IMF Speaks on Nigeria’s Participation in Global Loan Market Despite High Borrowing Cost
- Despite challenges caused by high borrowing costs, Nigeria continues to participate in the global loan market
- Nonetheless, the IMF has expressed support for Nigeria's recent monetary policy initiatives
- The IMF also revised its economic forecast for Nigeria, projecting slower growth in 2024
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Nigeria and other frontier markets have maintained significant activity in the debt market throughout 2024, despite rising financing costs compared to pre-2021 levels.
Source: UGC
Tobias Adrian, IMF's financial counsellor and director of monetary and capital markets, stated this at a press conference on the global financial stability report at the IMF/World Bank annual meetings in Washington, DC.
He said:
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“Frontier markets, including Nigeria, have been active in the debt market this year, and though access to financing is still more expensive than before, the overall issuance levels have been encouraging.”
The IMF, however, voiced support for Nigeria's recent monetary policy actions, specifically the interest rate increases and foreign exchange reforms implemented by the Central Bank of Nigeria with the aim of stabilising the economy, the Punch reported.
Adrian pointed out that in order to combat inflation, which is still near 30%, the CBN's move towards inflation targeting and its initiatives to liberalize the currency rate have been essential.
Adrian further emphasised the significance of these measures, especially in light of the inflationary pressures that have been exacerbated by recent natural catastrophes like floods, which have made life more difficult for a large number of Nigerians.
Additionally, the IMF updated its economic estimate for Nigeria, predicting a decrease in growth in 2024.
The most recent World Economic Outlook study, which was made public on Tuesday, October 22, projects that Nigeria's GDP will expand by 2.9% in 2024, continuing the growth rate that was observed in 2023.
In comparison to the earlier projections in July and April, the most recent estimate shows a 0.2% and 0.4% reduction respectively.
The IMF's cautious approach to the difficulties facing emerging markets, especially Nigeria, is reflected in this adjustment.
In light of lower-than-expected activity in the first half of the year, the international lender pointed out that the change reflects slower growth in Nigeria.
Nigeria successfully repays China, others $1.81bn
Legit.ng earlier reported that new data from the CBN showed that the Nigerian government allocated a significant $1.81 billion to service foreign debts during the first seven months of 2023.
An analysis of the amount showed that in January 2023, the Nigerian government set aside $112.35 million to service foreign debt.
February saw a higher debt servicing of $288.5 million, while March witnessed a substantial expense of $400.5 million.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
