The International Monetary Fund has called on the Nigerian Government to make additional structural adjustments and ensure tighter monetary policy in order to address macroeconomic imbalances in the country.
The Director, African Department, IMF, Mr. Abebe Selassie, made the call on Friday during a press conference at the ongoing 2016 annual meetings of the World Bank/IMF in Washington DC, United States of America.
Speaking on the measures needed to reduce economic imbalance in Nigeria, Selassie said, “Yes, there was that adjustment in exchange rate, but despite that, the BDC rate was getting much weaker.
What is necessary to facilitate the reduction in imbalance in simple terms is significant fiscal adjustment. I think that is very important, especially on the revenue side; taking measures to curtail the fiscal deficit will be very important.
“This has to be accompanied by tighter monetary conditions more than we are seeing. I think some of the continued weakness of the naira is coming from monetary conditions that are not as tight as they should be.”
He added, “This has to be accompanied by structural reforms; fiscal structural issues to try and improve public finance over the medium term, but also a lot of the structural reforms that are needed to force a stronger supply response in the country.
“One good thing for Nigeria is that the level of debt is not very high. So, there is room to have a more gradual adjustment. But the issue here is to have in place a credible framework that allows private sector and other financiers to step in so as to give the government the time to smoother the adjustment.”
Meanwhile, Nigerian officials on Friday begun high-level discussions with officials of the International Monetary Fund and the World Bank as well as Chinese officials on how to attract much needed foreign investments into the country.
The Nigerian delegation to the meetings, which held in Washington DC, United States of America as part of the ongoing annual meetings of the World Bank/International Monetary Fund, was led by the Minister of Finance, Mrs. Kemi Adeosun, and the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele.
Emefiele, who addressed journalists on what Nigeria had gained from the meetings, said, “Basically, there is a lot of networking meetings going on, and I can assure you that meetings are going on with some of our partners, China particularly. We are going into a meeting with the Chinese delegation.
“I know that some meetings will be held with the managing director of the IMF as well the World Bank Group; we are going to achieve some of the objectives.”
On Nigeria’s attempt to add the Chinese yuan to the foreign currency reserves, the CBN governor said, “I believe that in the course of time, we will achieve it.
Nigeria happens to be one of the foremost countries in the world that adopted the Renminbi as a reserve currency. We will work together with China to ensure that we also get our fair share of the benefit from this arrangement.”
On the IMF Managing Director, Christine Lagarde’s call for a three-pronged approach of monetary, fiscal and structural reforms to achieve growth by countries facing economic challenges, Emefiele said, “There is no gainsaying the fact that that has to be the direction everybody has to go and I think that we are doing that in Nigeria.