## IMF Executive Board Concludes 2020 Article IV Consultation with Nigeria _IMF News, February 8, 2021_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2020 Article IV Consultation with Nigeria](https://www.imf.org/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: February 8, 2021 --- ### Macroeconomic impact of COVID-19 and near-term outlook - 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: - resurgence of the pandemic, - security situation, - unfavorable external environment, - capital outflow risks from record-low domestic interest rates and large foreign holdings of domestic securities. - Upside factors include recovering oil prices and completion of the Dangote oil refinery potentially catalyzing more domestic crude oil production and boosting growth. ### Executive Board assessment and policy recommendations - 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: - Welcomed reforms including removal of the fuel subsidy and steps toward cost-reflective tariff increases in the power sector. - 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. - Highlighted need for improved social safety nets to cushion potential negative impacts on the poor. - Exchange rate and external sector: - Noted multiple rates, limited flexibility, and foreign exchange shortages are posing challenges. - 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. - Monetary policy and financial stability: - Observed accommodative monetary stance remains appropriate in the near term; tightening may be warranted if balance of payments or inflationary pressures increase. - 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. - While welcoming banking sector resilience, called for continued vigilance to contain financial stability risks. - Stated COVID-19 debt relief measures for bank clients should remain time-bound and limited to those with good pre-crisis fundamentals. - Structural reforms and governance: - Welcomed recent progress in structural reforms and called for continued reforms to promote economic diversification, reduce dependence on oil, and increase employment. - Encouraged strengthening governance and anticorruption frameworks, including compliance with AML/CFT measures. - Welcomed the ratification of the African Continental Free Trade Area and underscored that implementing trade-enabling reforms remains critical to rejuvenate growth. ### Selected economic and financial indicators, 2017–21 (key figures) - 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 - Of which: FGN debt: 2017: 25.0; 2018: 26.5; 2019: 31.0; 2020: 30.7 - Of which: External debt: 2017: 5.0; 2018: 6.4; 2019: 6.2; 2020: 8.4; 2021 (proj): 7.7 - 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 - (equivalent months of imports of G&Ss): 2017: 6.0; 2018: 4.4; 2019: 3.1 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. *Press Release No. 21/35 — February 8, 2021; IMF Communications Department.* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2021/02/08/pr2135-nigeria-imf-executive-board-concludes-2020-article-iv-consultation_