The International Monetary Fund (IMF) has blamed the downgrade of Nigeria’s economic growth particularly on the effects of recent inflation, flooding and oil production setbacks.

In its World Economic Outlook (WEO) published on Tuesday, the Bretton Wood institution noted that Nigeria’s economy has grown in the last two quarters despite inflation and the weakening of the local currency, however, this could only translate to 2.9 percent in 2024 and 3.2 percent in 2025.

“Nigeria’s economy in the first and second quarter of the year grew by 2.98% and 3.19% respectively amid a surge in inflation and further depreciation of the Naira.

“The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023, representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate,” the report seen by Investors King shows.

The spokesperson for IMF’s Research Department, Mr Jean-Marc Natal, said agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production were key drivers of the revision.

“There has been, over the last year and a half, some progress in the region. You saw, inflation stabilising in some countries, going down even and reaching a level close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.

“In terms of growth, it’s quite uneven, but it remains too low. The other issue is that in the region it is still high. It has stopped increasing, and in some countries already starting to consolidate, but it’s still too high, and the debt service is, correspondingly, still high in the region,” he said.

It also expects to see some changes in Nigeria’s inflation, which has slowed down in July and August before rising to 32.7 percent in September 2024.

“Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.

“However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September,” the report said.

The International Monetary Fund (IMF) has approved a set of reforms that will help it support Low-Income Countries (LICs) from shocks over the long term.

The changes to the lender’s concessional lending facilities were contained in a statement by the IMF on Monday.

The US-based lender said these reforms are detailed in the staff paper “2024 Review of the Poverty Reduction and Growth Trust (PRGT) Facilities and Financing—Reform Proposals.”

The fund said it significantly scaled up support to its low-income members in response to the COVID-19 pandemic and subsequent major shocks.

“The annual lending commitments have risen to an average of SDR 5.5 billion since 2020, compared with about SDR 1.2 billion during the preceding decade,” the statement said.

“Outstanding PRGT credit has tripled since the pandemic’s onset, while funding costs at the SDR interest rate have risen sharply. As a result, the PRGT faces an acute funding shortfall, with its self-sustained lending capacity projected to decline, absent reforms, to about SDR 1 billion a year by 2027, well below expected demand.”

The reforms approved by the IMF’s Executive Board aim at maintaining adequate financial support to low-income countries while restoring the self-sustainability of the PRGT.

“The Executive Board today endorsed a long-term annual lending envelope of SDR 2.7 billion ($3.6 billion) and approved a package of policy reforms and resource mobilization to support that lending capacity.

“The envelope, which is more than twice the pre-pandemic capacity, is calibrated to ensure that the Fund can use its limited concessional resources to continue providing vital balance of payment support to LICs, while supporting strong economic policies and catalyzing fresh financing from other sources.

“The Review includes policy changes that reflect the increasing economic heterogeneity among LICs. A new tiered interest rate mechanism will enhance the targeting of scarce PRGT resources to the poorest LICs, which will continue to benefit from interest-free lending, while better-off LICs will be charged a modest, and still concessional, interest rate,” the statement said.

After a successful bilateral fundraising, and in the context of a robust financial outlook for the Fund, the membership reached consensus on a framework to deploy IMF internal resources to facilitate the generation of PRGT subsidy resources.

Specifically, the fund said SDR 5.9 billion (about $ 8 billion), in 2025 present value terms, is expected to be generated through a framework to distribute GRA net income and/or reserves over the next five years.

This is in addition to bilateral subsidy contributions, the subsidy savings from the new interest rate mechanism, and financing from a proposed further five-year suspension of PRGT administrative expenses reimbursement to the GRA.

Many traders in Kano and Kaduna States have been thrown into worry over blackout.

Those affected, especially small business owners whose means of livelihoods largely depend on the availability of electricity, bemoaned the upsurge in vandalisation of public infrastructure.

This panic is coming as the Transmission Company of Nigeria announced that two towers along its 330kV Shiroro–Kaduna transmission lines 1 and 2 have been vandalised, resulting in damage to parts of both transmission lines.

As a result, some areas of Kano and Kaduna states are experiencing blackouts.

The company received a report of the damage from its Shiroro Regional Office on Friday.

A statement signed by the company’s General Manager of Public Affairs, Ndidi Mbah, indicated that arrangements are underway to deploy the newly acquired “emergency restoration system” to the site, pending the reconstruction of the damaged towers.

Although the company did not explicitly attribute the damage to bandits, it is suspected that they may be involved, particularly in light of the recent killing of 13 farmers in the Shiroro community.

According to TCN, the 330kV transmission line 1 tripped first, followed shortly by the second line while efforts were still ongoing to reclose the first. This prompted the urgent mobilisation of local vigilantes to patrol the lines.

It added that the incident revealed damage to towers T133 and T136, with cables severely damaged at multiple points.

The statement further disclosed that an aerial survey, in collaboration with security operatives, has been conducted, and temporary measures are in place to supply bulk power to the Kaduna and Kano regions via the 330kV Kaduna–Jos transmission line.

Mbah said arrangements are in top gear to deploy the newly procured ’emergency restoration system’ to the site, pending the reconstruction of the damaged towers.

He added that TCN has also conducted an aerial survey in collaboration with security operatives, given the area’s vulnerability to banditry, which poses a significant threat to both TCN installations and personnel.

A trader in Kano who identified himself as Usman, urged TCN to intensify efforts in restoring electricity to the affected areas so that more harm would not be done to businesses.