By Gbenga Ogundare
Nigeria will need to strengthen policies to address current challenges and improve the economy, IMF Managing Director Christine Lagarde said in a statement in Washington Thursday at the conclusion of her visit to Nigeria.
“Against this background, we discussed a range of policy recommendations related to improving the competitiveness of the Nigerian economy. This includes focusing on the critical area of infrastructure, where power, transportation, and housing are especially key. It also includes identifying ways to broaden the revenue base, particularly to create additional fiscal space to offset the impact of lower oil prices; and the need for careful decisions on borrowing, public spending, and managing the cost of fuel subsidies – with a view to safeguarding priority social sectors and the most vulnerable groups. This will require a package of measures involving business-friendly monetary policy, flexible exchange rate policy, and disciplined fiscal policy, and the implementation of structural reforms.’
“In my meetings with the authorities, we discussed how to maintain economic progress while making the transition towards more inclusive and sustainable growth. Poverty, inequality, and unemployment levels remain too high, in addition to the challenge of the Boko Haram insurgency. Nigeria also has to deal with the difficulties presented by falling oil prices, reduced emerging market demand, and tightening global financial conditions. This has led to sharply lower export earnings and government revenues. The non-oil sector has also been affected and financing for investment is hard to come by.’
“My visit to Nigeria has been extremely fruitful and informative. I wish to thank President Muhammadu Buhari for meeting with me to discuss Nigeria’s achievements and its outlook. I also want to thank Finance Minister Kemi Adeosun and Governor Godwin Emefiele of the Central Bank of Nigeria for their insights. In addition, I had the honor to address members of the National Assembly, chaired by Honorable Bukola Saraki.’
“Nigeria is the largest economy in Sub-Saharan Africa, with the largest population, and its important role at the regional level has become increasingly recognized. The economy is well diversified, no longer dominated by agriculture and oil, with services accounting for almost half of GDP, including a significant home-grown film industry and innovative startups from fashion to software development. Nigeria has also experienced a decade of strong growth, averaging 6.8 percent a year. 1n 2015, however, growth is expected to slow to about 3 1/4 percent, with a slight recovery in 2016.
“I complimented the authorities on their efforts to address corruption, particularly the decision to publish monthly data on the finances and operations of the National Petroleum Corporation. Transparency and the rule of law will be crucial in reducing constraints to the country’s growth.
“As well as exchanging views with government officials, I had very interesting meetings with a group of women leaders and representatives of business and banks. I also visited the Mother Theresa Children’s Home charity organization, which provides care, housing, and education to vulnerable children. As always, I found it inspirational to engage with Nigeria’s young people.
“I would like to thank the Government and people of Nigeria for their welcome and warm hospitality. The IMF remains Nigeria’s committed partner as it moves forward to face the challenges of the future.”