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IMF says Nigeria’s economic outlook challenging

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The International Monetary Fund (IMF) has said that Nigeria’s economic outlook remains challenging. Africa’s most populous nation has seen food prices going up due to the current Russia-Ukraine conflict.

The IMF says Nigerian inflation has gone up by 17 per cent and the Central Bank of Nigeria (CBN) has recently hiked its monetary policy rate. It has also called on policymakers to design measures that will protect the vulnerable in these tough times.

The IMF has concluded its visit to Nigeria. It says GDP growth in the country is expected to remain at 3.4 per cent.

The international lender has cautioned that some of the downside risks include deterioration of security conditions, upcoming elections, low vaccination rates against COVID-19 and higher global interest rates.

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The IMF says the start of operations at the Dangote refinery and decisive steps to mobilize revenues could spur inclusive growth in Nigeria.

“Regarding the economic outlook, GDP growth is projected at 3.4 per cent (y/y) in 2022 while inflation is expected to remain elevated.

“The fiscal deficit of the Consolidated Government is expected to remain high at 6.1 per cent of GDP due in great measure to costly petrol subsidies and limited tax revenue collections.

“Downside risks in the near term arise from further deterioration of security conditions, elections, low vaccination against Covid-19 and higher global interest rates. On the upside, steady private sector recovery and further broadening of growth, the start of operations at the Dangote refinery and decisive steps to mobilize revenues, in line with the Strategic Revenue Growth Initiative (SRGI) could spur inclusive growth and development,” the IMF stated.

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