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Thursday, June 13, 2024

Nigeria Experiencing Worsening Economic Crises

The International Monetary Fund (IMF) highlighted low revenue collection affecting service provision and public investment.

Notably, inflation hit 27% in October, with fuel subsidy removal, currency depreciation, and poor agricultural production being contributing factors.The IMF acknowledged Nigeria’s tough external environment and domestic issues, emphasizing the need for macroeconomic stability.

Despite the challenges, the IMF expressed optimism about the new administration’s efforts, particularly in addressing structural problems. Notable policy reforms include fuel subsidy removal and unifying official exchange rates.

The report also touched on Nigeria’s debt situation, with the country owing the IMF $2.8bn. PricewaterhouseCoopers warned that rising debt service costs might impact credit ratings and borrowing costs.

The government’s plan to increase domestic debt in 2024 raised concerns, with debt servicing projected to rise significantly in the coming years.In a positive note, the IMF endorsed Nigeria’s capacity to repay, indicating that the country’s actions to address challenges are recognized.

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