Nigeria still borrowing amid high debt costs – IMF

Despite surging borrowing costs, Nigeria continues to maintain a strong presence in the global debt market, according to the International Monetary Fund (IMF).

During a press briefing at the IMF/World Bank annual meetings in Washington DC, Tobias Adrian, the IMF's Financial Counsellor, noted that Nigeria and other frontier markets have been active in the debt market throughout 2024, despite financing costs being significantly higher than 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 stated.

The IMF also expressed support for Nigeria’s recent monetary policy initiatives, including interest rate hikes and foreign exchange reforms led by the Central Bank of Nigeria (CBN). These measures, designed to stabilize the economy, were praised as essential steps in curbing inflation, which remains close to 30 percent. Adrian emphasized that the CBN’s shift towards inflation targeting and liberalization of the exchange rate is helping mitigate the impact of rising inflation, worsened by recent natural disasters such as floods.

In addition, the IMF has revised its economic growth forecast for Nigeria, projecting a slowdown in 2024 due to persistent inflationary pressures and ongoing economic challenges.

At the same conference, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, held strategic discussions with IMF Managing Director Kristalina Georgieva. According to a statement from the finance ministry, talks focused on Nigeria’s economic reform agenda under President Bola Tinubu’s administration and the progress made so far. Edun is advocating for increased international support and concessional financing to sustain these domestic reforms, which aim to strengthen economic resilience and improve living standards.

During the G-24 leaders’ news conference, Edun also called for concessional loans from the IMF and World Bank to support Nigeria’s reform programs. He stressed the importance of affordable financing in cushioning the poor and vulnerable from the immediate costs of economic adjustments while promoting long-term macroeconomic sustainability.

In a separate session, CBN Governor Yemi Cardoso is expected to lead a discussion on strengthening ties with Nigerians in the diaspora, focusing on ways to boost remittance inflows to help shore up foreign exchange reserves amid Nigeria’s fiscal challenges.