Latest news with #AxelSchimmelpfennig
Al Arabiya
02-07-2025
- Business
- Al Arabiya
Nigeria needs to recalibrate its budget for lower oil prices, says IMF
Nigeria needs to adapt its 2025 budget to lower oil prices and scale up cash transfers to shield the most vulnerable parts of its population that face hunger and poverty, the International Monetary Fund said on Wednesday. Releasing the results of its routine 'Article IV' assessment of Nigeria's economic policies, the IMF said economic growth had been steady but too low in per capita terms with inflation remaining high. The Fund predicted the country's economy would expand at 3.4 percent this year and 3.2 percent in 2026. As Africa's largest oil producer, Nigeria is under strain from relatively low international crude prices, which traded around $68 a barrel on Wednesday. 'The international economic environment that Nigeria lives in and operates in is marked by the very, very large uncertainty, and in particular, international oil price volatility impacts Nigeria directly through the fiscal and the external balances as well as inflation,' said Axel Schimmelpfennig, the Fund's mission chief for Nigeria. The complex outlook made it especially important for policymakers to build and maintain buffers while being ready to respond to shocks or seize opportunities. 'Turning to our policy messages, the key challenge now is to tackle high poverty and food insecurity,' he said further. Nigeria's government has supported the poorest part of its population through direct cash transfers since 2007 but has struggled to scale them up because of a lack of data on their impact and as large numbers of the population have no bank account. The 2025 budget is squeezed by Nigeria's assumption of oil production of 2 million barrels per day and an oil price of $75 a barrel. International Brent crude futures spiked higher last month in response to tension in the Middle East but are under pressure from a shift in policy by the OPEC+ group, of which Nigeria is a member, to regain market share rather than curtail supply. 'Achieving the government's 2025 budget targets will require additional measures, largely reflecting the drop in oil prices compared to when, when the budget was approved,' Schimmelpfennig said in a briefing to journalists. 'Keeping the fiscal deficit a percent of GDP unchanged, compared to 2024 will be important to support the fight against inflation,' he added. Recouping fuel subsidy savings and making administrative gains could mobilize some domestic revenues, but the central bank needed to maintain a tight stance and a positive real rate to bring down inflation and support stability, the Fund said. It said savings from fuel subsidies would amount to 2 percent of 2024 GDP. Asked about the naira currency and Nigeria's FX markets, Schimmelpfennig said reforms by the government and central bank had been far reaching and fundamental with the result supply and demand was more in balance. 'When we talk to investors, they're happy. They can invest in Nigeria, and when they want, they can bring their proceeds out,' he said. 'You look at the parallel market and the official rate, they're aligned.'
Reuters
02-07-2025
- Business
- Reuters
Nigeria needs to recalibrate its budget for lower oil prices, says IMF
LONDON, July 2 (Reuters) - Nigeria needs to adapt its 2025 budget to lower oil prices and scale up cash transfers to shield the most vulnerable parts of its population, the International Monetary Fund said on Wednesday. Releasing the results of its routine "Article IV" assessment of Nigeria's economic policies, the IMF said economic growth had been steady but too low in per capita terms with inflation remaining high. The Fund predicted that the country's economy would expand at 3.4% this year and 3.2% in 2026. "The international economic environment that Nigeria lives in and operates in is marked by the very, very large uncertainty, and in particular, international oil price volatility impacts Nigeria directly through the fiscal and the external balances as well as inflation," said Axel Schimmelpfennig, the Fund's mission chief for Nigeria. The complex outlook made it more important than ever for policymakers to build and maintain buffers while being nimble and ready to respond to shocks or seize opportunities, he said. "Turning to our policy messages, the key challenge now is to tackle high poverty and food insecurity." Africa's largest oil exporter had assumed a price of $75 per barrel in its 2025 budget. Brent crude futures last traded at just over $68 a barrel.
Zawya
21-04-2025
- Business
- Zawya
IMF decries high poverty rate, food insecurity in Nigeria
The International Monetary Fund (IMF) has expressed concern over the high poverty rate and food insecurity in Nigeria, despite the modest gains achieved by the Federal Government through various reforms implemented so far. However, the IMF commended Nigeria for taking important steps to stabilise the economy, enhance resilience, and support growth. The Fund warned that the country's macroeconomic outlook remains highly uncertain, as elevated global risk sentiment and lower oil prices could impact the Nigerian economy. A team from the IMF, led by Axel Schimmelpfennig, IMF Mission Chief for Nigeria, visited Lagos and Abuja from 2 to 15 April to hold discussions for the 2025 Article IV Consultations with Nigeria. At the end of the visit, Mr Schimmelpfennig issued a statement saying, 'The Nigerian authorities have taken important steps to stabilise the economy, enhance resilience, and support growth. 'The financing of the fiscal deficit by the central bank has ceased, costly fuel subsidies have been removed, and the functioning of the foreign exchange market has improved. 'However, these gains have yet to benefit all Nigerians, as poverty and food insecurity remain high. 'The outlook is marked by significant uncertainty. Elevated global risk sentiment and lower oil prices impact the Nigerian economy. 'The reforms implemented since 2023 have placed the Nigerian economy in a stronger position to navigate this external environment.' Looking ahead, the IMF advised the Federal Government to adjust its macroeconomic policies to further strengthen buffers, reduce inflation, and enhance resilience, while creating enabling conditions for private sector-led growth. 'The authorities communicated to the mission that they will implement the 2025 budget in a manner that is responsive to the decline in international oil prices. A neutral fiscal stance would support monetary policy in bringing down inflation,' the IMF stated. The IMF further advised that, to safeguard key spending priorities, fiscal savings from the removal of fuel subsidies should be channelled into the budget. 'In particular, adjustments should protect critical, growth-enhancing investments while accelerating and broadening the delivery of cash transfers under the World Bank-supported programme to provide relief to those experiencing food insecurity. 'A tight monetary policy stance is required to firmly guide inflation down. The Monetary Policy Committee's data-dependent approach has served Nigeria well and will help navigate elevated macroeconomic uncertainty. 'Announcing a disinflation path to serve as an intermediate target can help anchor inflation expectations,' the IMF said. The IMF team that visited Nigeria for consultations met with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Minister of Agriculture and Food Security, Abubakar Kyari; the Central Bank of Nigeria Governor, Yemi Cardoso; senior government and central bank officials; the Ministry of the Environment; the private sector; academia; labour unions; and civil society. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Zawya
18-04-2025
- Business
- Zawya
International Monetary Fund (IMF) Staff Completes 2025 Article IV Mission to Nigeria
The Nigerian authorities have taken important steps to stabilize the economy, enhance resilience, and support growth. These reforms have put Nigeria in a better position to navigate the external environment. The macroeconomic outlook is marked by significant uncertainty. Elevated global risk sentiment and lower oil prices impact the Nigerian economy. Macroeconomic policies need to further strengthen buffers and resilience, reduce inflation, and support private sector-led growth. An International Monetary Fund team, led by Axel Schimmelpfennig, IMF mission chief for Nigeria, visited Lagos and Abuja on April 2–15 to hold discussions for the 2025 Article IV Consultations with Nigeria. The team met with Minister of Finance and Coordinating Minister of the Economy Wale Edun, Minister of Agriculture and Food Security Abubakar Kyari, Central Bank of Nigeria Governor Yemi Cardoso, senior government and central bank officials, the Ministry of the Environment, the private sector, academia, labor unions, and civil society. At the end of the visit, Mr. Axel Schimmelpfennig, issued the following statement: 'The Nigerian authorities have taken important steps to stabilize the economy, enhance resilience, and support growth. The financing of the fiscal deficit by the central bank has ceased, costly fuel subsidies were removed, and the functioning of the foreign exchange market has improved. Gains have yet to benefit all Nigerians as poverty and food insecurity remain high. 'The outlook is marked by significant uncertainty. Elevated global risk sentiment and lower oil prices impact the Nigerian economy. The reforms since 2023 have put the Nigerian economy in a better position to navigate this external environment. Looking ahead, macroeconomic policies need to further strengthen buffers and resilience, while creating enabling conditions for private sector-led growth. 'The authorities communicated to the mission that they will implement the 2025 budget in a manner that is responsive to the decline in international oil prices. A neutral fiscal stance would support monetary policy to bring down inflation. To safeguard key spending priorities, it is imperative that fiscal savings from the fuel subsidy removal are channeled to the budget. In particular, adjustments should protect critical, growth-enhancing investment, while accelerating and broadening the delivery of cash transfers under the World Bank-supported program to provide relief to those experiencing food insecurity. 'A tight monetary policy stance is required to firmly guide inflation down. The Monetary Policy Committee's data-dependent approach has served Nigeria well and will help navigate elevated macroeconomic uncertainty. Announcing a disinflation path to serve as an intermediate target can help anchor inflation expectations.' Distributed by APO Group on behalf of International Monetary Fund (IMF).
