The International Monetary Fund, IMF, said the rate of inflation in Nigeria is expected to remain elevated in 2022.
According to the lender, the fiscal deficit of the consolidated
government is expected to remain high at 6.1 per cent of the nation’s
Gross Domestic Product majorly due to costly petrol subsidies and
limited tax revenue collections.
This was contained in a statement issued after meetings between an IMF
team and Nigerian authorities.
They discussed recent economic and financial developments, and the
economic outlook for the country. According to them, Nigeria’s
economic growth is driven by services and agriculture, with the GDP
growth reaching 3.6 per cent – year-on-year – in the first quarter of 2022.
Despite this growth, they said the oil sector had been dragging the
economy with weakening oil production driven by persistent security
and technical challenges.
They further said that a renewed surge in food prices, exacerbated by the
war in Ukraine, and raising food security concerns pushed inflation to
17.7 per cent in May, adding that over 40 per cent of the Nigerian
population live below the poverty line.
The IMF said that despite supportive oil prices, gross foreign exchange
reserves fell to $38.6bn at end of May 2022.