Nige­ria ur­gently needs macroe­co­nomic and struc­tural re­forms – IMF

Financial Nigeria Magazine - - Development -

The In­ter­na­tional Mon­e­tary Fund (IMF), at the end of its con­sul­ta­tions in Nige­ria last month, said the coun­try is in ur­gent need of macroe­co­nomic and struc­tural re­forms to con­tain vul­ner­a­bil­ity and sup­port sus­tain­able pri­vate sec­tor led growth.

IMF said over­all growth is slowly pick­ing up but the re­cov­ery re­mains chal­leng­ing. The GDP ex­panded by 1.4 per­cent year-onyear in the third quar­ter of 2017, driven by re­cov­er­ing oil pro­duc­tion and agri­cul­ture. How­ever, growth in the non-oil-nona­gri­cul­tural sec­tor (rep­re­sent­ing about 65 per­cent of the econ­omy), con­tracted in the first three quar­ters of 2017.

Dif­fi­cul­ties in ac­cess­ing fi­nanc­ing and high in­fla­tion con­tin­ued to weigh on com­pa­nies' per­for­mance and con­sumer de­mand. Head­line in­fla­tion de­clined to 15.9 per­cent by end-Novem­ber, from 18½ per­cent at end-2016, but re­mains sticky de­spite tight liq­uid­ity con­di­tions.

“Con­tain­ing vul­ner­a­bil­i­ties and achiev­ing growth rates that can make a sig­nif­i­cant dent in re­duc­ing poverty and un­em­ploy­ment re­quires a com­pre­hen­sive set of pol­icy mea­sures,” the IMF said. While it wel­comes the re­cent tax re­forms and steps taken to lower debt ser­vic­ing costs and lengthen ma­tu­ri­ties, IMF rec­om­mended up­front ac­tions to mo­bi­lize non-oil rev­enues, in­clud­ing through re­form­ing the VAT and re­mov­ing ex­emp­tions, while safe­guard­ing pri­or­ity ex­pen­di­tures, in­clud­ing scal­ing up so­cial safety nets and in­fra­struc­ture in­vest­ment.

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