The International Monetary Fund (IMF) has said Nigeria’s economy needs urgent reform, while highlighting risks associated with the volatile foreign exchange market.
This is just as the Economic Recovery and Growth Plan (ERGP), which was believed by many to have potential of re-invigorate the Nigerian economy was formerly launched in Abuja yesterday.
The IMF in the report noted that the Nigerian currency, the Naira, is overvalued to the tune of 10 to 20 per cent, stating that for largest economy in Africa to recover, much more needs to be done.
Additionally, the IMF boss disclosed that Nigeria’s 2017 projections for non-oil revenues are more optimistic than the IMF’s, and authorities need to increase tax levels to diversify its income.
The Washington-based agency had earlier warned Nigeria that its economy needs urgent reform.
A document, which earlier version was obtained by Reuters last month, outlines a raft of failings in Nigeria’s handling of its economy and could affect talks over at least $1.4 billion in international loans.
Nigeria fell into recession in 2016, its first in 25 years, largely due to the impact of low oil prices and militant attacks on energy facilities in the Niger Delta region.
For Africa’s largest economy, crude sales account for more than 90 percent of foreign exchange earnings and two-thirds of government revenue.
But the IMF said the plan, criticised by economists for including few concrete measures, is not enough to drag Africa’s biggest economy out of recession.
Meanwhile, Udoma Udo Udoma, minister of budget and national planning, at the official launching of the ERGP said: “The Plan articulates up to 60 interventions, and initiatives, that must be executed and/or completed within the next four years to tackle, and remove, impediments to growth; to make markets function better; and to leverage the power of the private sector.
However, this growth is to be achieved without compromising the core values of this nation, such as discipline, integrity, social justice, self- reliance and patriotism. And, of course, all the initiatives in the Plan will be implemented in such a manner as to continue to strengthen and promote national cohesion and social inclusion.
“Even though the ERGP outlines up to 60 initiatives, it focuses on five execution priorities, which are central to achieving the 7 per cent growth projected by the end of the Plan period”, he said.
He however highlighted key areas including achieving Agriculture and Food Security; Expansion of Energy Infrastructure capacities (power and petroleum); Improving Transportation Infrastructure and Driving Industrialization principally through local and small business enterprises.