IMF calls on Nigeria to tackle hunger, downplays scale of crisis

The International Monetary Fund (IMF) urged the Nigerian government to immediately address growing food insecurity, as Nigerians grapple with a cost-of-living crisis fuelled by recent economic reforms. But the organization’s quoted figure appears to downplay the severity of the problem.

The removal of fuel subsidies and liberalization of currency controls, while welcomed by the IMF and the World Bank, have led to inflation soaring at its fastest pace in almost 30 years. Annual food price inflation exceeded 35%, leaving millions of families struggling to feed.

This has triggered protests and looting of food reserves in parts of the country. The situation is further compounded by the fact that 60 percent of the population already lives in extreme poverty.

The IMF says the government should prioritise food security but put the scale of those in need at just about 8% of the population.

“With about 8 percent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority,” it said in a statement Monday.

Taming inflation

In an attempt to curb inflation and stabilize the naira, the Nigerian central bank last week raised interest rates to a record high of 22.75%.

While acknowledging the central bank’s efforts, the IMF praised the government’s plan to provide cash transfers to vulnerable households as “an important step toward addressing this and implementation will be crucial.”

The government says it will pay N25,000 to 12 million households. Monthly wage in the country is N30,000 but the price of rice, a staple in Nigeria, is over N75,000 for a 50kg bag.

“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 fertilizers, as well as Nigeria’s introduction of dry-season farming,” IMF said.

“The recently approved targeted social safety net program that will provide cash transfers to vulnerable households needs to be fully implemented before the government can address costly, implicit fuel and electricity subsidies in a manner that will ensure low-income households are protected.”