Latest news with #NigerianEconomy
Zawya
02-07-2025
- Business
- Zawya
International Monetary Fund (IMF) Staff Completes 2025 Article IV Mission with Nigeria
The Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.(1) The Nigerian authorities have implemented major reforms over the past two years which have improved macroeconomic stability and enhanced resilience. The authorities have removed costly fuel subsidies, stopped monetary financing of the fiscal deficit and improved the functioning of the foreign exchange market. Investor confidence has strengthened, helping Nigeria successfully tap the Eurobond market and leading to a resumption of portfolio inflows. At the same time, poverty and food insecurity have risen, and the government is now focused on raising growth. Growth accelerated to 3.4 percent in 2024, driven mainly by increased hydrocarbon output and vibrant services sector. Agriculture remained subdued, owing to security challenges and sliding productivity. Real GDP is expected to expand by 3.4 percent in 2025, supported by the new domestic refinery, higher oil production and robust services. Against a complex and uncertain external environment, medium-term growth is projected to hover around 3½ percent, supported by domestic reform gains. Gross and net international reserves increased in 2024, with a strong current account surplus and improved portfolio inflows. Reforms to the fx market and foreign exchange interventions have brought stability to the naira. Naira stabilization and improvements in food production brought inflation to 23.7 percent year-on-year in April 2025 from 31 percent annual average in 2024 in the backcasted rebased CPI index released by the Nigerian Bureau of Statistics. Inflation should decline further in the medium-term with continued tight macroeconomic policies and a projected easing of retail fuel prices. Fiscal performance improved in 2024. Revenues benefited from naira depreciation, enhanced revenue administration and higher grants, which more-than-offset rising interest and overheads spending. Downside risks have increased with heightened global uncertainty. A further decline in oil prices or increase in financing costs would adversely affect growth, fiscal and external positions, undermine financial stability and exacerbate exchange rate pressures. A deterioration of security could impact growth and food insecurity. Executive Board Assessment (2) Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities on the successful implementation of significant reforms during the past two years and welcomed the associated gains in macroeconomic stability and resilience. As these gains have yet to benefit all Nigerians, and with heightened economic uncertainty and significant downside risks, Directors emphasized the importance of agile policy making to safeguard and enhance macroeconomic stability, creating enabling conditions to boost growth, and reducing poverty. Directors agreed that the Central Bank of Nigeria is appropriately maintaining a tight monetary policy stance, which should continue until disinflation becomes entrenched. They welcomed the discontinuation of deficit monetization and ongoing efforts to strengthen central bank governance to set the institutional foundation for inflation targeting. Directors also welcomed steps taken by the authorities to build reserves and support market confidence and praised reforms to the foreign exchange market that supported price discovery and liquidity. They called for implementation of a robust foreign exchange intervention framework focused on containing excess volatility, stressing that the exchange rate is an important shock absorber. Directors also agreed with staff's call to phase out existing capital flow management measures in a properly timed and sequenced manner. Directors called for a neutral fiscal stance to safeguard macroeconomic stabilization with priority given to investments that enhance growth. Directors also called for accelerating the delivery of cash transfers to assist the poor. They commended the authorities on advancing the tax reform bill, an important step towards enhancing revenue mobilization and creating fiscal space for development spending, while preserving debt sustainability. Directors recognized actions to strengthen the banking system, including the ongoing process of increasing banks' minimum capital. They welcomed the authorities' efforts to boost financial inclusion and promote capital market development, while emphasizing the importance of moving to a robust risk‑based supervision for mortgage and consumer lending schemes as well as the fintech and crypto sectors. Directors welcomed progress made in strengthening the AML/CFT framework and stressed the importance of resolving remaining weaknesses to exit the FATF grey list. To lift Nigeria's growth outlook, improve food security, and reduce fragility, Directors highlighted the importance of tackling security, red tape, agricultural productivity, infrastructure gaps, including boosting electricity supply, as well as improved health and education spending, and making the economy more resilient to climate events. They noted that addressing structural impediments to private credit extension is also needed to support growth. Directors welcomed the IMF's capacity development to support authorities' reform efforts and agreed that enhancing data quality is critical for sound, data‑driven policymaking. Table 1. Nigeria: Selected Economic and Financial Indicators, 2023–26 2023 2024 2025 2026 5/8/2025 13:03 Act. Est. Proj. Proj. National income and prices Annual percentage change (unless otherwise specified) Real GDP (at 2010 market prices) 2.9 3.4 3.4 3.2 Oil GDP -2.2 5.5 4.9 2.3 Non-oil GDP 3.2 3.3 3.3 3.3 Non-oil non-agriculture GDP 3.9 4.1 3.7 3.7 Production of crude oil (million barrels per day) 1.5 1.5 1.7 1.7 Nominal GDP at market prices (trillions of naira) 234 277 320 367 Nominal non-oil GDP (trillions of naira) 221 260 303 351 Nominal GDP per capita (US$) 1,597 806 836 887 GDP deflator 12.6 14.5 11.4 11.4 Consumer price index (annual average) 24.7 31.4 24.0 23.0 Consumer price index (end of period) 28.9 15.4 23.0 18.0 Investment and savings Percent of GDP Gross national savings 31.8 39.6 37.5 37.7 Public -0.1 3.9 2.2 1.7 Private 31.9 35.7 35.3 36.1 Investment 30.0 30.4 30.5 33.1 Public 3.2 4.8 5.4 5.5 Private 26.8 25.6 25.1 27.6 Consolidated government operations Percent of GDP Total revenues and grants 9.8 14.4 14.2 13.8 Of which: oil and gas revenue 3.3 4.1 5.1 4.9 Of which: non-oil revenue 5.8 9.2 8.8 8.8 Total expenditure and net lending 13.9 17.1 18.9 18.7 Overall balance -4.2 -2.6 -4.7 -4.9 Non-oil primary balance -4.9 -4.9 -7.2 -6.9 Public gross debt1 48.7 52.9 52.0 50.8 Of which: FX denominated debt 18.1 25.5 25.8 24.8 FGN interest payments (percent of FGN revenue) 83.8 41.1 47.3 49.2 Money and credit Contribution to broad money growth (unless otherwise specified) Broad money (percent change; end of period) 51.9 42.7 17.9 22.3 Net foreign assets 10.5 30.4 2.1 7.2 Net domestic assets 41.3 12.3 15.8 15.1 Of which: Claims on consolidated government 20.1 -11.9 6.2 4.1 Credit to the private sector (y/y, percent) 53.6 30.1 17.9 18.2 Velocity of broad money (ratio; end of period) 2.7 3.3 2.2 2.1 External sector Annual percentage change (unless otherwise specified) Current account balance (percent of GDP) 1.8 9.2 7.0 4.6 Exports of goods and services -12.8 -4.5 -6.0 1.3 Imports of goods and services -4.4 -0.8 -6.8 8.4 Terms of trade -6.1 -0.6 -7.4 -3.3 Price of Nigerian oil (US$ per barrel) 82.3 79.9 67.7 63.3 External debt outstanding (US$ billions)2 102.9 102.2 105.9 110.2 Gross international reserves (US$ billions, CBN definition)3 33.2 40.2 36.4 39.1 Equivalent months of prospective imports of G&S 5.4 5.7 7.5 7.7 Memorandum items: Implicit fuel subsidy (percent of GDP) 0.8 2.1 0.0 0.0 Sources: Nigerian authorities; and IMF staff estimates and projections. 1 Gross debt figures for the Federal Government and the public sector include overdrafts from the Central Bank of Nigeria (CBN). 2 Includes both public and private sector. 3 Based on the IMF definition, the gross international reserves were US$8 billion lower in December 2024. (1) Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. Staff hold separate annual discussions with the regional institutions responsible for common policies in four currency unions—the Euro Area, the Eastern Caribbean Currency Union, the Central African Economic and Monetary Union, and the West African Economic and Monetary Union. For each of the currency unions, staff teams visit the regional institutions responsible for common policies in the currency union, collects economic and financial information, and discusses with officials the currency union's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis of discussion by the Executive Board. Both staff's discussions with the regional institutions and the Board discussion of the annual staff report will be considered an integral part of the Article IV consultation with each member. (2) At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions. Distributed by APO Group on behalf of International Monetary Fund (IMF).
Reuters
02-07-2025
- Business
- Reuters
Nigeria needs to recalibrate its budget for lower oil prices, says IMF
LONDON, July 2 (Reuters) - Nigeria needs to adapt its 2025 budget to lower oil prices and scale up cash transfers to shield the most vulnerable parts of its population, the International Monetary Fund said on Wednesday. Releasing the results of its routine "Article IV" assessment of Nigeria's economic policies, the IMF said economic growth had been steady but too low in per capita terms with inflation remaining high. The Fund predicted that the country's economy would expand at 3.4% this year and 3.2% in 2026. "The international economic environment that Nigeria lives in and operates in is marked by the very, very large uncertainty, and in particular, international oil price volatility impacts Nigeria directly through the fiscal and the external balances as well as inflation," said Axel Schimmelpfennig, the Fund's mission chief for Nigeria. The complex outlook made it more important than ever for policymakers to build and maintain buffers while being nimble and ready to respond to shocks or seize opportunities, he said. "Turning to our policy messages, the key challenge now is to tackle high poverty and food insecurity." Africa's largest oil exporter had assumed a price of $75 per barrel in its 2025 budget. Brent crude futures last traded at just over $68 a barrel.
Zawya
01-07-2025
- Business
- Zawya
Afreximbank completes upsizing of reserve-based lending facility for Oando to $375 million
African Export-Import Bank (Afreximbank) ( has successfully completed upsizing its reserve-based lending facility in favour of Oando Oil Limited to US$375 million. The company's pay down of the original US$525-million facility, secured in 2019, to US$100 million in 2024 created significant headroom for refinancing and enhancing Oando's financial flexibility. The upsizing, led by Afreximbank, with support from Mercuria Asia Resources PTE Limited (Mercuria), which marks a key milestone in Oando's strategic capital management, will support Oando's ambition to achieve production of 100,000 barrels of oil per day and 1.5 billion cubic feet of gas per day by the end of 2029, effectively boosting Nigeria's oil output and reinforcing the country's position in the global energy market. The upsizing is further expected to drive local economic growth by creating jobs, improving infrastructure, and fostering technological advancements in the oil and gas sector. Commenting on the development, Wale Tinubu, Group Chief Executive, Oando PLC and Executive Chairman, Oando Energy Resources said: 'We are pleased to have completed the upsizing of our RBL facility, a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximizing the value of our expanded asset portfolio. Our Joint Venture holds extensive reserves with the potential to generate over $11 billion in net cash flows to Oando over the assets' life. This working capital facility is a critical enabler towards efficiently extracting and monetizing these resources. We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long-term focus on maximizing production, optimizing asset performance, and delivering sustainable value to all stakeholders'. In his own comments, Mr. Haytham Elmaayergi, Executive Vice President, Global Trade Bank, Afreximbank, described the transaction as a critical step in advancing Afreximbank's strategy for promoting local content in Africa's oil and gas sector. 'Afreximbank remains a longstanding financial partner to Oando PLC and its affiliates and has consistently supported the company's growth and expansion initiatives. We are delighted that Mercuria, one of the world's largest independent energy and commodities groups and one of our partners, has brought its global expertise and financial backing to the transaction, further strengthening Oando's ability to execute its production growth strategy.' Distributed by APO Group on behalf of Afreximbank. Follow us on: Twitter Facebook LinkedIn Instagram About Afreximbank: African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra- and extra-African trade. For over 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa's trade, accelerating industrialisation and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank has set up a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA. At the end of December 2024, Afreximbank's total assets and contingencies stood at over US$40.1 billion, and its shareholder funds amounted to US$7.2 billion. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody's (Baa1), China Chengxin International Credit Rating Co., Ltd (CCXI) (AAA), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB-). Afreximbank has evolved into a group entity comprising the Bank, its equity impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure (together, "the Group"). The Bank is headquartered in Cairo, Egypt
Zawya
20-06-2025
- Business
- Zawya
Nigeria: Dangote blames shortage of domestic crude oil for reliance on imports from US
The President of Dangote Group, Alhaji Aliko Dangote, has blamed shortage of domestic crude oil for the major reason Dangote refinery increasingly relied on imports from the United States to meet its needs in recent months. Dangote stated this during the tour of the facility by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative. He applauded the technical committee for its role in supporting the implementation of President Tinubu's laudable Naira-for-Crude initiative. He also commended the positive impact of the naira-for-crude swap deal on the Nigerian economy, noting that it has led to a reduction in petroleum product prices, eased pressure on the dollar, and ensured the stability of the local currency, among others. However, he noted in a statement: 'Due to a shortage of domestic crude oil, the refinery has increasingly relied on imports from the United States to meet its needs in recent months.' He stressed the importance of bold investment in strategic sectors as a key to industrialisation, revealing that building the refinery required extensive infrastructure development, including a world-class, self-sufficient marine facility capable of accommodating the largest vessels globally. He assured the delegation of the refinery's commitment to national development. Designed to process a wide range of crude types, including African and Middle Eastern grades as well as US Light Tight Oil, the refinery has the capacity to meet 100 per cent of Nigeria's domestic demand for petrol, diesel, kerosene and aviation jet fuel, with a surplus available for export. The $20 billion Dangote Petroleum Refinery & Petrochemicals was described as 'a symbol of industrial revolution, driving Nigeria's economic emancipation' by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative during the tour of the facility on Tuesday. Coordinator of the OSS Technical Committee, Mrs Maureen Ogbonna, who led the delegation, described the refinery as a breath of fresh air, impacting virtually every sector of the economy. 'This refinery touches all our lives. There's scarcely any sector unaffected. From pharmaceuticals to construction, food to plastics, this project is transformational. God has used the President of the Dangote Group to liberate Nigeria. I see this as the beginning of an industrial revolution,' she said. Noting that, in line with President Bola Tinubu's vision of achieving full domestic sufficiency in petroleum products and positioning Nigeria as a major global exporter, the committee is committed to eliminating regulatory, operational and logistical barriers that hinder the smooth supply and sale of domestic crude oil and refined products in naira. Reflecting on the scale and sophistication of the facility, Ogbonna, who had visited during construction and more recently alongside the leadership of the Nigerian Ports Authority, expressed continued awe at its execution. 'It is truly mind-blowing that one man could envision and execute such a project. As we toured the refinery, we thought we had seen everything until we reached the laboratory. That lab alone is an institution. I don't know of any institution in Nigeria or even globally that boasts such a laboratory for petrochemical,' she said. Applauding the engineering feat, Ogbonna urged Dangote to remain focused and undeterred by detractors, emphasising that the project is a global achievement, not a personal enterprise. 'We feel truly honoured to have been warmly received by the President of the Dangote Group and his team. My advice to him is: do not be discouraged by critics. He was never self-centred. Despite the obstacles, he was driven by a vision for Nigeria's future, reaching far beyond Africa,' she added. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Zawya
29-05-2025
- Business
- Zawya
Nigeria's economy restructuring is still the way to go
TWO years into the Bola Tinubu administration, it has become clear, more than ever, why Nigeria requires a fundamental tinkering with the structure of governance to deliver optimum results. In the aftermath of the removal of subsidy from petroleum and the floatation of the naira, Nigeria's poverty situation spiked, and the N70,000 minimum wage agreed with the organised labour after long negotiations failed to guarantee a decent living for workers. It is a fact that as the administration marks two years in office, the cost of living remains prohibitive, and insecurity has forced many farmers to abandon food production as terrorists of different hues launch attacks everywhere. Per the World Bank, the poverty rate among Nigeria's rural population has reached an alarming 75.5 percent. The power sector is also in shambles. Apparently, the policies need to be tweaked to save the generality of Nigerians from immiseration and despair. But more than that, fundamental changes are also required to make the country fit for purpose. To be sure, the administration has harped on the steps to reinvent the economy and address poverty. According to the Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, Nigeria's economy is witnessing a significant turnaround, driven by bold reforms, improved coordination, and a renewed focus on national priorities. Hear him: 'We have seen four quarters of successive economic growth, stability in foreign exchange, and appreciation by Nigerians and the international community. Rating agencies have consistently appreciated what we are doing. We have seen investors from Brazil, Belarus, and Saudi Arabia increasingly entering our agricultural space. The world economic community and multilateral institutions are putting more faith in our economy. For the first time in 25 years, Nigeria is refining oil.' His counterpart in the Ministry of Solid Minerals Development, Dr Dele Alake, has been keen to stress the fact that the Tinubu administration's new policy of local value addition and a tightened licensing regime attracted over $800 million in processing projects last year, and that the sector also generated over ₦38 billion in revenue in 2024, up from just ₦6 billion the previous year, despite receiving only 18 percent of its ₦29 billion budgeted allocation. Alake said 250 mining cooperatives had been established nationwide to absorb informal miners into the formal economy. The administration is also harping on key road projects, including Abuja-Kaduna-Zaria-Kano Road, the Ninth Mile-Oturkpo-Makurdi Road; Sokoto-Badagry Highway; Abuja-Lokoja-Benin Road, Lagos-Calabar Coastal Highway (Phase 1): Enugu-Onitsha Expressway, Benin-Asaba Superhighway, Oyo-Ogbomoso Road, Bode Saadu-Kaima-Kosubosu Road, Enugu-Port Harcourt Expressway, Second Niger Bridge Access Road, Lagos-Ibadan Expressway and Bodo-Bonny Road. It says that in support businesses across the country, it established three funds, namely the Presidential Conditional Grant Scheme, FGN MSME Intervention Fund, and FGN Manufacturing Sector Fund, totalling N200bn. As many Nigerians have pointed out, there have been positive changes in passport application processes and the Minister of Interior, Olubunmi Tunji-Ojo, has also rolled out e-surveillance for border security. It is also salutary news that in the bid to diversify the economy, sectors namely ICT, are bringing significant revenue for the government, which has been keen to make the impression that it is not depending solely on the oil sector to manage the economy. However, regardless of any achievements the Tinubu government or any other administration may point to, the fact remains that Nigeria as presently constituted cannot witness any fundamental change. While much of the challenges that the country continues to confront are rooted in irresponsible leadership, the fact remains uncontested that the fundamental changes required to make the country functional are yet to be made. For instance, as we have pointed out time and again, there is no way an ethnically, linguistically and religiously diverse society like Nigeria can be policed centrally. In this regard, it is disappointing that the Federal Government has recently scaled down action on state policing, with the effect that Nigerians continue to live in fear as terrorists go on the rampage on a daily basis, littering the land with innocent blood. Recently, the president directed the creation of a forest guard unit to curb the onslaughts of terrorists who use Nigeria's vast forests as a base for their nefarious activities. The president also recently directed an immediate and comprehensive overhaul of national security strategies, demanding urgent action to end the escalating violence in Borno, Benue, Plateau and Kwara states, saying that the senseless targeting of innocent Nigerians must stop. But while not condemning the president's directive, it is important to point out that each day Nigeria continues to operate without state policing is a day that the government continues to put the lives of Nigerians in peril. Insecurity is at the heart of a lot of the ills that plague the country, and there is no getting out of the rut without decentralising the security architecture. It is time to have state policing. In this regard, it is significant that an all-inclusive pan-Nigerian group, The Patriots, recently released part of a detailed programme for its forthcoming national conference designed to evolve an acceptable constitutional framework for the country. The Patriots' agenda addresses questions regarding the most suitable system of government for Nigeria, appropriate tenure for elected political office holders, and the essentials of democratic federalism, questions which, we believe, the Tinubu government can begin to address using the report of the 2014 National Conference as a guide. Without prejudice to any new recommendations that may emerge from ongoing consultations and conferences by elder statesmen, the 2014 report contains a number of recommendations which, if well implemented, will assist in turning the country around. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
