Nigeria needs reform to avoid future forex crisis, says World Bank

The World Bank, Wednesday, said Nigeria needs to reform its finance to avoid any future foreign exchange crisis.

According to the World Bank Chief Economist for Africa, Albert Zeufack, exchange rate adjustments could lead to higher inflation.

Reuters news agency quoted Mr. Zeufack as saying that making fiscal adjustments in the country’s second year of recession would be “extremely challenging ”.

The Central Bank of Nigeria, CBN, in its effort to stabilise the Naira, has been injecting liquidity into the market.

Nigeria, Africa’s biggest economy, has been battling to move out of recession, its first in twenty five years.

The value of its local currency, the Naira, had also ebbed in the money market, stifling business initiatives and investment.

But the World Bank chief, Mr. Zeufack, noted that continued monetary policy tightening would address the pressures.

Earlier, the nation’s bureau of statistics had said that Nigeria’s inflation declined by 0.53 per cent in March.

Similarly, the IMF also predicted that the nation’s economy would rise by 0.8 per cent in 2017, adding that agriculture and big government spending would drive the growth.

On Wednesday, the naira recorded a major gain closing at 390 per United States dollar at the parallel market, up from 405/dollar on Tuesday.

The development came after the Central Bank of Nigeria, CBN, announced the injection of $280 million into the various segments of the forex market.