A recent report by the International Monetary Fund (IMF) reveals that Nigerians are getting poorer.
According to the IMF, economic reforms are urgently needed to put the nation on a path to sustainable economy.
IMF also noted that the Nigerian Government is expected to muddle through in the medium term, saying that progress could be threatened if the 2019 general elections consume political energy and resources.
The Funds added that outlook for growth had improved but remained challenging, noting that comprehensive and coherent economic policies remain urgent and must not be delayed by approaching elections and recovering oil prices.
“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 IMF noted, according to Reuters (as seen on Premium Times).
IMF said that the risks to growth included delays to implementing policies and reforms ahead of the 2019 general elections, the ripple effects of falling oil prices which could cripple capital flow, amongst others.
“Further delays in policy action, including because of pre – election pressures, can only make the inevitable adjustment more difficult and costlier.”
The IMF also urged Nigeria to simplify its complex foreign exchange system, which according to the IMF has created gaps between the currency official rate and other rates in the market. Adding that the Central Bank of Nigeria (CBN) must stop direct interventions in the country’s economy like the injection of funds into the foreign exchange market.
“Moving towards a unified exchange rate should be pursued as soon as possible,” the report said.
“The IMF staff does not support the exchange measures that have given rise to the exchange restrictions and multiple currency practices,” it stated.