The IMF recommends a strict monetary policy to reduce Nigerian inflation

International Monetary Funds (IMF) on Friday call for strict monetary policy to reduce Nigerian inflation.

The head of the IMF mission for Nigeria, Axel Schimmelpfennig, made a call in a statement after his visit to hold a discussion for consultation Article IV 2025 with Nigeria.

Schimmelpfennig led the IMF team to Lagos and Abuja from 2 to 15 April.

He said: “Nigerian authorities have taken important steps to stabilize the economy, increase resilience, and support growth.

“Fiscal deficit financing by the central bank has stopped, expensive fuel subsidies are removed, and the function of the foreign exchange market has increased.

“The benefits have not benefited all Nigerians because poverty and food insecurity remain high.

“Prospects are characterized by significant uncertainty. Increased global risk sentiment and lower oil prices have an impact on the Nigerian economy.”

Also Read: IMF Urges the Nigerian Government to Focus on Vulnerable Populations in Efforts to Stabilize the Economy

He said that the reforms since 2023 had put the Nigerian economy in a better position to navigate the external environment.

“In the future, macroeconomic policies are needed to further strengthen the buffer and resilience while creating conditions that allow for growth led by the private sector,” added the IMF official.

He said Nigeria’s authority communicated with the mission that they would apply the 2025 budget in a responsive way to decreased international oil prices.

Schimmelpfennig said the neutral fiscal attitude would support monetary policy to reduce inflation.

“To protect the priority of the main expenditure, it is very important that fiscal savings from the removal of fuel subsidies are channeled to the budget.

“Specifically, adjustments must protect critical investment and increase growth, while accelerating and expanding cash transfer delivery under programs supported by the World Bank to relieve those who experience food insecurity.

“The strict monetary policy attitude is needed to guide inflation strongly,” he concluded.

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