The organisation disclosed this in its just concluded Article IV consultation with Nigerian authorities.
It said, “The spillover effects of the war in Ukraine, which have been transmitted mainly through higher domestic food prices, worsened the effects of the pandemic, particularly on the most vulnerable— with Nigeria being among the countries with the lowest food security.”
It further stressed the need of improving the performance of the agricultural sector for job creation and food security.
The IMF noted the oil industry is faced with drawbacks from production and price volatility, while climate-related natural disasters create the same risk to agricultural production.
It advised the Nigerian authorities to ensure delivery on its responsibility to remove fuel subsidies by mid-2023, as part of plans to boost well-targeted social spending.
The IMF advised the Central Bank of Nigeria to be prepared to increase the monetary policy rate if needed, and also include additional plans for financing its fiscal deficits and phasing out credit intervention programs.
It implored the government to conclude securitisation of the apex bank’s existing overdrafts stock to the federal government and emphasized that the apex bank’s budget financing should strictly adhere to the statutory limits.
Despite saluting the expansion of Nigeria’s economic recovery, the IMF lamented that the chance to enjoy the benefits from higher global oil prices was missed.
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