{
  "title": "IMF Executive Board Concludes 2020 Article IV Consultation with Nigeria",
  "publication": "IMF News, February 8, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation",
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  "summary": "1 Gross debt figures for the Federal Government and the public sector include overdrafts from the Central Bank of Nigeria (CBN) and AMCON bonds. 2 Includes both public and private sector.",
  "publishDate": "2021-02-08",
  "sections": [
    {
      "heading": "Macroeconomic impact of COVID-19 and near-term outlook",
      "content": "- Real GDP is estimated to have contracted by 3.2 percent in 2020 amidst the pandemic-related lockdown.\n- Headline inflation rose to 14.9 percent in November 2020, a 33-month high.\n- Unemployment rate reached 27 percent in the second quarter of 2020; youth unemployment at 41 percent.\n- Pandemic-related support package equivalent to 0.3 percent of GDP was adopted in the 2020 revised federal budget.\n- Nigeria received IMF emergency financial assistance of $3.5 billion under the Rapid Financing Instrument in April 2020.\n- External vulnerabilities increased due to lower oil prices and weak global demand; the current account remained in deficit in the first half of 2021.\n- Socio-economic conditions deteriorated: rising food inflation, elevated youth unemployment, mass protests in October 2020, and surveys show worsening food insecurity with significant impact on the vulnerable.\n- Risks are tilted to the downside, including:\n  - resurgence of the pandemic,\n  - security situation,\n  - unfavorable external environment,\n  - capital outflow risks from record-low domestic interest rates and large foreign holdings of domestic securities.\n- Upside factors include recovering oil prices and completion of the Dangote oil refinery potentially catalyzing more domestic crude oil production and boosting growth."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors commended measures to address health and economic impacts of COVID-19 and emphasized need for urgent policy adjustment and more fundamental reforms to sustain macroeconomic stability and lift growth and employment.\n- Fiscal policy and revenue:\n  - Welcomed reforms including removal of the fuel subsidy and steps toward cost-reflective tariff increases in the power sector.\n  - Stressed the need for significant revenue mobilization to reduce fiscal sustainability risks, relying initially on progressive and efficiency-enhancing measures with higher tax rates awaiting a more sustained economic recovery.\n  - Highlighted need for improved social safety nets to cushion potential negative impacts on the poor.\n- Exchange rate and external sector:\n  - Noted multiple rates, limited flexibility, and foreign exchange shortages are posing challenges.\n  - Recommended a gradual and multi-step approach to establishing a unified and clear exchange rate regime with near-term focus on allowing for greater flexibility and removing the payments backlog.\n- Monetary policy and financial stability:\n  - Observed accommodative monetary stance remains appropriate in the near term; tightening may be warranted if balance of payments or inflationary pressures increase.\n  - Recommended that in the medium term, the monetary policy operational framework should be reformed and Central Bank financing of the budget deficit phased out in order to reduce inflation.\n  - While welcoming banking sector resilience, called for continued vigilance to contain financial stability risks.\n  - Stated COVID-19 debt relief measures for bank clients should remain time-bound and limited to those with good pre-crisis fundamentals.\n- Structural reforms and governance:\n  - Welcomed recent progress in structural reforms and called for continued reforms to promote economic diversification, reduce dependence on oil, and increase employment.\n  - Encouraged strengthening governance and anticorruption frameworks, including compliance with AML/CFT measures.\n  - Welcomed the ratification of the African Continental Free Trade Area and underscored that implementing trade-enabling reforms remains critical to rejuvenate growth."
    },
    {
      "heading": "Selected economic and financial indicators, 2017–21 (key figures)",
      "content": "- Real GDP (at 2010 market prices): 2017: 0.8; 2018: 1.9; 2019: 2.2; 2020: -3.2; 2021 (proj): 1.5\n- Oil and Gas GDP: 2017: 4.7; 2018: 1.0; 2019: 4.6; 2020: -10.5; 2021 (proj): 3.0\n- Non-oil GDP: 2017: 0.5; 2018: 2.0; 2019: -2.5; 2020: 1.4\n- Non-oil non-agriculture GDP: 2017: -0.6; 2018: 1.8; 2019: -4.0; 2020: 1.2\n- Production of crude oil (million barrels per day): 2017: 1.89; 2018: 1.93; 2019: 2.00; 2020: 1.80; 2021 (proj): 1.84\n- Nominal GDP at market prices (trillions of naira): 2017: 114.9; 2018: 129.1; 2019: 145.6; 2020: 157.7; 2021 (proj): 183.4\n- Nominal GDP per capita (US$): 2017: 1,969; 2018: 2,033; 2019: 2,230; 2020: …\n- GDP deflator: 2017: 11.1; 2018: 10.2; 2019: 10.4; 2020: 11.8; 2021 (proj): 14.6\n- Non-oil GDP deflator: 2017: 7.1; 2018: 8.5; 2019: 13.0; 2020: 15.0; 2021 (proj): 14.4\n- Consumer price index (annual average): 2017: 16.5; 2018: 12.1; 2019: 11.4; 2020: 13.2; 2021 (proj): 14.8\n- Consumer price index (end of period): 2017: 15.4; 2018: 12.0; 2019: 15.2; 2020: 13.8\n- Gross national savings (Percent of GDP): 2017: 18.2; 2018: 20.8; 2019: 22.4; 2020: 21.8; 2021 (proj): 3.3\n- Public (Percent of GDP): 2017: -0.5; 2018: 0.7; 2019: 0.4; 2020: -1.3; 2021 (proj): -0.2\n- Private (Percent of GDP): 2017: 18.8; 2018: 20.1; 2019: 22.0; 2020: 23.1\n- Investment (Percent of GDP): 2017: 14.7; 2018: 19.0; 2019: 25.4; 2020: 24.6; 2021 (proj): 23.5\n- Current account balance (Percent of GDP): 2017: 2.8; 2018: -3.8; 2019: -3.7; 2020: -2.2; 2021 (proj): -2.3\n- Total revenues and grants (Percent of GDP): 2017: 6.6; 2018: 7.9; 2019: 5.9; 2020: 6.9\n- Total expenditure and net lending (Percent of GDP): 2017: 12.8; 2018: 12.6; 2019: 11.7; 2020: (not specified)\n- Overall balance (Percent of GDP): 2017: -5.4; 2018: -4.3; 2019: -4.8; 2020: -5.9; 2021 (proj): -4.7\n- Non-oil primary balance (Percent of GDP): 2017: -6.7; 2018: -7.2; 2019: -6.8; 2020: -5.6\n- Non-oil revenue (Percent of GDP): 2017: 4.0; 2018: 4.2; 2019: 3.9; 2020: 4.5\n- Public gross debt (Percent of GDP)1: 2017: 25.3; 2018: 27.7; 2019: 29.1; 2020: 34.4; 2021 (proj): 34.3\n  - Of which: FGN debt: 2017: 25.0; 2018: 26.5; 2019: 31.0; 2020: 30.7\n  - Of which: External debt: 2017: 5.0; 2018: 6.4; 2019: 6.2; 2020: 8.4; 2021 (proj): 7.7\n- FGN interest payments (percent of FGN revenue): 2017: 58.4; 2018: 60.7; 2019: 52.6; 2020: 92.6; 2021 (proj): 60.8\n- Interest payments (percent of consolidated revenue): 2017: 20.5; 2018: 19.9; 2019: 35.2; 2020: 23.0\n- Broad money (percent change; end of period): 2017: -1.2; 2018: 9.7; 2019: 17.3\n- Net foreign assets (percent change): 2017: 10.8; 2018: -18.0; 2019: 2.1; 2020: -7.9\n- Net domestic assets (percent change): 2017: -12.0; 2018: 24.5; 2019: 25.2\n- Credit to the private sector (y-o-y,%): 2017: -1.8; 2018: -11.9; 2019: 19.3\n- Velocity of broad money (ratio; end of period): 2017: 3.8; 2018: 3.5\n- Exports of goods and services (annual percent change): 2017: 32.3; 2018: 29.9; 2019: -32.4\n- Imports of goods and services (annual percent change): 2017: 40.6; 2018: 40.7; 2019: -24.0\n- Terms of trade (annual percent change): 2017: 9.4; 2018: 12.4; 2019: -5.1; 2020: -18.2; 2021 (proj): 6.5\n- Price of Nigerian oil (US dollar per barrel): 2017: 54.4; 2018: 71.1; 2019: 64.0; 2020: 42.8; 2021 (proj): 48.0\n- External debt outstanding (US$ billions)2: 2017: 94.8; 2018: 99.2; 2019: 112.4; 2020: 105.5; 2021 (proj): 107.6\n- Gross international reserves (US$ billions): 2017: 39.5; 2018: 38.1; 2019: 29.5\n  - (equivalent months of imports of G&Ss): 2017: 6.0; 2018: 4.4; 2019: 3.1\n\n1 Gross debt figures for the Federal Government and the public sector include overdrafts from the Central Bank of Nigeria (CBN) and AMCON bonds.\n2 Includes both public and private sector.\n\nPress Release No. 21/35 — February 8, 2021; IMF Communications Department.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Nigeria and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation"
    }
  ],
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    "[Markdown version](/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation/index.md)",
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    "[Bundle manifest](/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation/bundle-manifest.json)",
    "Published: February 8, 2021",
    "Real GDP is estimated to have contracted by 3.2 percent in 2020 amidst the pandemic-related lockdown.",
    "Headline inflation rose to 14.9 percent in November 2020, a 33-month high.",
    "Unemployment rate reached 27 percent in the second quarter of 2020; youth unemployment at 41 percent.",
    "Pandemic-related support package equivalent to 0.3 percent of GDP was adopted in the 2020 revised federal budget.",
    "Nigeria received IMF emergency financial assistance of $3.5 billion under the Rapid Financing Instrument in April 2020.",
    "External vulnerabilities increased due to lower oil prices and weak global demand; the current account remained in deficit in the first half of 2021.",
    "Socio-economic conditions deteriorated: rising food inflation, elevated youth unemployment, mass protests in October 2020, and surveys show worsening food insecurity with significant impact on the vulnerable.",
    "Risks are tilted to the downside, including:",
    "Upside factors include recovering oil prices and completion of the Dangote oil refinery potentially catalyzing more domestic crude oil production and boosting growth.",
    "Directors commended measures to address health and economic impacts of COVID-19 and emphasized need for urgent policy adjustment and more fundamental reforms to sustain macroeconomic stability and lift growth and employment.",
    "Fiscal policy and revenue:",
    "Exchange rate and external sector:",
    "Monetary policy and financial stability:",
    "Structural reforms and governance:",
    "Real GDP (at 2010 market prices): 2017: 0.8; 2018: 1.9; 2019: 2.2; 2020: -3.2; 2021 (proj): 1.5",
    "Oil and Gas GDP: 2017: 4.7; 2018: 1.0; 2019: 4.6; 2020: -10.5; 2021 (proj): 3.0",
    "Non-oil GDP: 2017: 0.5; 2018: 2.0; 2019: -2.5; 2020: 1.4",
    "Non-oil non-agriculture GDP: 2017: -0.6; 2018: 1.8; 2019: -4.0; 2020: 1.2",
    "Production of crude oil (million barrels per day): 2017: 1.89; 2018: 1.93; 2019: 2.00; 2020: 1.80; 2021 (proj): 1.84",
    "Nominal GDP at market prices (trillions of naira): 2017: 114.9; 2018: 129.1; 2019: 145.6; 2020: 157.7; 2021 (proj): 183.4",
    "Nominal GDP per capita (US$): 2017: 1,969; 2018: 2,033; 2019: 2,230; 2020: …",
    "GDP deflator: 2017: 11.1; 2018: 10.2; 2019: 10.4; 2020: 11.8; 2021 (proj): 14.6",
    "Non-oil GDP deflator: 2017: 7.1; 2018: 8.5; 2019: 13.0; 2020: 15.0; 2021 (proj): 14.4",
    "Consumer price index (annual average): 2017: 16.5; 2018: 12.1; 2019: 11.4; 2020: 13.2; 2021 (proj): 14.8",
    "Consumer price index (end of period): 2017: 15.4; 2018: 12.0; 2019: 15.2; 2020: 13.8",
    "Gross national savings (Percent of GDP): 2017: 18.2; 2018: 20.8; 2019: 22.4; 2020: 21.8; 2021 (proj): 3.3",
    "Public (Percent of GDP): 2017: -0.5; 2018: 0.7; 2019: 0.4; 2020: -1.3; 2021 (proj): -0.2",
    "Private (Percent of GDP): 2017: 18.8; 2018: 20.1; 2019: 22.0; 2020: 23.1",
    "Investment (Percent of GDP): 2017: 14.7; 2018: 19.0; 2019: 25.4; 2020: 24.6; 2021 (proj): 23.5",
    "Current account balance (Percent of GDP): 2017: 2.8; 2018: -3.8; 2019: -3.7; 2020: -2.2; 2021 (proj): -2.3",
    "Total revenues and grants (Percent of GDP): 2017: 6.6; 2018: 7.9; 2019: 5.9; 2020: 6.9",
    "Total expenditure and net lending (Percent of GDP): 2017: 12.8; 2018: 12.6; 2019: 11.7; 2020: (not specified)",
    "Overall balance (Percent of GDP): 2017: -5.4; 2018: -4.3; 2019: -4.8; 2020: -5.9; 2021 (proj): -4.7",
    "Non-oil primary balance (Percent of GDP): 2017: -6.7; 2018: -7.2; 2019: -6.8; 2020: -5.6",
    "Non-oil revenue (Percent of GDP): 2017: 4.0; 2018: 4.2; 2019: 3.9; 2020: 4.5",
    "Public gross debt (Percent of GDP)1: 2017: 25.3; 2018: 27.7; 2019: 29.1; 2020: 34.4; 2021 (proj): 34.3",
    "FGN interest payments (percent of FGN revenue): 2017: 58.4; 2018: 60.7; 2019: 52.6; 2020: 92.6; 2021 (proj): 60.8",
    "Interest payments (percent of consolidated revenue): 2017: 20.5; 2018: 19.9; 2019: 35.2; 2020: 23.0",
    "Broad money (percent change; end of period): 2017: -1.2; 2018: 9.7; 2019: 17.3",
    "Net foreign assets (percent change): 2017: 10.8; 2018: -18.0; 2019: 2.1; 2020: -7.9",
    "Net domestic assets (percent change): 2017: -12.0; 2018: 24.5; 2019: 25.2",
    "Credit to the private sector (y-o-y,%): 2017: -1.8; 2018: -11.9; 2019: 19.3",
    "Velocity of broad money (ratio; end of period): 2017: 3.8; 2018: 3.5",
    "Exports of goods and services (annual percent change): 2017: 32.3; 2018: 29.9; 2019: -32.4",
    "Imports of goods and services (annual percent change): 2017: 40.6; 2018: 40.7; 2019: -24.0",
    "Terms of trade (annual percent change): 2017: 9.4; 2018: 12.4; 2019: -5.1; 2020: -18.2; 2021 (proj): 6.5",
    "Price of Nigerian oil (US dollar per barrel): 2017: 54.4; 2018: 71.1; 2019: 64.0; 2020: 42.8; 2021 (proj): 48.0",
    "External debt outstanding (US$ billions)2: 2017: 94.8; 2018: 99.2; 2019: 112.4; 2020: 105.5; 2021 (proj): 107.6",
    "Gross international reserves (US$ billions): 2017: 39.5; 2018: 38.1; 2019: 29.5",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Nigeria and the IMF](http://www.imf.org/external/country/NGA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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