The International Monetary Fund (IMF) and the World Bank have called on the Central Bank of Nigeria (CBN) to maintain its steadfast commitment to controlling inflation, which climbed to 34.8% in December 2024, up from 33.6% in November 2024.
Speaking during a panel discussion, Sameer Matta, Senior Economist for Nigeria at the World Bank, highlighted the critical importance of sustained inflation management. “It is critical to stay the course on inflation control. The central bank must continue to ensure that inflation is kept in check,” Matta stated.
Matta stressed the need for structural reforms, including enhancing rural-urban connectivity, improving agricultural yields, and optimizing the supply chain. He also advocated revisiting trade regulations to better target industries and adjust tariffs for economic efficiency. Additionally, he pointed out that fuel and foreign exchange subsidies each account for 2% of Nigeria’s GDP, urging the government to prioritize reforms in these areas while accelerating cash transfer programs to shield vulnerable populations.
Collaboration Between Monetary and Fiscal Authorities
Christian Ebeke, Nigeria’s national representative at the IMF, underscored the importance of synergy between monetary and fiscal authorities to curb inflation effectively. He praised the ongoing collaboration between the CBN and fiscal policymakers, which has contributed to reducing inflationary pressures.
Ebeke also addressed the social implications of economic reforms, such as the removal of fuel subsidies and Naira revaluation, stressing the need for robust social protection measures to mitigate the impact on Nigeria’s most disadvantaged. He advocated for transparent liability management and highlighted the benefits of securitization to extend maturities and improve financial conditions.
Rising Inflation Trends
According to data from the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate rose slightly to 34.8% in December 2024, up from 34.6% in November. The seasonal surge in demand for goods and services during the holidays largely drove this increase.
When compared to December 2023, when inflation stood at 28.92%, the December 2024 figure reflects a significant annual rise of 5.87%, signaling a substantial increase in the cost of living.
As inflationary pressures persist, the collaboration between the CBN, fiscal policymakers, and international bodies like the IMF and World Bank remains critical to ensuring economic stability and protecting Nigeria’s most vulnerable populations.
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