Nigeria’s economic reform plan not good enough – IMF

IMF boss with Nigerian officials [Photo: Ventures Africa]

The International Monetary Fund, IMF, is not satisfied with the Nigerian government’s economic reform efforts, a new report has shown.

Reuters news agency reports that the development could delay talks over $1.4 billion in international loans.

According to a 68-page IMF report obtained by Reuters, the Washington-based fund will urge Nigeria, a major oil producer, to introduce immediate changes to its exchange rate policy.

It would also say its recent reform plan is not enough to drag Africa’s biggest economy out of recession.

“Much more needs to be done,” the IMF said in the document, written after a final meeting between its representatives and top officials in Abuja, Nigeria’s capital.

“Further actions are urgently needed,” it said.

The IMF, the report said, would later issue its verdict on Nigeria’s economy on March 29.

The report, from the IMF’s acting secretary, which is addressed to members of its executive board, is set to form part of the IMF’s verdict, although Nigeria can request alterations.

The World Bank has been in talks with Nigeria for a loan of at least $1 billion for more than a year and the African Development Bank, AfDB, has $400 million on offer, but discussions have stalled over economic reforms.

Nigeria is seeking the funding for infrastructure investment and to help plug an expected record deficit in this year’s budget as it boosts spending to try to end a recession.

Muhammadu Buhari, Nigeria’s president, has rejected further devaluation of the currency.

Nigeria has at least three exchange rates, including the official one; one for school and medical fees abroad; and a retail rate set by licensed exchange bureaus.

The IMF said that if Nigeria did not remove foreign exchange restrictions and unify the exchange rates, it risked “further deterioration in (forex) reserves” and “a disorderly exchange rate depreciation”.

The report said Nigeria should also tackle its over-dependence on oil, low government revenues, a large infrastructure deficit, a rising debt service and double-digit inflation.

Nigeria has, however, not asked the IMF for fiscal support.

Earlier, Nigeria released an Economic Recovery and Growth Plan (ERGP) for 2017 to 2020 calling for a market-determined exchange rate.

But the IMF, in its report, says the ERGP “is more optimistic on growth than (IMF) staff… does not explicitly call for tighter monetary and fiscal policy in the near term, and assumes no immediate change in exchange rate policy – all of which are essential to reduce vulnerabilities and increase investors’ interest.”

Delays in adopting these policies increase vulnerabilities and risk reforms being politicised ahead of the 2019 elections, the IMF said.

Nigeria’s woes go beyond its economy, said the report, adding that the northeast is in the throes of a humanitarian crisis caused by the Boko Haram insurgency, which is threatening millions with starvation.

Adoption of a fully flexible exchange rate would likely see the naira, which is propped up by the central bank but trades around 30 percent weaker on the parallel market, plummet in value. Recent injection of hundreds of millions of dollars by the Central Bank of Nigeria has, however, seen an increased convergence between the official and black market rates.

Sources said even without the IMF’s proposed reforms, the World Bank and AfDB were likely to offer the loans to Nigeria.

The report said Nigeria should articulate a sustainable fiscal policy and adopt structural reforms to diversify the economy away from its dependence on oil and promote competitiveness.

“The outlook is challenging, with growth expected to remain flat and macroeconomic imbalances to persist,” it said.


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  • Dawood

    Of course he no good enough because we no borrow billions from una. All DE ones when Ikonji-Iweala thief give una no do. Buhari should tell dat woman make she kiss our collective ass. We’re going back to the future: agriculture.

  • Karl Imom

    Nonsense! You have to live in a place to be able to define problems of that place before you will be able to regulate economy in that place. IMF arrogance can no longer be tolerated by Nigerians. Their economic policy hinges on more borrowing by third world countries. Once a country is NOT planning on borrowing big, their economic plan is no longer good. Nonsense, if IMF wants to regulate Nigeria’s economy, let them move to Nigeria rather sell to us their one-seize-fits-economic plan.

  • Solomon Brown

    Are we a sovereign nation or just a play ground for these corporate blood suckers? Why do we need a $1.4 billion dollar loan when we could just have Abacha’s loot repatriated to help fund our economy?

  • Abdulkadir

    According to a 68-page IMF report obtained by Reuters, the Washington-based fund will urge Nigeria, a major oil producer, to introduce immediate changes to its exchange rate policy. Its quite suspicious that it is only when the naira is placed on the path of recovery that IMF is finding fault with our policies.

  • Impulse400

    Have you ever heard the saying that “He who pays the Piper, dictates the tune”? If Nigeria must accept loan from IMF, through CBN that receives and carries out the conversions before paying the Government, Nigeria must dance to the dictates of IMF, as transmitted through CBN to Government.

    Take a look at the picture in this article and see how foreign cabals dictate to our government: CBN Governor, behind his Cabal Boss, Jesuit Trained IMF President, shaking the hand of our President, who detests shaking women and looks down upon them, but looks up to her, and his members of cabinet looking on in reverence as a symbolic moment is captured.

    IMF/World Bank/AfDB loans and CBN Forex policies are instruments of economic enslavement, through financial manipulation. Countries like Nigeria are forced to take loans they don’t need and devalue their currency so that they cannot pay. The Government accepts the loans and conditions as allegiance to superior Colonial Masters, in exchange for guarantees their administration will be secured by foreign interests or Colonial interests. When the time comes, IMF walks into the country to take control of the economy and Banking system through the same CBN, like they did in Greece.