IMF to Nigeria: Address growing food insecurity

The Federal Government must urgently address growing food insecurity, the International Monetary Fund (IMF) said.

Nigeria is implementing a series of economic reforms that have fuelled a cost of living crisis in Africa’s most populous nation. The removal of fuel subsidies and liberalization of currency controls, while welcomed by foreign investors, has spurred inflation that accelerating at the fastest pace in nearly three decades.

“With about eight per cent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority,” the IMF said in a statement on Monday.

The recent approval of a social-protection system that will provide cash transfers to vulnerable households is “an important step toward addressing this and implementation will be crucial.”

Amid annual food price inflation of 35.4 per cent, the spiraling cost of living has triggered sporadic protests across the country and looting of food reserves in areas including the capital, Abuja. At least 40 per cent of Nigeria’s population live in extreme poverty.

Nigeria’s central bank last week raised interest rates to a record 22.75 per cent to rein in inflation and support the naira, which has lost about 70 per cent of its value against the dollar since the government began implementing currency reforms in mid-2023. Further increases in official borrowing costs are likely, according to Bloomberg Economics.

“The decision by the monetary policy committee to further tighten monetary policy will help contain inflation and pressures on the naira,” the IMF said.