IMF says Nigeria still borrowing amid high debt costs

The International Monetary Fund (IMF) has decried Nigeria’s engagement with the global debt market despite challenges posed by high borrowing costs.

Tobias Adrian, the IMF’s Financial Counsellor and Director of Monetary and Capital Markets, commented on the debt activity during a press conference on the global financial stability report at the IMF/World Bank annual meetings in Washington DC.

He said that Nigeria and other frontier markets have maintained significant activity in the debt market throughout 2024, even though financing costs have surged compared to pre-2021 levels.

His words, “Frontier markets, including Nigeria, have been active in the debt market this year, and though access to financing is still more expensive than before, the overall issuance levels have been encouraging.”

However, the IMF expressed support for Nigeria’s recent monetary policy measures, particularly the Central Bank of Nigeria’s interest rate hikes and foreign exchange reforms, which have been designed to stabilise the economy.

Adrian noted that the CBN’s shift toward inflation targeting and its efforts to liberalise the exchange rate has been crucial in addressing inflation, which remains close to 30 per cent.

He further stressed the importance of these reforms, particularly given the inflationary pressures compounded by recent natural disasters, such as floods, which have worsened living conditions for many Nigerians.

The IMF also revised its economic forecast for Nigeria, projecting a slowdown in the country’s growth for 2024.

According to the latest World Economic Outlook report released on Tuesday, Nigeria’s economy is now expected to grow at 2.9 per cent in 2024, maintaining the same growth pace recorded in 2023.

The latest projection is a 0.2 per cent decrease from the previous projection in July and 0.4 per cent decrease from the previous projection in April.

This adjustment reflects the IMF’s cautious stance on the challenges facing emerging markets, including Nigeria.

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