2024

Ifeoluwa Dada

The Monetary Policy Committee (MPC) of Namibia’s central bank unanimously decided to cut the repo rate by 25 basis points to 7.25%, the same size of cut as at the August meeting.

The central bank cited the country’s economy’s need for additional support and the unexpectedly rapid decline in inflation as reasons for the second consecutive meeting of its main interest rate cut.

“The MPC noted the growing momentum in the international monetary policy easing cycle, the retreat in domestic inflation over the medium term, along with the recent downside surprise in the September 2024 inflation print,” Bank of Namibia Governor Johannes Gawaxab said in a statement accompanying the decision.

The nation in southern Africa saw its annual inflation decline sharply from 4.4% in August to 3.4% in September.

The central bank’s most recent meeting on Wednesday downgraded the average inflation forecast for this year from 4.7% to 4.3%.

The revision was ascribed to a more optimistic outlook for global oil prices as well as a more robust domestic currency rate.

According to the bank, credit extension to the private sector is still muted, indicating that more assistance for the home economy is necessary.
“The domestic economy, while growing at a moderate pace, was operating below full capacity,” Gawaxab said.

In 2024, growth is expected to drop to 3.1% from 4.2% in 2023.

Regarding a $750 million redemption of Eurobonds that is scheduled for late 2025, Namibia’s governor of the central bank stated that 82% of the $500 million it wishes to retire at maturity has already been put aside.

The government is still hoping to refinance the $250 million that is left! stated Gawaxab.In 2024, growth is expected to drop to 3.1% from 4.2% in 2023.