The International Monetary Fund (IMF) has advised the Federal Government to be careful with its borrowing plans.
A statement issued yesterday by the Managing Director of the IMF, Ms Christine Largarde, at the end of her visit to Nigeria urged the Federal Government to identify ways to broaden the revenue base, particularly to create additional fiscal space to offset the impact of lower oil prices.
Largarde advised the government on 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.”
She added that the country “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.”
Ms Largarde “complimented the authorities on their efforts to address corruption, particularly the decision to publish monthly data on the finances and operations of the Nigerian National Petroleum Corporation (NNPC).”
She explained that “transparency and the rule of law will be crucial in reducing constraints to the country’s growth.”
At her meetings with the authorities, Largarde said they discussed how to maintain economic progress while making the transition towards more inclusive and sustainable growth.
Poverty, inequality, and unemployment levels she lamented, “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 challenges she noted have “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.”
1n 2015, however, growth is expected to slow to about 3 1/4 percent, with a slight recovery in 2016. The IMF she said “remains Nigeria’s committed partner as it moves forward to face the challenges of the future.”