The projection suggests a significant growth trajectory for the country’s economy over the next five years.

In its recently published ‘Post Financing Assessment (PFA)’ report, the IMF emphasized the necessity for Nigeria to restore macroeconomic stability, pointing out that electricity subsidies alone cost the government N375.8 billion between January and September 2023. During the same period, consumers paid a total of N782.6 billion for electricity.

The IMF commended the government’s efforts in implementing reforms but stressed the importance of removing both fuel and electricity subsidies to alleviate fiscal pressure.

The report highlighted Nigeria’s challenging economic environment, characterized by limited external financing, surging global food prices, stalled per capita growth, and high levels of poverty and food insecurity.

While acknowledging the government’s commitment to fiscal consolidation and monetary tightening, the IMF emphasized the need for targeted support for the most vulnerable segments of the population, recommending the phasing out of costly and ineffective fuel and electricity subsidies.

According to the Nigerian Electricity Regulatory Commission (NERC), the government subsidized electricity throughout the first three quarters of 2023, with power distribution companies billing a total of N1.06 trillion during this period.

However, despite significant billing, only N782.6 billion was received, raising concerns about the sustainability of subsidies amidst widespread power outages.

The IMF’s call for subsidy removal aligns with broader efforts to address fiscal vulnerabilities and create conditions for sustained economic growth in Nigeria.

Speaking on Channels Television’s Politics Today program, Akabueze highlighted that Nigeria’s actual economic growth has consistently exceeded IMF’s projections.

The remarks came as Akabueze discussed the economic projections outlined by the government of President Bola Tinubu for 2024.

President Tinubu presented a budget estimate of N27.5 trillion on November 29, 2023, forecasting a 3.76% economic growth and a moderation of inflation to 21.4% in 2024.

This outlook diverged from the IMF’s October prediction, which anticipated a 3.1% growth rate for Nigeria in 2024.

Akabueze emphasized that IMF’s projections should not be considered the ultimate measure of economic growth, asserting that those directly responsible for managing individual economies, like the Nigerian government, are better positioned to make accurate predictions.

Regarding the ambitious targets set by the Tinubu government, Akabueze stated that the projected growth rate in the 2024 budget does not fully reflect the government’s aspirations, as it aims to double the GDP before the end of the first term.

Despite criticisms of the 2024 budget estimates, Akabueze defended the appropriation bill, stating that it addresses the needs of the poor in areas such as healthcare, security, education, and the overall economy.

He acknowledged that the budget might be perceived as “way too small” for Nigeria’s requirements but emphasized the government’s need to align its expenditures with available resources.

The International Monetary Fund (IMF) is an organization of 189 countries, that helps foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and reduce poverty around the world.

The Managing Director of the International Monetary Fund (IMF), Ms. Kristalina Georgieva, in a statement in Washington last night, announced debt service relief for 25 poor countries saying the debt relief was to enable the affected countries to better tackle the COVID-19 pandemic.

The countries that were relieved of the debt include Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

She said, ” Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic. This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts. The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the UK and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”

The Director of the African Department at the IMF, Mr Abebe Selassie, gave the position at a media briefing on the sidelines of the World Bank/IMF Annual Meetings in Washington D.C.

While responding to a question on whether the closure negates the African Continental Free Trade Agreement, AfCFTA, Selassie said although free trade was critical to the economic growth of the continent, it must be legal and in line with agreements.

Selassie said, “On the border closure in Nigeria which has been impacting Benin and Niger, our understanding is that the action reflects concerns about smuggling that has been taking place.“It is about illegal trade, which is not what you want to facilitate.’’

He said the IMF was hoping for a speedy resolution of the issues as the action was already taking a toll on the economies of the country’s neighbours.

“We are very hopeful that discussions will resolve the challenges that this illegal trade is posing. “If the border closure is to be sustained for a long time, it will definitely have an impact on Benin and Niger which, of course, rely quite extensively on the big brother next door,’’ he said.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had earlier said on Wednesday that the borders were closed to curb illegal trading activities by Nigeria’s neighbours.

Source: NAN