In Lagos, Nume Ekeghe and Esther Oluku, and in Abuja, Emmanuel Addeh and James Emejo
Wale Edun, the country’s minister of finance and coordination minister of the economy, clarified yesterday why Nigeria has no reason to apply for any loans from the International Monetary Fund (IMF), a global lender, despite rumors that the nation may soon turn to the Bretton Woods organization for assistance.
Additionally, Mr. Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), revealed Monday that the bank plans to create a compliance department by February in order to resolve previous issues, bring the financial sector into line with international norms, and create a more robust and transparent industry.
PricewaterhouseCoopers (PwC), a multinational consulting firm, predicted that Nigeria’s GDP would increase by 3.3% in 2025 as a result of ongoing policy improvements.
Additionally, the firm forecasted a comparatively stable economy, characterized by stable exchange rates bolstered by CBN reforms in the foreign exchange market, which are anticipated to increase capital inflows.
However, Edun clarified in an interview with Arise Television during the World Economic Forum (WEF) in Davos, Switzerland, that Nigeria is currently depending on the World Bank and the African Development Bank (AfDB) for comparatively less expensive borrowing opportunities.
Additionally, he contended that Nigeria will not require the international bank’s short-term funding intervention because it does not have a balance of payments issue.
“I can see the headlines if you happened to mention that Nigeria is asking the IMF for money. However, the truth is that, as a rising nation, we will undoubtedly require money for government spending and for investments in vital infrastructure that will enhance the business-friendly environment. We will also need to borrow money.
“We have utilized the entire range of funds, including comparatively inexpensive assistance from the World Bank, AFDB, and the multilaterals. Our reliance on Nigerian savings stems from our ability to persuade them of the president’s macroeconomic strategy and its potential for commercial and economic expansion as well as for enhancing the business climate.
Naturally, we have also descended upon the Euro bond market, which is the commercial end of finance. So, we’ve covered the entire spectrum. In terms of IMF funding, the organization usually provides funding to address short-term crises and balance of payments problems.
When it comes to Nigeria, our trade balance is favorable. We have money in our current account. Our reserves are increasing. We have improved and increased the reserves by more than $10 billion, the Central Bank Governor recently declared.
In this situation, IMF funding is not the right source. As of right now, we must maximize our assets after making the most use of concessional and multilateral funding.
Equity is what we must use. We must rely on crowding in savings, especially from foreign direct investment brought in by the private sector in Nigeria and around the world. “We must not forget that we have made tremendous progress in enhancing the economic climate at this time,” Edun said.
In spite of this, he acknowledged that food inflation and living expenses are still excessive, stating that in addition to limiting demand, the supply side must also be strengthened in order to minimize inflation.
We do acknowledge and completely address the reality of rather substantial inflation, though. The cost of living is elevated. The price of food is expensive. And while deciding what to do next, Mr. President is concentrating on it. The Central Bank, which controls the monetary tools, including interest rates, is obviously the main cause of the high rate of inflation. Inflation is not limited to the monetary side, though.
“We are all fighting against inflation. There is also more work to be done to increase the supply from a financial standpoint. There is more to lowering a good’s price than merely slowing demand.
Additionally, it has to do with expanding supply. In example, as has occurred during this dry season harvest in Nigeria, with coordinated efforts to supply the various inputs, herbicides, fertilizer, and seeds to smallholders in particular, we are having a decent crop, but more work needs to be done there.
“There is a commitment to increasing food production, so achieving lower food prices, more availability, and affordability of food for Nigerians, that is a major commitment, along with growing the economy as a whole,” Edun said.
Because the necessary reforms have been fully completed and are starting to show results, the minister said that Nigeria was slowly turning the corner and that the economy of this year differs from that of last year.
Once more, the economy is expanding. The overseas reserves are increasing. Similarly, the deficit and debt as a percentage of GDP are declining, as is the debt servicing as a percentage of revenue. As a result, our investment climate is far better now,” the minister continued.
He claims that the vice president’s delegation from Nigeria has met with business professionals in Davos, which will lead to billions of dollars in investments in Nigeria, particularly from those in the fast-moving consumer goods, financial payments, and large international corporations sectors.
“And they have already stated that they are prepared and eager to make these investments right away under the enhanced foreign exchange system and the improved investment climate.
The minister noted, “And we have a number of other bilateral meetings lined up to talk to investors who we hope are going to be making their decisions to invest in the Nigerian economy, create jobs, grow the economy, and help reduce poverty in our country.”
Additionally, he said that President Bola Tinubu is currently receiving a lot of praise and respect for having guided Nigeria’s economy and society away from what he called disastrous, wasteful, and extremely expensive spending on various subsidies.
After achieving that, he promised that Tinubu was committed to go on with the Nigerian economy’s recovery and emphasized that investors would soon begin to pour money into India.
“Once again, in the context of Africa, Nigeria is drawing the most investment in the oil and gas sector. It had already lost ground. It is now again in the spotlight. Other sectors of the Nigerian economy, in my opinion, are experiencing the same issue. All 19 of the main subsectors are expanding. They have improved.
It is imperative to stress that investors, both Nigerian investors as well as foreign direct investors, are waiting in line and prepared to enter. Therefore, I believe that the future holds a better investment climate that would boost Nigeria’s economy’s competitiveness and productivity. It will increase economic growth, generate employment, and lessen poverty.
Speaking of poverty reduction, there is a shared commitment to preserving the social safety net and enhancing the provision of assistance, especially to the most vulnerable and impoverished, through direct benefit transfers and other measures that lower living expenses. Thus, the future seems bright. “The outlook is extremely favorable,” he asserted.
“It will help the telcos operate efficiently,” he said, referring to the recent approval of a 50% increase in telephone charges, which would still be reviewed.
“Well, I agree with you that it’s important to take into account the fact that, over the course of a 12-year period, costs have increased and inflation has occurred. This must naturally be reflected in the telecom companies’ business competition, which is, of course, somewhat regulated in terms of pricing. They aren’t just allowed to impose any tariff they like.
Therefore, the increase in the expense of living must be recognized. However, I believe that 50% is a good place to start. It all comes down to making concessions and deciding when and how to implement some of these changes, which are already required. Furthermore, we want the telecoms, which are an essential part of the Nigerian economy and the infrastructure that is a part of the business climate in Nigeria, to function well in this specific instance.
“We want calls to be ended effectively. We want no missed calls. We are looking for high-quality services. At the same time, we want them to expand, create jobs, and broadly raise the nation’s GDP.
That’s why this fifty percent increase has occurred. And I think that as we move forward, this is a scenario that will be examined from a forward perspective. Review, consultation, and discussion in this area will continue,” he continued.
According to Cardoso, the governor of the Central Bank of Nigeria (CBN), the bank plans to create a compliance department by February. According to him, the action was taken in order to rectify previous issues, bring the financial sector into compliance with international norms, and create a more resilient and transparent industry that might propel the nation’s progress.
In Lagos, Cardoso gave a speech during the release of the Nigerian Economic Summit Group’s (NESG) 2025 Macroeconomic Outlook Report.
By the end of February, the department will be operational, he added, and it will have both an internal and external focus.
He stated that the agency would improve market oversight by keeping an eye on participants to make sure best practices are followed, and penalizing those who don’t.
This project is anticipated to increase investor trust and establish a more reliable and effective financial system.
In addition, the CBN forecasts a 4.17 percent GDP growth in 2025, which would expand on the 3.36 percent increase anticipated in 2024.
The continued execution of governmental reforms, stable crude oil prices, higher domestic oil output, and improved refining capabilities, according to Cardoso, will propel the positive growth trajectory.
has also forecast a 3.3% growth rate for the Nigerian economy in 2025, fueled by ongoing policy reforms. It also predicts a comparatively stable economy with stable exchange rates, bolstered by the apex bank’s FX reforms, which are anticipated to increase capital inflows.
Because of tighter monetary policy and better FX market dynamics, the tax and advisory services firm also predicted that inflation would drop to 26%.
At an executive roundtable on Nigeria’s 2025 Budget and Economic Outlook, which it organized in collaboration with BusinessDay, the firm shared their forecasts.
“GDP growth is projected to rise to 4.17 percent in 2025 from 3.36 percent in 2024,” Cardoso stated. The revival of the Port Harcourt and Warri refineries, higher refining capacity fueled by the Dangote refinery, and steady crude oil prices serve as the foundation for this expansion. Another important factor in sustaining this upward trend will be a steady exchange rate.
He also revealed that by the end of 2024, Nigeria’s foreign exchange reserves had surpassed $40 billion, bolstered by $6 billion in international capital inflows and a rise in oil production. Economic growth will be further stimulated by the country’s oil production, which is expected to reach 2.3 million barrels per day by mid-2025.
He highlighted how the CBN’s foreign exchange policies have improved market efficiency and transparency, pointing to programs like the Electronic Foreign Exchange Matching System (EFEMS) and the Foreign Exchange (FX) Code.
According to the governor of the CBN, “the foreign exchange matching system and the foreign currency disclosure repatriation and investment scheme will improve market efficiency and transparency, lessen the discrepancy between official and Bureau de Change (BDC) exchange rates, and promote market stability.” Our market is currently showing the fruits of many of those initiatives,” he said.
The CBN also started the non-resident BVN program and gave new International Money Transfer Operators (IMTOs) preliminary clearance in order to boost diaspora remittances. The goal of this action is to promote greater interaction with the financial system by giving Nigerians residing overseas access to banking services in their native nation.
“The implementation of the foreign exchange matching system and the foreign currency disclosure repatriation and investment scheme will improve market efficiency and transparency,” declared the speaker. as well as promote market stability by lessening the difference between the official and BDC prices. As of right now, our market is showing the fruits of many of those initiatives.
In order to keep an eye out for market participants and make sure that everyone operating in that market follows best practices, we will undoubtedly fortify our systems to deal with those who don’t comply.
“The bank recently launched the nonresident BVN to allow Nigerians living abroad to access banking services in their place of birth and granted approval in principle to new IMTOs to increase diaspora remittances through formal channels.”
“This is a clear example of recent initiatives and products that we have launched in response to the dialogue we have had with many people overseas, understanding their problems and opportunities they are looking for in Nigeria and being able to make life much easier for them,” he said.
I have every confidence that the outcome will be quite favorable. The effects are already beginning to be felt and seen. Both the overseas remittances and the IMTOs are impressive.
“With over $6 billion in foreign capital inflow into Nigeria’s external reserves surpassing $40 billion in 2024—a major milestone that reflects increased investor confidence—our efforts have paid off. Again, we stress that reserves are increasing in both quantity and quality.
“We want to make sure that the market-oriented policies and reforms will support a more competitive business environment as we move through 2025,” he added. These changes have important ramifications for Nigerian companies, who must adjust to a changing economic environment.
“There is a lot to say about the fact that we are in a situation where the foreign exchange rate has changed. This has drawbacks, particularly for people who rely heavily on imports, but it has also created opportunities, and I see many foreign investors stepping in to take advantage of those opportunities.
Read Also: FG Disburses January Allocation to States, Direct Transfer to Local Governments Falls Short
“As we adjust to the new economic realities, the implications for exports and productive activity are substantial, and our currency is now much more competitive.”
Nigeria’s economy has the capacity to expand at a GDP growth rate of 5.5% with consistent policy reforms, according to Dr. Olusegun Omisakin, Chief Economist and Director of Research and Development at NESG. He underlined that the nation’s economic potential might be unlocked by certain actions.
Nigeria’s resident representative for the International Monetary Fund (IMF), Christian Ebeke, praised the CBN for not giving the Federal Government Ways and Means advances in 2024, calling it a positive step. Policymakers should mitigate the effects of economic reforms on disadvantaged populations, he advised.
PwC, however, voiced worries that the nation’s growth potential might be severely hampered by ongoing economic challenges, pointing out that the CBN was probably going to stick to its monetary tightening policy throughout the year, which would result in higher interest rates in order to ensure long-term price stability.
This could have consequences for firms in terms of increased financing costs, according to Mr. Olusegun Zaccheaus, Partner and Lead for PwC Strategy and Practice in West Africa.
PwC expressed specific concern that major fiscal deficits and substantial debt payment costs could keep fiscal sustainability at a somewhat elevated level.
Zaccheaus also found ways for companies to benefit from export markets in Africa and around the world, improve certain value chains, and adjust to industry consolidation.
The National Bureau of Statistics’ (NBS) ongoing attempts to rebase the nation’s GDP, he claimed, may boost economic growth and lower the debt-to-GDP and tax-to-GDP ratios.
He said, however, that underlying fiscal issues including income shortfalls and growing debt servicing expenses might continue to exist and erode future development prospects.
PwC claims that a revised consumption basket would give monetary authorities a more accurate gauge of changes in living expenses, allowing them to establish suitable interest rates and carry out focused interventions.
Zaccheaus added that although moderate revenue growth was projected, issues with infrastructure and high energy costs could raise production and operating costs.
Additionally, he stated that FX reforms are expected to boost exports and raise Nigeria’s marketability internationally.
He went on to say that while population growth and demographic changes may create chances for digital innovation, youth-oriented industries, energy-efficient data centers, broadband expansion, and 5G adoption, they would also decrease fuel imports due to improved capacity for refining crude oil.
The African Continental Free Trade Area (AfCFTA) and other regional programs provide companies with chances to expand their exports and investigate new markets, he said.
“Value addition for processed agricultural products is becoming more popular, which helps businesses.”
He said that companies should be ready for such shifts and that regulatory capital requirements may be the driving force behind mergers in the banking and insurance industries.
Increasing borrowing costs, he warned, might reduce demand for expensive goods and have an impact on discretionary spending.
Kenneth Erikume, a partner at PwC, also outlined important elements that are anticipated to influence the county’s industrial growth over the medium term, specifically taxation, special agro-industrial processing zones, and agricultural policy reforms.
Erikume stressed that in order to promote growth, it is critical to boost the adoption of compressed natural gas (CNG), small and medium-sized businesses (SMEs), and tourism. The necessity of efforts that make doing business easier in order to draw in investments and promote economic growth was also emphasized by him.
According to Erikume, mining and quarrying—especially the production and export of gemstones—are crucial for sector-specific growth. He advised making investments in surveillance technology to stop illicit mining.
Additionally, he recommended building roads, hospitals, security facilities, and schools in addition to extending the country’s fiber optic network by 90,000 kilometers in order to boost connection and ease trade.
