The adjustment contained in the July 2024 World Economic Outlook report released on Tuesday, marks a 0.2 percentage point reduction from the previous forecast of 3.3 percent.
The IMF also maintained its 3.0 percent growth forecast for Nigeria in 2025. Notably, Nigeria’s Gross Domestic Product (GDP) growth dropped to 2.98 percent in Q1’24 from 3.46 percent in Q4’23, according to data from the National Bureau of Statistics (NBS).
In response to Nigeria’s downgrade, the IMF lowered its 2024 economic growth projection for Sub-Saharan Africa to 3.7 percent from the earlier forecast of 3.8 percent in the April World Economic Outlook.
However, it revised upward its 2025 forecast for the region to 4.1 percent from 4.0 percent.
Globally, the IMF maintained its projections of 3.2 percent growth for 2024 and 3.3 percent for 2025. The IMF highlighted challenges in global economic conditions, noting varied momentum across economies and persistent services price inflation impacting monetary policy decisions.
In managing these risks and supporting growth, the IMF emphasised the need for careful policy sequencing to achieve price stability and strengthen economic buffers amidst escalating trade tensions and policy uncertainties.
The IMF’s engagement in Africa is multifaceted and runs through several key systems that are dependent on these ratings.
Policy guidance – The IMF proposes technical support and policy guidance to help African countries plan and execute economic growth. This advice ecompases regions such as fiscal approach, financial policy, and financial law.
Capacity building – Through training activities and workshops, the IMF helps bolster the capability of African nations to govern their economies effectively. This comprises enhancing tax collection, budgeting, and public economic management.
Nigeria’s inflation rate surged to a new peak in June 2024, reaching 34.19%, as reported by the latest data from the National Bureau of Statistics (NBS). This marks a 0.24% increase from May 2024, when inflation was recorded at 33.95%.
The NBS’s Consumer Price Index (CPI) released on Monday highlighted the upward trend: “In June 2024, the headline inflation rate rose to 34.19% compared to May 2024, which was 33.95%. This represents an increase of 0.24 percentage points from the previous month.”
Year-on-year, the headline inflation rate for June 2024 was significantly higher, up by 11.40 percentage points compared to June 2023, which stood at 22.79%.
On a month-on-month basis, inflation in June 2024 was 2.31%, up by 0.17% from May 2024, when it was 2.14%. This indicates a faster rate of price increase in June compared to May.
Food prices also experienced a notable increase in June 2024. According to the CPI report, food inflation for the month was 2.55%, up by 0.26% from May 2024, which recorded 2.28% food inflation.
The rise in food prices was attributed to higher costs for essential items such as groundnut oil, palm oil (oil & fats category), tubers like water yam, cocoyam, cassava (potatoes, yam & other tubers category), and various types of fish including catfish, croaker, mudfish, and snail (fish category).
In response to the escalating prices of basic goods, the government recently announced measures to alleviate the situation.
These include the suspension of duties, tariffs, and taxes on the importation of maize, husked brown rice, wheat, and cowpeas through land and sea borders for 150 days.
Additionally, plans were approved for the procurement of 2,000 tractors and 1,200 trailers, alongside the establishment of a committee to address the underlying causes of the food crisis in the country.
Experts have pointed to factors such as insecurity and inadequate equipment as major impediments to food production in Nigeria.