The International Monetary Fund has warned Nigeria that despite exiting recession, the country’s economy could still be adversely affected.
IMF gave the warning just as it suggested ways through which Nigeria’s economy could continue to improve.
In the assessment report at the end of its 2018 Article IV Consultation on Monday, the Executive Board of the agency on Wednesday said the reforms, which inspired the country’s exit from recession, failed to impact non-oil non-agricultural growth, lower inflation close to single digits, contain banking sector vulnerabilities or reduced unemployment.
It said to continue to do well, the nation should come up with more ambitious tax policy measures which would include reforming the value-added tax, increasing excise, and rationalising tax incentives.
An excise tax is paid on goods by the manufacturer and passed to the customers through the price of goods sold to them.
IMF also stressed the need for a financial adjustment policy.
The policy, it said, would need to focus on non‑oil revenue mobilisation and a reduction in current expenditure to reduce the ratio of interest payments to revenue to a more sustainable level.
Room , IMF, advised, should also be created for priority social and infrastructure spending.
It however praised the country’s efforts in implementing the National Economic Recovery and Growth Plan.
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The report reads in part: “Directors commended the central bank’s tightening bias in 2017, which should continue until inflation is within the single digit target range.
“They recommended continued strengthening of the monetary policy framework and its transparency, with a number of directors urging consideration of a higher monetary policy rate, asymmetric application of reserve requirements, and no direct central bank financing of the economy.
“A few directors urged confirmation of the appointments of the central bank’s board of directors and members of the monetary policy committee.
“Directors commended the recent foreign exchange measures and recent efforts to strengthen external buffers to mitigate risks from capital flow reversals. They welcomed the authorities’ commitment to unify the exchange rate and urged additional actions to remove remaining restrictions and multiple exchange rate practices.”
