Nigeria, others at the brink of economic collapse due to inflation, debt, food crisis—IMF

The International Monetary Fund has has said that inflation, debt, and food crisis is pushing the Nigerian economy and other African economies to the verge of collapse. The Managing Director of the IMF, Kristalina Georgieva said this in a report titled, ‘Facing a Darkening Economic Outlook: How the G20 Can Respond.’ The IMF also said that most countries on the continent could raise money from the global financial markets and do not have large domestic markets to turn to. The IMF chief further said that as an immediate step, countries must reverse recently imposed restrictions on food exports. 

She said, “such restrictions are both harmful and ineffective in stabilising domestic prices. Further measures are also needed to strengthen supply chains and to help vulnerable countries adapt food production to cope with climate change. The particularly difficult conditions in many African countries at this moment are important to consider. In my meeting with Ministers of Finance and Central Bank Governors from the continent this week, many highlighted how the effects of this, entirely exogenous, the shock was pushing their economies to the brink. She added, “The effect of higher food prices is being felt acutely as food accounts for a higher share of income. 

Inflation, fiscal, debt and balance of payments pressures are all intensifying. Most are now completely shut out from global financial markets, and unlike other regions don’t have large domestic markets to turn to. Against this backdrop, they are calling on the international community to come up with bold measures to support their people.” The managing director of the Washington-based lender claims that the impact of the conflict in Ukraine on people and the economy has gotten worse, with shocks to commodity prices and an increase in the cost of living creating a crisis for hundreds of millions of people. She claimed that inflation has risen above expectations and has affected more than just the price of food and energy, leading major central banks to announce additional monetary tightening.