World Bank, IMF Urge Nigeria to Coordinate Inflation Management

The International Monetary Fund (IMF) and the World Bank have urged the Central Bank of Nigeria (CBN) to continue its unwavering efforts to keep inflation under control.

Inflation in Nigeria rose from 33.6 percent in November to 34.8 percent in December.

Sameer Matta, the Senior Economist for Nigeria at the World Bank, underlined the significance of the CBN’s emphasis on reducing inflation during a panel discussion. Maintaining the path on inflation management is crucial. According to Matta, the central bank must keep up its efforts to control inflation.

He emphasized the necessity for supply-side reforms, such as raising agricultural yields and fortifying the connection between rural and urban areas. Additionally, he recommended that trade policies be reexamined in order to target particular industries and modify tariffs appropriately.

Fuel and foreign exchange subsidies account for two percent of Nigeria’s GDP, respectively, Matta noted, highlighting the substantial cost of not enacting changes.

He pointed out that this is a very high five percent of GDP.

In order to support the most vulnerable, he compared the necessary reforms to difficult medical decisions, highlighting the significance of speeding cash transfer programs and maintaining social protection measures.

Monetary and fiscal authorities working together
Nigeria’s country representative at the International Monetary Fund (IMF), Christian Ebeke, reaffirmed that in order to effectively fight inflation, fiscal and monetary authorities must coordinate.

He commended the central bank’s and fiscal authorities’ dedication to improving cooperation, which has assisted in lowering inflationary pressures.
In order to safeguard the most disadvantaged groups, Ebeke also emphasized the significance of addressing the distributional effects of changes, such as the elimination of fuel subsidies and Naira reforms. He emphasized the necessity of social protection measures as well as the significance that fiscal policies play in enhancing monetary efforts.
While stressing the value of open liability management and the advantages of securitization in spreading out maturities, he praised the CBN and fiscal authorities for their efforts to stop deficit monetization and enhance financial conditions.

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According to data from the National Bureau of Statistics, the headline inflation rate in Nigeria increased little to 34.80% in December 2024.

Due mostly to the higher demand for goods and services over the holiday season, this is a little increase of 0.20% above the rate of 34.60% in November 2024.
The headline inflation rate in December 2024 was 34.80%, 5.87% higher than the rate in December 2023 (28.92%).
When compared to the same month last year, this year-over-year increase shows a notable increase in the expense of living.