Nigeria urgently needs macroeconomic and structural reforms – IMF

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.