Nigeria development update, December 2023

The Government of Nigeria avoided a fiscal cliff by implementing bold reforms, including ending the gasoline (premium motor spirit, PMS) subsidy, and shifting to a unified, market-reflective foreign exchange (FX) rate. These essential reforms entail painful adjustments. They have led to an increase of retail gasoline prices by an average of 163%. The naira has depreciated against the US dollar by approximately 41 % in the official market and by about 30% in the parallel market. To reap the benefits of the bold reforms and difficult but necessary economic adjustments now underway, it is essential to sustain and fully implement the reforms and take complementary actions. This is the key message from the December 2023 edition of the Nigeria Development Update, titled “Turning the Corner”. The report adds that the recently launched cash transfer intervention to cushion the impact of increased gasoline prices on the poor and vulnerable is providing welcome relief to a growing number of households, with 5 million households expected to be covered by the end of December.