Despite soaring borrowing costs, Nigeria remains active in the global debt market, as noted by the International Monetary Fund (IMF).
In a press briefing during the IMF/World Bank annual meetings in Washington, DC, Tobias Adrian, the IMF’s Financial Counsellor, highlighted that Nigeria and other frontier markets have continued to engage in the debt market throughout 2024, even as financing costs significantly exceed pre-2021 levels. “Frontier markets, including Nigeria, have been involved in the debt market this year. Although access to financing is pricier, overall issuance levels have remained promising,” Adrian stated.
The IMF also expressed its support for Nigeria’s recent monetary policy measures, which include interest rate increases and foreign exchange reforms led by the Central Bank of Nigeria (CBN). These initiatives aim to stabilize the economy and have been deemed crucial in addressing inflation, which is nearing 30 percent. Adrian emphasized that the CBN’s transition towards inflation targeting and the liberalization of the exchange rate are helping to mitigate the impact of rising inflation, exacerbated by recent natural disasters like floods.
Additionally, the IMF has revised its economic growth forecast for Nigeria, projecting a slowdown in 2024 due to ongoing inflationary pressures and economic challenges.
During the conference, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, engaged in strategic discussions with IMF Managing Director Kristalina Georgieva. According to a statement from the finance ministry, the talks focused on Nigeria’s economic reform agenda under President Bola Tinubu and the progress made thus far. Edun is advocating for increased international support and concessional financing to sustain these domestic reforms, which aim to enhance economic resilience and improve living standards.
During the G-24 leaders’ news conference, Edun also emphasized the need for concessional loans from the IMF and World Bank to support Nigeria’s reform programs, stressing the importance of affordable financing to protect the poor and vulnerable from the immediate economic adjustments while promoting long-term macroeconomic stability.
In a separate session, CBN Governor Yemi Cardoso is expected to lead discussions on strengthening connections with Nigerians in the diaspora, focusing on boosting remittance inflows to bolster foreign exchange reserves amid Nigeria’s fiscal challenges.
