The Fund
however, advised that efforts should be intensified to mobilize public support
for these reforms.
however, advised that efforts should be intensified to mobilize public support
for these reforms.
This was contained in the Funds financial score
card on Nigeria weekend at the conclusion of its Article IV consultation with
the government.
card on Nigeria weekend at the conclusion of its Article IV consultation with
the government.
The IMF however noted that widespread
unemployment and poverty in Nigeria remained key challenges for policymakers,
and called for renewed efforts to make economic growth more broad-based and
inclusive.
unemployment and poverty in Nigeria remained key challenges for policymakers,
and called for renewed efforts to make economic growth more broad-based and
inclusive.
It also “underscored the need for the government
to improve tax administration, better prioritize public expenditure, strengthen
the public financial management, and improve the fiscal framework.”
to improve tax administration, better prioritize public expenditure, strengthen
the public financial management, and improve the fiscal framework.”
The report further said “Executive Directors (of
IMF) commended the authorities for prudent macroeconomic policies that have
underpinned a strong economic performance in recent years and looking ahead
supported the authorities’ strategy of consolidating the fiscal position while
opening up policy space for needed investment in infrastructure and human
capital.
IMF) commended the authorities for prudent macroeconomic policies that have
underpinned a strong economic performance in recent years and looking ahead
supported the authorities’ strategy of consolidating the fiscal position while
opening up policy space for needed investment in infrastructure and human
capital.
’’The Directors considered the current tight
monetary stance to be consistent with the authorities’ objective of reducing
inflation to single digits. They also took note of the staff’s assessment that
the exchange rate in real effective terms is broadly in line with fundamentals.
Directors commended the authorities’ success in restoring financial stability
after the 2009 banking crisis. In light of this achievement, they recommended
winding down the operations of the asset management company to curb moral
hazard and fiscal risks.
monetary stance to be consistent with the authorities’ objective of reducing
inflation to single digits. They also took note of the staff’s assessment that
the exchange rate in real effective terms is broadly in line with fundamentals.
Directors commended the authorities’ success in restoring financial stability
after the 2009 banking crisis. In light of this achievement, they recommended
winding down the operations of the asset management company to curb moral
hazard and fiscal risks.
“Directors welcomed the Central Bank’s
commitment to address supervisory and regulatory gaps identified in the
Financial Stability Assessment Update, particularly the need to strengthen
cross-border supervision and the regime against money laundering and terrorism
financing. Directors concurred that wide-ranging reforms are key to make growth
more inclusive.
commitment to address supervisory and regulatory gaps identified in the
Financial Stability Assessment Update, particularly the need to strengthen
cross-border supervision and the regime against money laundering and terrorism
financing. Directors concurred that wide-ranging reforms are key to make growth
more inclusive.
They agreed on the importance of supporting
sectors with high employment potential, not through protectionist measures or
tax incentives but rather with initiatives to improve governance, the
investment climate, and competitiveness.
sectors with high employment potential, not through protectionist measures or
tax incentives but rather with initiatives to improve governance, the
investment climate, and competitiveness.
Directors welcomed reforms underway in the
energy sector, and looked forward to an early passage of the Petroleum Industry
Bill which would boost investment, government revenue, and fiscal transparency.
They also encouraged the authorities to promote market-based access to credit
for small- and medium-sized enterprises. On February 6, 2013, the Executive
Board of the International Monetary Fund (IMF) concluded the 2012 Article IV
consultation with Nigeria.”
energy sector, and looked forward to an early passage of the Petroleum Industry
Bill which would boost investment, government revenue, and fiscal transparency.
They also encouraged the authorities to promote market-based access to credit
for small- and medium-sized enterprises. On February 6, 2013, the Executive
Board of the International Monetary Fund (IMF) concluded the 2012 Article IV
consultation with Nigeria.”
Nigeria’s macroeconomic performance has been
broadly positive over the past year. Real gross domestic product (GDP) growth
is projected to have decelerated slightly to 6.3 percent, reflecting the
effects of the nationwide strike in early 2012, floods in the fourth quarter of
2012, and continued security problems in the north. Annual inflation increased
from 10.3 percent (end-of-period) in 2011 to 12.3 percent in 2012, owing mainly
to the adjustment of administrative prices of fuel and electricity; large
increases in import tariffs on rice and wheat; and the impact of floods in Q3.
The external position has strengthened and international reserves rose from
US$32.6 billion at end-2011 to US$44 billion at end-2012 (5½ months of
prospective imports), driven by sustained high oil prices, stricter
administration of the gasoline subsidy regime, and strong portfolio inflows.
The fiscal policy stance was tightened in 2012 and fiscal buffers are being
rebuilt. The non-oil primary deficit of the consolidated government is
estimated to have narrowed from about 36 percent of non-oil GDP in 2011 to 30.5
percent in 2012, mainly due to expenditure restraint. Monetary policy remained
tight in 2012 in response to inflationary pressures. The Central Bank kept its
policy rate unchanged during the year but raised the cash reserve requirement
for banks from 8 percent to 12 percent and lowered allowable open foreign
exchange position for banks. Financial soundness indicators point to continued
improvements in the health of the banking system.
broadly positive over the past year. Real gross domestic product (GDP) growth
is projected to have decelerated slightly to 6.3 percent, reflecting the
effects of the nationwide strike in early 2012, floods in the fourth quarter of
2012, and continued security problems in the north. Annual inflation increased
from 10.3 percent (end-of-period) in 2011 to 12.3 percent in 2012, owing mainly
to the adjustment of administrative prices of fuel and electricity; large
increases in import tariffs on rice and wheat; and the impact of floods in Q3.
The external position has strengthened and international reserves rose from
US$32.6 billion at end-2011 to US$44 billion at end-2012 (5½ months of
prospective imports), driven by sustained high oil prices, stricter
administration of the gasoline subsidy regime, and strong portfolio inflows.
The fiscal policy stance was tightened in 2012 and fiscal buffers are being
rebuilt. The non-oil primary deficit of the consolidated government is
estimated to have narrowed from about 36 percent of non-oil GDP in 2011 to 30.5
percent in 2012, mainly due to expenditure restraint. Monetary policy remained
tight in 2012 in response to inflationary pressures. The Central Bank kept its
policy rate unchanged during the year but raised the cash reserve requirement
for banks from 8 percent to 12 percent and lowered allowable open foreign
exchange position for banks. Financial soundness indicators point to continued
improvements in the health of the banking system.
In 2013, growth is expected to recover to above
seven percent. Inflation is projected to decline below 10 percent, supported by
the tight monetary policy stance and ongoing fiscal consolidation. The key
downside risks are a large drop in world oil prices; and slow progress in
building consensus around key fiscal reforms.
seven percent. Inflation is projected to decline below 10 percent, supported by
the tight monetary policy stance and ongoing fiscal consolidation. The key
downside risks are a large drop in world oil prices; and slow progress in
building consensus around key fiscal reforms.
Source: Vanguard
