IMF: Nigeria continues to borrow despite high debt costs

The International Monetary Fund (IMF) claims that Nigeria is still a major player in the global debt market despite rising borrowing prices.

Nigeria and other frontier markets have been active in the debt market during 2024, Tobias Adrian, the IMF’s Financial Counsellor, said at a press briefing at the IMF/World Bank annual meetings in Washington, DC, even though financing costs have increased significantly from pre-2021 levels.

“Frontier markets, including Nigeria, have been active in the debt market this year. Though access to financing is more expensive, overall issuance levels have remained encouraging,” Adrian said.

Nigeria’s recent monetary policy actions, including as interest rate increases and foreign exchange reforms spearheaded by the Central Bank of Nigeria (CBN), have also received support from the IMF.

These economic stabilisation measures were hailed as crucial steps in reducing inflation, which is still near 30 percent.

Adrian underlined that the CBN’s move to inflation targeting and exchange rate liberalisation is lessening the effects of growing inflation, which has been made worse by recent floods and other natural catastrophes.

The IMF has also updated its prediction for Nigeria’s economic development, predicting a slowdown in 2024 as a result of prolonged economic difficulties and sustained inflationary pressures.

IMF Managing Director Kristalina Georgieva and Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, had strategic talks during the same conference.

Talks centred on Nigeria’s economic reform plan under President Bola Tinubu’s government and the advancements made thus far, according to a statement from the finance ministry.

In order to maintain these domestic reforms, which are intended to raise living standards and create economic resilience, Edun is arguing for more international assistance and concessional funding.

Edun also urged the IMF and World Bank to provide concessional loans to help Nigeria’s reform initiatives during the news conference of the G-24 leaders.

In order to protect the poor and vulnerable from the immediate costs of economic changes and to support long-term macroeconomic sustainability, he emphasised the significance of accessible funding.

In a different meeting, CBN Governor Yemi Cardoso is anticipated to chair a conversation about enhancing relations with Nigerians living abroad, with an emphasis on methods to increase remittance inflows to support foreign exchange reserves in the face of Nigeria’s economic difficulties.