Nigeria’s economy on path of recovery- IMF

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Nigeria’s economy on path of recovery- IMF

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The executive board of the International Monetary Fund (IMF) on Thursday said that the Nigerian economy is on the path to recovery but stresses the importance of structural reforms to support economic growth and boost investor confidence.With the conclusion of the 2017 Article IV Consultation with Nigeria, The IMF Executive, emphasized that stronger macroeconomic policies are urgently needed to rebuild confidence and foster an economic recovery.According to reports from Washington, directors welcomed the federal government’s Economic Recovery and Growth Plan (ERGP), which focuses on economic diversification driven by the private sector, and government initiatives to strengthen infrastructure””including the recently adopted power sector recovery plan.However, the board of IMF director’s underlined that without stronger policies these objectives may not be achieved.The Executive Directors also recognized that the Nigerian economy has been negatively impacted by low oil prices and production. They commended the efforts already made by the authorities by increasing fuel prices, raising the monetary policy rate, and allowing the exchange rate to depreciate. These, they said, improved the resilience of the economy.Deliberate steps on how to strengthen the banking sector resilience through stronger prudential requirements were recommended.With the decline of quality asset, they recommended further intensifying bank monitoring, enhancing contingency planning, and strengthening resolution frameworks. Directors encouraged a quick increase of the capital of undercapitalized banks and a time limit on regulatory forbearance.The IMF directors also emphasized that ambitious structural reforms are very effective ways to achieving a competitive, investment-driven economy that is less dependent on oil. Priority should be given to improving infrastructure, enhancing the business environment, improving access to financing for small enterprises, and strengthening governance and anti-corruption efforts.Timely and effective implementation of these measures would promote sustainable and inclusive growth.In concluding, they welcomed progress in improving the quality and availability of economic statistics and encouraged further efforts to compile subnational fiscal accounts.

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