Why Nigeria’s Economic and Agricultural Reforms are Falling Short: Insights from the IMF and Stakeholders

IMF Report Highlights Struggles with Reforms

The International Monetary Fund (IMF) recently released its sub-Saharan Africa outlook report, painting a grim picture of Nigeria’s economic reform progress. Despite 18 months of federal government reforms, the country remains mired in underperformance, struggling to yield tangible positive outcomes.

The report highlighted a regional average economic growth rate of 3.6% for 2024. Nigeria, however, lagged behind at 3.19%, with inflation and exchange rate instability further eroding economic stability. Catherine Patillo, IMF Deputy Director, noted that while some African nations such as Ghana, Côte d’Ivoire, and Zambia are witnessing improved macroeconomic indicators, Nigeria’s challenges—rising inflation, currency depreciation, and heavy debt burdens—persist.

Patillo observed, “Inflation remains in double digits in almost one-third of countries, including Angola, Ethiopia, and Nigeria, where monetary policies are not effectively anchored by exchange rate pegs.” Furthermore, Nigeria’s inflation rate of 33.8% far exceeds the 21% target for 2024. The IMF also cited Nigeria as one of the countries most affected by a rising debt burden, with interest payments absorbing over 20% of national revenue, leaving little for developmental spending.

The report noted that political and social resistance to reforms, coupled with weak financing conditions, hampers Nigeria’s ability to join the ranks of countries experiencing significant improvements.

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Agricultural Reforms: Stakeholders Voice Concerns

Stakeholders in Nigeria’s agricultural sector also expressed dissatisfaction with the impact of the federal government’s reforms on food production and security. Despite President Bola Tinubu’s declaration of a state of emergency on food production, organizations like ActionAid Nigeria and the All Farmers Association of Nigeria (AFAN) have criticized the slow and inconsistent implementation of these policies.

Challenges in the Food Sector

Andrew Mamedu, Country Director of ActionAid Nigeria, noted that despite policy efforts, Nigeria remains one of the most food-insecure nations globally. According to the World Bank’s 2024 Food Security Report, Nigeria ranks third in Africa for food insecurity. Mamedu highlighted several impediments, including high input costs, limited access to credit, farming insecurity, and logistical bottlenecks.

“Although budget allocations to agriculture and attempts to stabilize exchange rates are commendable steps, the harsh realities faced by Nigerian farmers, such as insecurity and inadequate infrastructure, undermine any progress,” Mamedu said.

ActionAid recommended prioritizing smallholder farmers, increasing budgetary allocations, and subsidizing organic agriculture to address food insecurity and poverty sustainably.

The Need for Comprehensive Policy Execution

Jerry Olanrewaju, Team Lead at Jet FarmNG, called the reforms “largely aspirational,” emphasizing the absence of a clear, actionable framework. He observed that while policies like the National Agricultural Technology and Innovation Policy (NATIP) and the proposed National Agricultural Development Fund (NADF) hold potential, slow funding and bureaucratic inefficiencies stymie progress.

“To ensure tangible results, reforms must focus on measurable indicators such as food prices, arable land cultivation, and food production. Policies should avoid short-term fixes and aim for long-term sustainability,” Olanrewaju added.

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Successes and Aspirations

While the broader economic and agricultural reforms face criticism, some stakeholders acknowledge minor achievements. Nkechi Okafor, AFAN’s Federal Capital Territory Chairperson, highlighted direct access to farm inputs as a positive development. According to her, ensuring consistent farmer engagement and equitable distribution of resources could mark a turning point for Nigeria’s agriculture.

Okafor noted, “If these efforts are maintained and expanded, the administration can build a solid foundation for food and nutrition security. However, full policy implementation remains critical.”

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A Path Forward: Recommendations from Experts

The IMF and agricultural stakeholders outlined several recommendations for addressing Nigeria’s challenges:

1. Rethink Reform Strategies: The IMF emphasized the need for pro-growth coalitions, better communication, compensatory measures, and rebuilding trust in public institutions.

2. Invest in Agriculture: ActionAid called for a minimum 10% budget allocation for agriculture in 2025, focusing on smallholder farmers, rural infrastructure, and climate-resilient practices.

3. Streamline Bureaucracy: Policies like NATIP should prioritize implementation over the creation of new frameworks.

4. Support Farmers Directly: Stakeholders advocated for targeted subsidies, improved access to credit, and investments in post-harvest storage facilities.

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Conclusion

Nigeria’s economic and agricultural reforms face significant hurdles, from policy resistance to implementation gaps and systemic inefficiencies. While there are signs of promise, the government must address these issues holistically to unlock the country’s potential. Strategic investments, transparent policies, and inclusive reforms could pave the way for sustainable growth and food security. Without these critical changes, Nigeria risks falling further behind its regional counterparts.

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