Nigerians are getting poorer despite the countrys slow recovery from
\nrecession, and economic reforms are urgently needed, the International
\nMonetary Fund (IMF) said in a report seen by Reuters on Wednesday.<\/p>\n
The Fund expects the government to muddle through in the medium term,
\nand any progress could also be threatened if elections next year consume
\npolitical energy and resources, the report said.<\/p>\n
Since emerging from recession in the second quarter of 2017, Nigerian
\nofficials have repeatedly boasted that they have set the economy back on
\ntrack.<\/p>\n
But critics say much of the recovery comes from a return to oil dependence
\nafter a rise in global oil prices and a rebound in crude production – more
\nthe result of militants in the Niger Delta halting attacks on oil
\nfacilities than of economic policy under President Muhammadu Buharis
\nadministration.<\/p>\n
The IMF said in the report that the outlook for growth has improved but
\nremains challenging.<\/p>\n
Comprehensive and coherent economic policies remain urgent and must not
\nbe delayed by approaching elections and recovering oil prices, it said in
\nits annual Article IV review of Nigerias economy.<\/p>\n
Higher oil prices would support a recovery in 2018 but a muddle-through
\noutlook is projected for the medium term under current policies, with
\nfiscal dominance and structural constraints leading to continuing falls in
\nreal GDP per capita, the IMF said.<\/p>\n
In the report, it identified risks to growth including additional delays
\nto implementing policies and reforms ahead of 2019 elections, security
\ntensions, and oil prices, a fall in which could see capital flows
\nreversed.<\/p>\n
Further delays in policy action — including because of pre-election
\npressures — can only make the inevitable adjustment more difficult and
\ncostlier, the report said.<\/p>\n
EXCHANGE RATE CONFUSION
\nThe lender repeated its call for Nigeria to simplify its complex foreign
\nexchange system, a bugbear for the IMF for more than a year which has left
\nlarge gaps between official rates and various windows that certain groups
\ncan use to get other rates.<\/p>\n
Moving towards a unified exchange rate should be pursued as soon as
\npossible, the IMF said. (IMF) staff does not support the exchange
\nmeasures that have given rise to the exchange restrictions and multiple
\ncurrency practices.<\/p>\n
The Fund further singled out the central bank, saying it should
\ndiscontinue direct interventions in the economy.<\/p>\n
The Central Bank of Nigeria (CBN) frequently injects hundreds of millions
\nof dollars into the foreign exchange market to keep its own rates stable.<\/p>\n
Commercial banks struggling to remain solvent were also called out, but
\nnot identified by the IMF, including one that the lender said was already
\ninsolvent: Some of these banks are kept afloat through continuous
\nrecourse to the CBNs lending facilities.<\/p>\n
The IMF said it does not comment on purported leaks. A spokeswoman for the
\nFund said a statement would be issued after the lenders board meets to
\ndiscuss its assessment on Friday.<\/p>\n
A Nigerian finance ministry spokeswoman did not immediately respond to a
\nphone call and email requesting comment.<\/p>\n
Nigerians are getting poorer despite the countrys slow recovery from recession, and economic reforms are urgently needed, the International Monetary Fund (IMF) said in a report seen by Reuters on…<\/p>\n","protected":false},"author":1,"featured_media":46145,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-61065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n