- ORIGINAL NEWS
Nigeria battles to halt spiraling currency crisis and rising food insecurity
- SUMMARY
Nigeria is facing severe economic challenges, including high inflation of 29.9%, a plummeting currency, and a cost-of-living crisis that has left many unable to afford food.
The government is implementing reforms, like removing subsidies and relaxing currency controls, which have led to a surge in inflation and economic volatility.
Despite the approval of a social protection system and efforts to boost oil production and agriculture, the IMF warns that food insecurity remains a pressing issue affecting 8% of the population.
The government and central bank are trying to combat inflation by raising interest rates, but the central bank’s governor also points to non-monetary factors and government policy as contributing to the problem.
Data shows that private sector growth is slowing, with a decline in the purchasing managers’ index, indicating that high input costs and shrinking demand are weighing on businesses.
Economic experts forecast modest growth in 2024, but highlight the ongoing challenges of inflation, currency volatility, and uncertainty while emphasizing the importance of addressing price pressures and insecurity.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“The IMF called improvements in government revenue collection and oil production “encouraging,” along with the Central Bank of Nigeria’s recent decision to hike interest rates.”
“Oxford Economics expects real GDP growth of 2.8% in 2024 as improvements in the hydrocarbon sector offset the weakness in the non-oil economy.”
Negative
“Inflation hit an annual 29.9% in January, driven by soaring food prices that have triggered a cost-of-living crisis in Africa’s largest economy.”
“Data last week showed that private sector momentum in Nigeria slowed last month, with the Stanbic IBTC Bank PMI (purchasing managers’ index) dropping to 51.0 from 54.5 in January.”