The International Monetary Fund (IMF) has released its latest outlook report for sub-Saharan Africa, providing a mixed review of the region’s economic reforms. For Nigeria, the report paints a challenging picture, indicating that the ambitious reform agenda initiated by the Federal Government 18 months ago has yet to yield substantial positive impacts.
Nigeria Lagging Behind in Economic GrowthThe report highlights that the region’s average economic growth rate for 2024 is projected at 3.6%, but Nigeria’s growth is forecast at 3.19%, below this regional average. While some countries in sub-Saharan Africa, such as Côte d’Ivoire, Ghana, and Zambia, have made notable strides in fiscal consolidation, Nigeria remains excluded from these success stories.
Catherine Patillo, IMF Deputy Director, presented the report at the Lagos Business School, stating that macroeconomic imbalances are gradually easing in some countries. However, she noted Nigeria as one of the nations still grappling with challenges like high inflation and exchange rate instability.
Persistent Inflationary Pressures
Inflation in Nigeria, which briefly slowed in July and August 2024, resumed its upward trend in September and October. Currently standing at 33.8%, Nigeria’s inflation rate far exceeds the 21% target set for 2024. The report lists Nigeria among countries unable to control inflation, alongside Angola and Ethiopia.
Patillo remarked that inflation in many sub-Saharan countries has declined, with half now within their target ranges. Unfortunately, Nigeria remains an exception, where monetary policy struggles to stabilize inflation due to a lack of exchange rate anchoring mechanisms.
Exchange Rate and Debt Burden Concerns
Exchange rate pressures have eased across much of the region, but Nigeria continues to face significant currency depreciation. The country also faces a severe debt burden, with interest payments consuming a large share of government revenues. According to the report, Nigeria is among the nations where rising debt service obligations hinder development spending, with interest payments absorbing 15% of total revenue.
Social and Political Resistance to Reforms
The IMF report notes that resource-intensive countries like Nigeria are growing at half the rate of the rest of the region, with oil exporters facing the greatest difficulties. It highlights social and political resistance as major obstacles to reform implementation in Nigeria, alongside tight domestic and external financing conditions.
Despite the challenges, the IMF encourages Nigeria to rethink its reform strategies. It recommends greater focus on building coalitions with key stakeholders and engaging the public to foster trust in institutions and mobilize support for reforms.
Stakeholders Criticize Agricultural ReformsIn the agricultural sector, stakeholders have expressed dissatisfaction with the Federal Government’s reform policies, calling for a more holistic approach.
Reforms Are Desirable but Poorly Implemented
The National President of the All Farmers Association of Nigeria (AFAN), Arc. Ibrahim Kabir, acknowledged the importance of reforms but criticized their slow and inconsistent implementation. He urged the government to adopt mechanisms that minimize the burden on farmers, emphasizing that agricultural reforms often take time to yield tangible results.
Reforms Fail to Tackle Food Insecurity
ActionAid Nigeria’s Country Director, Andrew Mamedu, argued that despite declaring a state of emergency on food production, the Tinubu administration has failed to significantly impact food security. He cited Nigeria’s ranking as the fifth most food-insecure country globally in 2024, according to the World Bank.
Mamedu emphasized the need for reforms to address key challenges such as high input costs, insecurity, and poor access to credit for farmers. He also called for subsidizing organic agriculture and investing in climate-resilient practices to ensure affordable food for all Nigerians.
Implementation Remains Aspirational
Jerry Olanrewaju, Team Lead at Jet FarmNG, described the reforms as largely aspirational, lacking concrete implementation. He noted that while strategic policies like the National Agricultural Technology and Innovation Policy (NATIP) show potential, they require adequate funding and streamlined processes to succeed.
Progress Seen in Direct Input Distribution
Hon. Nkechi Okafor, Chairman of AFAN’s Federal Capital Territory Chapter, commended the government’s efforts to provide direct access to agricultural inputs for farmers. She highlighted recent initiatives, such as dry-season farming, as promising steps toward achieving food security.
Recommendations and Expectations
Stakeholders across the agricultural sector outlined several recommendations for improving reform outcomes:
1. Increased Funding and Strategic Subsidies: Stakeholders advocate for targeted subsidies on fertilizers, irrigation, and mechanization to enhance productivity and affordability.
2. Focus on Smallholder Farmers: Policies should prioritize empowering small-scale farmers who are critical to the food supply chain.
3. Improved Infrastructure and Rural Development: Investment in transportation, storage facilities, and extension services is essential to reduce post-harvest losses.
4. Climate-Resilient Practices: Developing and promoting climate-smart agriculture is crucial to mitigate the impact of climate change on farming.
5. Enhanced Security: Addressing insecurity in farming regions is necessary to create a conducive environment for agricultural activities.
Stakeholders remain hopeful that with proper implementation, the reforms could drive sustainable growth and food security, but they stress the urgency of translating policy aspirations into tangible results.
