• UN Deputy Chief, Amina Mohammed says Nigeria’s reforms showing early gains, warns rising inequality threatening progress
•Fund warns country’s limited fiscal space weakens response to food inflation shock
Eromosele Abiodun and Nume Ekeghe in Washington DC
Following the International Monetary Fund (IMF) disclosure that it was preparing a potential $50 billion support package aimed at cushioning vulnerable economies from the economic shockwaves of rising geopolitical tensions in the Middle East, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday, signalled that the West African country will not seek external bailout support, opting instead to rely on ongoing domestic reforms to navigate rising global uncertainties.
This comes as the United Nations Deputy Secretary-General, Amina Mohammed, warned that while Nigeria’s recent macroeconomic reforms were beginning to stabilise growth, widening inequality and persistent food insecurity risks could undermine those gains unless policy coordination and social protection are significantly strengthened.
Also yesterday, the IMF warned that Nigeria’s limited fiscal space was constraining its ability to respond effectively to surging food inflation, even as rising transport and logistics costs intensify pressure on household incomes.
Edun, made the clarification at the African Finance Ministers’ press briefing held at the ongoing IMF/World Bank Annual Meetings in Washington, D.C, where he also highlighted the impact of global economic shocks on African economies.
He said Nigeria’s reform programme over the past two years has helped restore policy credibility and improved resilience against external pressures, noting that the country has opted for market-based adjustments rather than administrative controls.
He said: “Nigeria has no plans at the moment to approach the IMF or any other such body.”
Edun has called for faster and more coordinated financial support for African economies, as global financing discussions intensify around a proposed $50 billion support package for vulnerable countries.
He said: “The IMF talked about $50 billion and we all know that the funding will largely go to Africa, because those are the most vulnerable countries. And the reality is that what we’re asking for in this instance, is that the funds and the support be released quickly and at scale.”
He also emphasised that while Nigeria has strengthened its domestic buffers through reforms, many African countries remain highly exposed and in need of external support mechanisms.
Edun said Nigeria’s reform programme over the past two years has helped the economy adjust more effectively to global shocks by relying on market mechanisms rather than administrative controls.
He said: “What has happened is that for Nigeria, for instance, at this time, we are and have been in a position to allow the market mechanism to correct and to adjust to the realities of the situation, rather than resorting to administrative controls. The major gain of the macroeconomic reforms has been market pricing of major items, foreign exchange, petroleum products, etc.
“So that has been the adjustment mechanism that we have relied on, and it has meant that there has been less disruption to our trajectory.”
Meanwhile, UN Deputy Chief Mohammed Says Nigeria’s Reforms Showing Early Gains, Warns Rising Inequality Threatens Progress.
Amina Mohammed says Nigeria’s reforms showing early gains, warns rising inequality threatening progress
Speaking on the sidelines of the IMF/World Bank Meetings, Mohammed linked Nigeria’s domestic food security challenges to broader global shocks, including conflicts in the Middle East, the Sahel, and Sudan, which she said are worsening an already fragile food system across Sub-Saharan Africa.
She said: “I think that it’s very clear that Nigeria’s efforts at policy have seen the economy stabilise and to a degree, grow. The challenge is the inequalities that are growing and that has to be addressed at all tiers of government.
“And I think you know the President is making the efforts to try to do that in his engagement with the State governments and the resources that are going to them, but it requires longer term and certainly for now, the cash transfer programs, the social protection programs have been a good effort.
“Let’s remember that where there is conflict, whether it is in Iran or it is in Zamfara or is in Borno, these conflicts exacerbate food security. So already we have been dealing with that in Nigeria and the Sahel and Sudan, which is probably the worst affected in the world today.
She added that geopolitical tensions were worsening supply chain pressures, particularly around fertiliser and agricultural inputs, warning that attention must shift to protecting the next planting cycles.
“What happens with Iran is it exacerbates it, and when we look at that, we are lucky in Nigeria to have the fertilizer plant that we do at the Dangote refineries we also have in Morocco. And so, what we need to do is to see how we fill those supplies. We don’t allow a breakdown for the next planting season. This planting season, I believe most people have taken care of it. It’s the next one and the one after that.
“Shore up the policies, make sure that we are working better together through the three tiers of government, because the local governments is where it acts. I was in the field the other day, it is local governments and state governments that need to be reinforced with the capacities to deliver to their people,” she added.
In the meantime, the IMF has warned that Nigeria’s limited fiscal space was constraining its ability to respond effectively to surging food inflation, even as rising transport and logistics costs intensify pressure on household incomes.
The Fund said the combination of tight public finances and supply-side shocks are leaving policymakers with difficult trade-offs, as inflationary pressures largely driven by food reassert themselves across the economy.
Speaking at the African Department Regional Press Briefing at the ongoing Spring Meetings in Washington DC, yesterday, the Director of the African Department at the IMF, Abebe Aemro Selassie, said Nigeria was already feeling the strain from a new round of shocks, with transport costs emerging as a key channel through which inflation is spreading.
According to Selassie, increases in transportation costs were transmitting quickly into higher food prices, worsening inflationary pressures on households in both urban and rural areas.
“We are already seeing quite a lot of increase in transportation prices that people are facing. Transportation costs are very high for people in urban areas and even higher in rural areas. So we are already seeing quite a bit of a pinch from the crisis on people, making life difficult,” he said.
Selassie said the impact of the current shocks extends beyond rising inflation, disrupting food systems as elevated transport costs, high fertiliser prices, and supply bottlenecks converge to drive up the cost of basic commodities.
He, however, noted that reforms implemented in recent years—particularly measures to stabilise debt and narrow fiscal deficits—are starting to offer some resilience against external shocks.
“In recent years, steps have been taken to stabilise debt and to reduce fiscal deficits. That stabilisation helps now when another shock like this comes, because there is a little bit more scope to try and defray the impact on people’s livelihoods,” he said.
Despite this, he warned that policy responses must be carefully calibrated to avoid undermining longer-term fiscal sustainability, stressing that short-term interventions should remain aligned with medium-term economic objectives.
On Nigeria’s borrowing strategy, Selassie reiterated that what matters most was maintaining debt at manageable levels relative to the country’s capacity to service it.
“So in recent years, steps have been taken to stabilise debt to reduce fiscal deficits. So that stabilisation, I think helps now when another shock like this comes, because, you know, there is a little bit more scope to try and defray the cost, the impact of this shock on people’s livelihoods.
“In terms of policy response, it has to be very country specific, and even within countries, you know, it could vary from region to region. And what we are trying to do is identify the amount of space that governments have to make interventions, where interventions are being made.
“What we are pleading is that these are consistent with the medium-term objectives that countries have, and that they’re not thrown off course by this. Because, you know, that would be a double whammy for countries.
“What’s really important is trying to keep the level of debt as manageable as possible relative to debt service capacity, and to ensure smooth maturities,” he said, adding that Nigeria’s debt management authorities have the expertise to navigate the trade-offs.
On his part, Deputy Director, African Department at the IMF, Amadou Sy, noted that while the Africa Continental Free Trade Area (ACFTA), has in recent times recorded some progress, it has been uneven.
According to him, there are key negotiations to be concluded on issues “like the rules of origins, tariff concessions, and that limits the effectiveness of trade as diversification, as a shock buffer, but the long-term potential is clear, and it is about reducing barriers, modernizing customs procedures, and deepening trade and services. And I would just add also the financing of trade, which is often overlooked, which is a key area.”
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