Nigeria continues to actively engage with the global debt market, despite facing challenges from rising borrowing costs, according to the International Monetary Fund (IMF).
During a press conference at the IMF/World Bank annual meetings in Washington, D.C., Tobias Adrian, the IMF’s Financial Counsellor and Director of Monetary and Capital Markets, highlighted that Nigeria and other frontier markets have sustained notable activity in the debt sector throughout 2024.
He acknowledged that while financing has become more expensive compared to levels before 2021, the overall issuance remains encouraging.
The IMF expressed its support for Nigeria's recent monetary policy initiatives, particularly the Central Bank of Nigeria's (CBN) interest rate hikes and foreign exchange reforms aimed at stabilizing the economy.
Adrian emphasized that the CBN's transition to an inflation-targeting framework and its efforts to liberalize the exchange rate are vital for tackling inflation, which is currently close to 30 percent.
He pointed out that these reforms are particularly crucial in light of recent natural disasters, such as floods, which have exacerbated living conditions for many Nigerians.
In its latest World Economic Outlook report, the IMF revised its economic forecast for Nigeria, projecting a growth rate of 2.9 percent for 2024, unchanged from 2023.
The IMF attributed this adjustment to slower-than-expected economic activity in the first half of the year, with disruptions in agriculture and oil production cited as significant factors behind this revised outlook.
The Deputy Chief of the IMF’s Research Department, Jean-Marc Natal, elaborated on these growth challenges, noting that flooding has disrupted agricultural output while security issues have hindered oil production. Despite these setbacks, the IMF forecasts a modest increase in growth to 3.2 percent by 2025.
