The International Monetary Fund (IMF) has expressed concern that Nigeria’s ambitious economic reforms, introduced nearly two years ago, have not yet translated into tangible benefits for the average Nigerian. Despite efforts to stabilize the economy, poverty and food insecurity remain widespread.
In a recent statement, Axel Schimmelpfennig, the IMF Mission Chief for Nigeria, acknowledged the government’s steps to stabilize the economy, enhance resilience, and support growth. However, Highlighted that these gains have yet to benefit all Nigerians, as poverty and food insecurity remain high.
“The outlook is marked by significant uncertainty,” Schimmelpfennig noted, highlighting the challenges posed by increased global uncertainty and falling oil prices. Nonetheless, he commended the reforms for positioning the economy better to navigate these external challenges.
President Bola Ahmed Tinubu’s administration initiated several key reforms aimed at correcting the country’s public finances. These included the liberalization of the naira, the removal of fuel subsidies, and ending the Central Bank’s financing of the fiscal deficit.
While these measures were seen as necessary to address fiscal imbalances, they have had immediate adverse effects on the cost of living. The removal of fuel subsidies led to a sharp increase in fuel prices, contributing to inflation and pushing many Nigerians deeper into poverty.
According to the World Bank, poverty in Nigeria has surged over the past six years, now affecting more than half of the population, with 129 million people living in poverty. The IMF’s assessment aligns with this, indicating that the benefits of the economic reforms have not yet reached the broader population.
Food insecurity has become a pressing issue, with many Nigerians struggling to afford basic staples. The IMF has urged the government to address this growing crisis promptly.
“Current reforms, while well-intentioned, have not delivered measurable results for the average Nigerian,” said Andrew Mamedu, Country Director for ActionAid Nigeria. “Food prices remain high, and many Nigerians still struggle to afford basic staples.”
In response to these challenges, President Tinubu has acknowledged the hardships faced by Nigerians due to the reforms. During a meeting with IMF Managing Director Kristalina Georgieva, he assured that his administration would continue to prioritize the welfare of the poor and vulnerable, even as the economic reforms bear fruit.
“We have started seeing positive results from our reforms, and the Nigerian people now understand the need for them, but we have to reduce the hardship that has resulted from the implementation,” President Tinubu stated.
The IMF has called for a balanced approach, urging the Nigerian government to complement its economic reforms with targeted social investments. Gita Gopinath, the IMF’s First Deputy Managing Director, emphasized the importance of rechanneling savings from subsidy removal into social safety nets for vulnerable households.
“The removal of fuel subsidies, while necessary, has exacerbated hardship for many Nigerians,” Gopinath said. “The government needs to rechannel the savings from subsidy removal into social safety nets for vulnerable households.”
