By Tony Obiechina, Abuja
The International Monetary Fund (IMF), has urged the Federal Government to address what it termed Nigeria’s policy uncertainties in order for the economy to experience rapid growth and ensure better standard of living for its citizens.
It also urged the government to consolidate its revenue base so as to create space for higher capital and priority spending.
The Director, African Department of the Fund, Abebe Selassie, who gave the advice at the presentation of the IMF Regional Economic Outlook on Tuesday in Abuja said the federal government should be more efficient in its spending.
Mr. Abebe added that maintaining a tight monetary policy while adopting a unified market determined exchange rate would also strengthen Nigeria’s banking sector resilience.
He said: “Addressing structural challenges to boost diversification business environment, governance power sector reform, public investment efficiency, health and education, financial inclusion, and gender equality.”
According to the Report titled: “Sub-Saharan Africa, Recovery Amid Elevated Uncertainty” the Fund said that external and domestic headwinds are weighing on growth prospects.
The IMF noted that the familiar challenge of addressing human and physical capital investment needs is being complicated by declining fiscal space and less supportive external environment.
The Fund further noted that meeting the challenge would be even more difficult if the downside risks to growth material – for example, if global growth is even weaker than envisioned in the current baseline.
This underscores the need, the Fund added, to accelerate reforms and calibrate the size and pace of policy adjustment to ensure that any shift in policies is consistent with credible medium-term macroeconomic objectives, available finding and debt sustainability.
He said that the volatility and uncertainties in the commodity market continued to pose a challenge to policy makers saying that as the recovery continue beyond 2019, it will not be enough to create the much needed jobs.
According to him, “Growth needs to be higher to about 6 per cent to drive growth”, disclosing that, the region needs between 18-20 million jobs by 2025.
In his presentation, an economist at the African Department, Siddharth Kothari insisted that rising debt levels among oil expiration countries can be brought down when policies are implemented.
With its current debt at $42.39 billion, Nigeria’s fiscal authorities plan to borrow more of concessionary loans as opposed to former methods of borrowings.
The representative of the Minister of Finance, Dr. Mohammed Dikwa said that the federal government is providing the right incentives that will expand its tax base and boost revenue generation.
According to Dikwa, who is the Permanent Secretary Special Duties in the Ministry, “the government is not only expanding the tax base, it is also building its ICT capacity especially in respect of its finances.”
The Permanent Secretary assured that despite the late passage of the 2019 budget, it will be fully implemented by the federal government.
