IMF advises CBN on how to control rising inflation

The International Monetary Fund (IMF) has advised the Central Bank of Nigeria (CBN) to maintain its current monetary policy rates to control inflation.

The IMF stated this in its newly released World Economic Outlook report titled “A Rocky Recovery” during the ongoing IMF/World Bank Spring meetings in Washington DC.

In the report, IMF retained Nigeria’s growth for 2023 at 3.2 percent but expects it to fall to 3 percent in 2024 when the next administration is in full flow.

Speaking on Nigeria, IMF Division Chief, Research Department, Daniel Leigh said: “For Nigeria, our forecast is one of the most stable ones for this year. We have a slight increase, we have 3.3% in 2022 that’s an upward revision, and for 2023 about the same 3.2% and 3% in 2024.

“So, this is an economy with very high inflation as well and this is why we have a forecast of about 20 per cent for 2023.

Regarding CBN‘s efforts to address inflation, the IMF advised the CBN to continue increasing interest rates as Nigeria’s inflation rate remains at one of its highest levels in history, reaching 21.91% in February 2023, despite the hike in the Central Bank’s Monetary Policy interest rate from 16.5% to 18% in March 2023.

The IMF believes that increasing the interest rate further will help bring down inflation.

Leigh said: “One of our main recommendations is to tighten the monetary policy to ensure that this inflation comes down towards the more target levels.”