esterday Wednesday 8th of March 2018 is a remarkable day for the Buhari administration, it is the day that The International Monetary Fund (IMF), gave Nigeria a clean bill of health as it relates to economic recession, IMF stated that Nigeria has exited from economic recession, IMF further applauded Nigeria’s healthy foreign exchange reserves.
This good news was contained in a report released in Washington DC, USA, by its Executive Board at the conclusion of Article IV Consultation on Nigeria. According to the report, the Executive Directors of IMF attributed it to the rising crude oil prices and new foreign exchange measures. They also stated that the Federal Government of Nigeria recorded major signs of progress due to the implementation of the Economic Recovery and Growth Plan (ERGP), the convergence in foreign exchange windows, tight monetary policy and improvements in tax administration.
However, the IMF warned that Nigeria’s economy was still extremely vulnerable, Nigeria’s economic growth was still fragile and susceptible to shocks. The directors opined that this may be avoided if the non-oil sectors were exploited. The report said
“To address these vulnerabilities, they had called for urgent comprehensive and coherent policy actions on the part of the government.
“The directors emphasized the need for a growth-friendly fiscal adjustment to reduce the ratio of interest payments to revenue, to a more sustainable level and prioritize social and infrastructure spending.”
IMF recommended a more ambitious tax policy that will include reforming the value-added tax, increasing excise duty and rationalizing tax incentives in addition to the ongoing efforts to improve tax administration. According to them
“The implementation of an automatic fuel price setting mechanism, sound cash and debt management and improved transparency in the oil sector is imperative.
“There is need to also increase monitoring of the fiscal positions of state and local governments and substantially scaled-up social safety nets.”
The IMF commended the Central Bank’s tightening Monetary Policy in 2017, which they advised should continue until inflation was within the single-digit target range.