World Bank
The World Bank has emphasised the need for the Central Bank of Nigeria (CBN) to sustain efforts to combat rising inflation, which hit 34.8% in December, up from 33.6% in November.
Speaking at the 2025 Macroeconomic Outlook launch hosted by the Nigerian Economic Summit Group (NESG), Senior Economist for Nigeria at the World Bank, Sameer Matta called for continued focus on inflationary pressures while addressing structural issues in agriculture, trade policy, and supply chains.
CBN’s Role in Inflation Control
Matta highlighted the critical importance of maintaining monetary policy discipline to rein in inflation. He suggested targeted interventions such as improving agricultural productivity, strengthening rural-urban trade linkages, and reassessing trade tariffs to encourage local production while managing short-term impacts.
“Inflation control is key. The central bank must remain focused on ensuring price stability while exploring solutions to improve supply-side dynamics, particularly in agriculture and trade,” Matta said.
Reform Imperatives
Matta also underscored the high economic cost of delayed reforms, citing fuel and foreign exchange subsidies as significant drains on Nigeria’s gross domestic product (GDP).
“The cost of not implementing reforms is staggering—about 5% of GDP, with 2% tied to fuel subsidies and another 2% to FX subsidies,” Matta noted, likening the reform process to making tough medical decisions to stabilise a critical patient.
He emphasised the need to expand social protection programs, including cash transfers, to cushion the vulnerable population most affected by the reforms.
“Accelerating these interventions through transparent, digital platforms is critical for effective targeting and preventing misuse,” he added.
IMF Advocates Policy Coordination
Nigeria’s country representative for the International Monetary Fund (IMF), Christian Ebeke echoed Matta’s views, stressing the importance of synergy between fiscal and monetary authorities in tackling inflation.
Ebeke highlighted the progress made in eliminating the “Ways and Means” overdraft system, which previously fuelled inflation and liquidity challenges.
“The absence of new Ways and Means financing has tightened financial conditions and reduced money in circulation,” he said, applauding both fiscal and monetary authorities for their efforts.
He also emphasised addressing the redistributive consequences of key reforms such as the removal of fuel subsidies and naira adjustments. “Fiscal authorities must ensure social protection measures are implemented swiftly to mitigate the impact on vulnerable populations,” he stated.
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Structural and Transparency Gains
Ebeke lauded the securitisation of outstanding liabilities, noting its role in improving transparency and spreading maturities. He emphasised that continued fiscal prudence and CBN independence would help alleviate macroeconomic pressures, stabilise the parallel exchange rate, and further curb inflation.
Outlook
With Nigeria’s inflationary environment driven by food prices, foreign exchange dynamics, and structural inefficiencies, experts agree that sustained reforms and coordination between fiscal and monetary authorities are essential for achieving macroeconomic stability.
Global Digest
