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IMF: Nigeria Needs Urgent Structural Economic Reforms



The managing director of the International Monetary Fund (IMF), Christine Lagarde, has once again urged the federal government to embark on structural reforms of Nigeria’s economy in order to move the nation forward.

Lagarde in her remarks at a session with local and foreign journalists today in Bali, Indonesia, at the ongoing IMF/World Bank Meetings, said these reforms include making Nigeria’s ailing refineries work so that the country can channel its funds for better economic activities.

Nigeria has four refineries, with a combined capacity to refine 445,000 barrels per day, but only function at less than 30 per cent capacity.

Lagarde also advised Nigeria to tighten its monetary policies and increase non-oil revenue by engaging in mobilisation of domestic revenue generation.

A recent report by the IMF revealed that tighter monetary policy and moderation in food price increases contributed to tapering inflation in Nigeria. ‘‘Inflation is projected to fall to 12.4 percent in 2018, from 16.5 percent in 2017, and to rise to 13.5 percent in 2019,” the report read in part.

The IMF boss also decried the nation’s current earnings from its non-oil revenue which she said is just 5 percent of the country’s gross domestic production (GDP). ‘‘This is too low relative to where Nigeria should be in order to address issues of health, education and infrastructure,’’ she said.

Meanwhile, Lagarde also warned countries around the world of the perils of a trade or a currency war, saying they could be detrimental to global growth and hurt “innocent bystanders.”

She urged countries to “de-escalate” trade frictions and fix global trading rules, rather than abandon them. “We certainly hope we don’t move in either direction of a trade war or a currency war. It will be detrimental on both accounts for all participants, Lagarde told a news conference during the annual meetings of the IMF and World Bank in Indonesian resort island of Bali.

China and the United States have slapped tit-for-tat tariffs over the past few months, rattling financial markets as investors worried the escalating trade war could knock global trade and investment.

On recent yuan declines, Lagarde said they were mainly driven by the strength of the dollar, noting that it has not depreciated as much against a basket of currencies.

“We’re seeing more and more countries, China included, let their currencies fluctuate,” Lagarde said.




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