The International Monetary Fund (IMF) has raised fresh concerns over Nigeria’s deepening cost-of-living crisis, warning that soaring transport expenses are significantly driving food inflation and worsening economic hardship across the country.
Speaking during a media briefing at the IMF/World Bank Spring Meetings in Washington, the Director of the IMF’s African Department, Abebe Selassie, explained that rising logistics and transportation costs are placing additional pressure on already strained supply chains. According to him, these cost increases are rapidly feeding into higher food prices, which make up a large share of household spending in Nigeria.
Selassie noted that recent fuel price hikes—largely influenced by global oil market trends—have sharply increased transportation costs nationwide. This, in turn, has pushed up the prices of essential goods, especially food, intensifying inflationary pressures and reducing purchasing power for many households.
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He added that both urban and rural communities are feeling the impact, as higher transport fares affect the movement of goods from farms to markets. The resulting increase in distribution costs has compounded existing challenges within Nigeria’s food system, including expensive agricultural inputs like fertilisers and persistent supply bottlenecks.
Despite these pressures, Selassie acknowledged that ongoing fiscal and debt reforms by the Nigerian government are beginning to strengthen economic resilience. He said recent efforts to stabilise public finances are creating limited buffers that could help cushion the impact of global economic shocks on vulnerable populations.
However, he cautioned policymakers to strike a careful balance. While short-term relief measures may be necessary to ease current hardships, they must not undermine long-term fiscal sustainability or derail broader economic reforms.
On debt management, Selassie emphasised that the priority should be maintaining sustainable debt levels relative to repayment capacity, rather than focusing solely on whether borrowing is domestic or external. He stressed that prudent borrowing decisions and effective debt strategies are critical to preserving macroeconomic stability and investor confidence.
Also speaking, Amadou Sy highlighted that progress under the African Continental Free Trade Area has been uneven, urging stronger reforms to unlock its full potential for economic growth and resilience.
