The International Monetary Fund (IMF) has warned that the persistent rise in the cost of essential goods and services could push more Nigerians into poverty, highlighting the growing pressure on household incomes amid elevated inflation and economic adjustment reforms.
The Fund noted that increasing prices of food, transportation, healthcare and other basic necessities continue to erode purchasing power, leaving many households struggling to meet their daily needs despite signs of macroeconomic improvement.
According to the IMF, while ongoing economic reforms are aimed at restoring fiscal stability and strengthening long term growth, their short term impact has placed considerable strain on vulnerable populations, making targeted social protection measures increasingly important.
The institution urged policymakers to sustain reforms that promote economic stability while expanding support programmes for low income households to cushion the effects of rising living costs. It stressed that strengthening social safety nets would help protect the most vulnerable as the economy adjusts.
Economic analysts said inflation remains one of the biggest threats to household welfare, with higher prices reducing disposable income and limiting consumer spending. They noted that prolonged inflation could weaken domestic demand, slow business activity and widen income inequality if left unchecked.
The IMF also highlighted the need for policies that encourage private sector investment, improve agricultural productivity and enhance job creation to support inclusive economic growth. Increasing domestic production, experts said, would help reduce supply constraints and moderate inflation over time.
Businesses have also faced mounting operational costs due to higher energy prices, exchange rate volatility and rising logistics expenses, leading many firms to pass additional costs on to consumers. This has further intensified the cost of living challenges across the country.
Despite the near term pressures, the IMF maintained that consistent implementation of structural reforms, improved fiscal management and a stable macroeconomic environment remain essential to achieving sustainable growth and reducing poverty over the long term.
The Fund emphasised that balancing economic reforms with effective social support policies will be critical to ensuring that Nigeria’s recovery translates into improved living standards and broader economic opportunities for its growing population.
SOURCE: VANGUARD
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