The International Monetary Fund has said more Nigerians have gotten
poorer under the President Muhammadu Buhari government despite the
country’s slow recovery from recession. In a report released yesterday, the IMF said Nigeria needs urgent
economic reforms. It identified risks to growth, including additional
delays to implementing policies and reforms ahead of the 2019 elections,
security tensions, and oil prices, a fall in which could see capital
flows reversed.
The IMF however said that though the outlook for growth had improved, it still remained challenging.
The Central Bank of Nigeria frequently injects hundreds of millions
of dollars into the foreign exchange market to keep its own rates
stable.
The IMF further singled out the central bank, saying it should discontinue direct interventions in the economy.
The IMF further repeated its call for Nigeria to simplify its complex
foreign exchange system which has left large gaps between official
rates and various windows that certain groups can use to get other
rates.
“Moving towards a unified exchange rate should be pursued as soon as
possible. The IMF does not support the exchange measures that have given
rise to the exchange restrictions and multiple currency practices,” the
report stated.
“Comprehensive and coherent” economic policies “remain urgent and
must not be delayed by approaching elections and recovering oil prices,”
it stated in its annual Article IV review of Nigeria’s economy.
“Further delays in policy action, including because of pre-election
pressures, can only make the inevitable adjustment more difficult and
costlier.
“Higher oil prices would support a recovery in 2018 but a
‘muddle-through’ outlook is projected for the medium term under current
policies, with fiscal dominance and structural constraints leading to
continuing falls in real GDP per capita,” the report added.