THE International Monetary Fund (IMF) has said inflation, debt, and forex crisis is pushing the Nigerian economy and other African economies to the brink.
The Managing Director of the IMF, Kristalina Georgieva, said ministers of finance and central bank governors on the continent revealed the information to her this week.
She continued by saying that the majority of the continent’s nations could raise capital from international financial markets since they lacked sizable local markets.
She stated, “The particularly difficult conditions in many African countries at this moment is important to consider. In my meeting with Ministers of Finance and Central Bank Governors from the continent this week, many highlighted how the effects of this, entirely exogenous, shock was pushing their economies to the brink.
“The effect of higher food prices is being felt acutely as food accounts for a higher share of income. Inflation, fiscal, debt and balance of payments pressures are all intensifying. Most are now completely shut out from global financial markets; and unlike other regions don’t have large domestic markets to turn to.
“Against this backdrop, they are calling on the international community to come up with bold measures to support their people. This is a call we need to heed.”
Georgieva disclosed this in a report titled, ‘Facing a Darkening Economic Outlook: How the G20 Can Respond,’ on the IMF’s website. The report, which was released on Wednesday, is a backdrop to the meeting that G20 ministers and central bank governors will have in Bali later this week.
The managing director of the Washington-based lender claims that the impact of the conflict in Ukraine on people and the economy has gotten worse, with shocks to commodity prices and an increase in the cost of living creating a problem for hundreds of millions of people.
She claimed that inflation has risen above expectations and has affected more than just the price of food and energy, leading major central banks to declare additional monetary tightening.
She revealed that the fund would lower its forecast for global growth in its World Economic Outlook update due out later this month for both 2022 and 2023.
She explained that 2022 will be challenging and that a potentially challenging 2023 is already beginning to take shape.
Georgieva stated, “It is going to be a tough 2022—and possibly an even tougher 2023, with increased risk of recession.
“That is why we need decisive action and strong international cooperation, led by the G20. Our new report to the G20 outlines policies that countries can use to navigate this sea of troubles.”