The International Monetary Fund (IMF) says Nigerians are getting poorer and that “coherent and comprehensive” economic reforms are urgently needed in the country.
The gross domestic product report released by the National Bureau of Statistics (NBS) on Tuesday showed that the economy recorded a growth of 0.83 percent in 2017.
The Bretton Wood institution said it expects the government to “muddle through” in the medium term, and any progress could also be threatened if elections next year consume political energy and resources.
Reuters reports that the IMF said that although the outlook for growth has improved, the climate still remained challenging.
“Comprehensive and coherent economic policies remain urgent and must not be delayed by approaching elections and recovering oil prices,” IMF said in its annual Article IV review of Nigeria’s economy.
“Higher oil prices would support a recovery in 2018 but a ‘muddle-through’ outlook is projected for the medium term under current policies, with fiscal dominance and structural constraints leading to continuing falls in real GDP per capita.
“Further delays in policy action — including because of pre-election pressures — can only make the inevitable adjustment more difficult and costlier.”
The lender reteirated that Nigeria needs to simplify its complex foreign exchange system.
“Moving towards a unified exchange rate should be pursued as soon as possible. (IMF) staff does not support the exchange measures that have given rise to the exchange restrictions and multiple currency practices.”
It also said that the Central Bank of Nigeria (CBN) should stop its intervention activities in the foreign exchange market.
The CBN has been injecting money into the forex market to ease the pressure on the naira.