By Kunle Adedoyin
The International Monetary Fund (IMF) has predicted that the economic outlook for Nigeria under the current policies of government remains challenging.
The Fund, in a statement issued on Wednesday, after its staff team led by the Mission Chief for Nigeria Amine Mati, visited Lagos and Abuja from September 25 to October 7, to discuss recent economic and financial developments and review reform implementation, said the slow economic recovery is continuing in the country.
At the end of the assessment, Mati said while the slow economic recovery is continuing, inflation is falling, and external buffers are declining in the face of increased portfolio outflows.
He said elevated fiscal deficits currently rely on Central Bank of Nigeria financing, thus complicating monetary policy stance.
He said action on a coherent and coordinated set of policies is urgently needed to reduce vulnerabilities and increase growth over the medium term.
“The pace of economic recovery remains slow, as depressed private consumption and investors’ wait-and-see attitude kept growth in the first half of the year at two per cent, a rate significantly below population growth,” Mati said.
“Headline inflation has fallen, reaching its lowest level since January 2016, helped by lower food price inflation.
“Spurred by one-off increases in imports, the current account turned into a deficit in the first half of 2019 after three years of surpluses.
“Gross international reserves have fallen to below $42bn at end-August 2019, mainly reflecting a decline in foreign holdings of short-term securities and equity.
“The exchange rate in various windows remained stable, helped by steady sales of foreign exchange by the Central Bank of Nigeria.”