Nigeria must battle food insecurity as priority — IMF

…Says capping fuel prices, low electricity tariffs could cost Nigeria 3% of GDP…We must go into production to escape hardship — Governors…How Nigeria can stabilize forex, overcome economic woes — Moghalu

ABUJA —The International Monetary Fund, IMF, yesterday asked the Federal Government to pay immediate attention to food insecurity in the country.

The IMF’s position came on a day governors said Nigeria must go into production if it must get the people out of the current hardship.

At the 16th Edition of the Leadership Annual Conference and Awards, the IMF made its position known in its End-of-Mission statement issued after the completion of the IMF Staff 2024 Article IV Mission to Nigeria.

This is even as former Anambra State governor and 2023 presidential candidate of Labour Party, LP, Mr Peter Obi, who decried the hardship in the country, said he was not desperate to be president but “desperate to make Nigeria work.”

Also, former Deputy Governor (Financial Stability) of the Central Bank of Nigeria, CBN, Professor Kingsley Moghalu, advocated the sale of government assets to raise funds, totalling $18-20 billion, which could be channelled into bolstering foreign reserves to stabilize forex and overcome economic woes.

However, President Bola Tinubu urged Nigerians to be patient, assuring them that his economic reforms will stabilize the country.

President Tinubu, Obi and Moghalu also spoke at the Leadership annual event, which served as a stage for political figures, statesmen and other dignitaries to highlight the importance of increasing productivity as a means of elevating Nigeria from her current state of hardship and steering her toward economic stability and strength.

Address food insecurity with immediate priority, IMF tells FG

Echoing the governors, the IMF said addressing food insecurity should be an immediate priority of the Federal Government.

Stating that the new government inherited a difficult economic situation marked by low growth, low revenue collection, accelerating inflation, and external imbalances built up over the years, IMF said: “Addressing food insecurity is the immediate priority. The recent approval of a well-targeted and effective social protection system is an important step towards addressing food insecurity in Nigeria, and its implementation will be crucial.”

It said the decision by the Monetary Policy Committee, MPC, to further tighten monetary policy would help contain inflation and pressures on the Naira.

The statement said an IMF team, led by Axel Schimmelpfennig, IMF Mission Chief for Nigeria, visited Lagos and Abuja from February 12 to 23, 2024, to hold discussions for the 2024 Article IV Consultations with Nigeria.

It said the team met with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and Governor of the CBN, Olayemi Cardoso and some other senior government and CBN officials, mnisters and representatives of sub-nationals, private sector, and civil society organisations, CSOs.

Nigeria’s economic outlook challenging

The statement said that at the end of the visit, Schimmelpfennig issued the following statement:
“Nigeria’s economic outlook is challenging. Economic growth strengthened in the fourth quarter, with Gross Domestic Product, GDP, growth reaching 2.8 per cent in 2023. This falls slightly short of population growth dynamics.

“Improved oil production and an expected better harvest in the second half of the year are positive for 2024 GDP growth, which is projected to reach 3.2 per cent, although high inflation, Naira weakness, and policy tightening will provide headwinds.

“With about eight per cent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority. In this regard, staff welcomed the authorities’ approval of an effective and well-targeted social protection system.

“The team also welcomed the government’s release of grains, seeds, and fertiliser, as well as Nigeria’s introduction of dry-season farming.”

Schimmelpfennig said recent improvements in revenue collection and oil production are encouraging.

He said Nigeria’s low revenue mobilisation constrains the government’s ability to respond to shocks and to promote long-term development.

“Non-oil revenue collection improved by 0.8 per cent of GDP in 2023, helped by Naira depreciation. Oil production reached 1.65 million barrels per day in January as a result of enhanced security.”

Dangers of capping fuel prices and electricity tariffs

Schimmelpfennig said the capping of fuel pump prices and electricity tariffs below cost recovery could have a fiscal cost of up to three per cent of GDP in 2024.He said the recently approved targeted social safety net programme that will provide cash transfers to vulnerable households need to be fully implemented.

“This is before the government can address costly implicit fuel and electricity subsidies in a manner that will ensure low-income households are protected.“

The team welcomed the MPC’s decision to further tighten monetary policy. The MPC increased the policy rate by 400 basis points to 22.75 per cent for a total tightening of 1,025 basis points since May 2022.

“This decision should help contain inflation, which reached 29.9 per cent year-on-year in January 2024, and pressures on the naira.”

We must go into production to escape hardship — Govs

Speaking on behalf of his peers, Governor Umar Bago of Niger State focused on the nation’s agricultural potential, underscoring the need to harness it for national prosperity.

He lauded Professor Moghalu’s insights, describing them as “100% very, very correct.”

Governor Bago revealed that Niger State, alone, has attracted over $1 billion in agricultural investments, positioning itself as a potential bread-basket of Africa.

He disclosed that the state has deliberately cleared over a million hectares of land, ready for cultivation against the upcoming rainy season.

Bago announced that President Tinubu was scheduled to visit Niger State between today and Saturday to commission state-of-the-art agricultural machinery from the United States, signalling a significant step towards bolstering the nation’s agricultural sector.

The governor also echoed Mr. Obi’s sentiments that there is no reason for Nigeria to remain in poverty.

He emphasized the need for productivity and denounced the idea of a handout or palliative economy, saying, “you cannot be out of poverty unless you start to produce.”

Governor Bago’s remarks struck a chord with his peers such as Governors Hyacinth Alia (Benue), Dikko Radda (Katsina), Seyi Makinde (Oyo), and Umar Namadi (Jigawa).

As recipients of the ‘Governor of the Year’ award, all five dignitaries collectively vowed to maintain honour and diligence in their governance.

Governor Bago called on the award organizers and leadership circles to retract the accolade from any laureate who failed to embody the principles of honour.

The governors emphasized the importance of integrity, recognizing it as a cornerstone for guiding Nigeria on the path to greater prosperity and autonomy.

Governor Bago said: “We are farmers and we are agrarian. Prof. Kingsley Moghalu spoke very well in his paper, and what he said is 100% correct. Niger State alone can feed Africa. We have attracted an investment of over a billion dollars to Niger State in agriculture.”

How Nigeria can stabilise forex, overcome economic woes — Moghalu

Speaking on the theme: ‘An Economy In Distress; Which Way Forward?’ at the Leadership event, Moghalu outlined key imperative reforms to stabilize Nigeria’s foreign exchange and foster economic resilience.

He proposed careful consideration of a $20-30 billion stabilization package from the IMF, and underscored the importance of weighing the potential benefits and drawbacks of such a move.

Furthermore, the former central banker emphasized the necessity of forming a full-time, highly professional Economic Advisory Council comprising seven economists specializing in critical sectors such as agriculture, industry, labour, business, trade, fiscal policy, and development economics.

This council, he believes, would offer strategic insights crucial for economic transformation.In addition to these measures, Moghalu called for strategic sale of government assets to raise funds totaling $18-20 billion, which could be channelled into bolstering foreign reserves.

He stressed the urgency of President Tinubu assembling a proficient economic team dedicated to driving transformative policies.

Pervasive impact of corruption

Highlighting the pervasive impact of corruption on Nigeria’s governance landscape, Moghalu urged concerted efforts to combat graft and implement robust social security systems aimed at alleviating poverty nationwide.

He called on President Tinubu to overhaul his cabinet and embrace the 24-point private sector Bill of Rights to foster a conducive environment for investment and business growth in the country.

Moghalu emphasized the imperative of strategic thinking and long-term planning to effectively address Nigeria’s economic crisis.

He underscored the need for prioritizing effective governance and meritocracy over corruption, tribalism, and mediocrity to enhance the country’s economic prospects.