IMF says Nigeria’s economic outlook remains challenging

Illustrative picture. PHOTO CREDIT: SHIPS & PORTS archive


The International Monetary Fund (IMF) on Wednesday said that the economic outlook for Nigeria under the current policies of government remains challenging.

It said this in a statement issued after an IMF staff team led by the Mission Chief for Nigeria Amine Mati, visited Lagos and Abuja from September 25 to October 7, to discuss recent economic and financial developments and review reform implementation.

At the end of the assessment, Mati said a slow economic recovery is continuing, inflation is falling, while external buffers are declining in the face of increased portfolio outflows.

He said elevated fiscal deficits currently rely on Central Bank of Nigeria financing, thus complicating monetary policy stance.

He said action on a coherent and coordinated set of policies is urgently needed to reduce vulnerabilities and increase growth over the medium term.

He said, “The pace of economic recovery remains slow, as depressed private consumption and investors’ wait-and-see attitude kept growth in the first half of the year at two per cent, a rate significantly below population growth.

“Headline inflation has fallen, reaching its lowest level since January 2016, helped by lower food price inflation.

“Spurred by one-off increases in imports, the current account turned into a deficit in the first half of 2019 after three years of surpluses.

“Gross international reserves have fallen to below $42bn at end-August 2019, mainly reflecting a decline in foreign holdings of short-term securities and equity.

“The exchange rate in various windows remained stable, helped by steady sales of foreign exchange by the Central Bank of Nigeria.”