Nigeria: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nigeria

IMF Staff Country Reports, February 16, 2023

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Nigeria’s economy has recouped the output losses sustained during the coronavirus disease 2019 pandemic supported by favorable oil prices and buoyant consumption activities.
Gross domestic product adjusted for inflation has already reached its pre-crisis level.
The third quarter of 2022 marked the eighth consecutive quarter of positive growth—despite continued challenges in the oil sector.
Growth is estimated at 3 percent for 2022.

Headline inflation declined in December 2022 for the first time in 11 months, but at 21.3 percent remains high.
Drivers of inflation identified: elevated international food prices, large parallel market premiums and monetary policy accommodation.
Central Bank of Nigeria actions:
- Raised the Monetary Policy rate (MPR) by a cumulative 500 basis points in 2022.
- Raised the MPR by another 100 bps in January 2023.
Despite these increases, inflation remains above the MPR.

Near-term outlook faces downside risks, while there are upside risks in the medium term.
Specific downside risks highlighted:
- Higher international food and fertilizer prices.
- Continued widening of the parallel market premium, which could culminate in the de-anchoring of inflation expectations.
- Oil sector downside from possible production and price volatility.
- Climate-related natural disasters (e.g., floods) posing risks to agricultural production.