The International Monetary Fund (IMF) has highlighted near-term downside risks resulting from Nigeria’s elevated inflation, high debt-servicing costs, external sector pressures, and oil sector volatility as the current cash crunch continues to affect business activities with a likelihood of lowering the inflation rate in the short term.
According to information acquired by The Guardian, the lack of naira has actually caused food prices at important farm produce marketplaces around the nation to drop dramatically. The IMF asserts that in order to prevent a de-anchoring of inflation expectations, there is a need for decisive and effective monetary policy tightening. It points out that higher international food and fertilizer prices as well as the continued widening of the parallel market premium may lead to this outcome.
They asked the government to follow through on its commitment to remove fuel subsidies by mid-2023 and to increase well-targeted social spending. The IMF called on the authorities to strengthen revenue mobilization, including thorough tax administration reforms, expanding the tax automation system and strengthening taxpayer segmentation, and improving tax compliance is also a priority.
The Guardian learned that grain prices have dropped by 50 percent as farmers become desperate.