World Bank, IMF fault Nigeria’s economic recovery claim - PUNCH
BY Nike Popoola and Ifeanyi Onuba
The World Bank and the International Monetary Fund on Wednesday faulted Nigeria’s economic recovery claim, and listed Nigeria among some African countries with weak economic recovery.
The World Bank’s stand was contained in the 20th edition of Africa’s Pulse, the World Bank’s twice-yearly economic update for the region.
The Bank stated, “Beyond Sub- Saharan Africa’s regional averages, the picture is mixed. The recovery in Nigeria, South Africa, and Angola—the region’s three largest economies—has remained weak and is weighing on the region’s prospects.
‘In Nigeria, growth in the non-oil sector has been sluggish, while in Angola the oil sector remained weak. In South Africa, low investment sentiment is weighing on economic activity.
‘Excluding Nigeria, South Africa, and Angola, growth in the rest of the subcontinent is expected to remain robust although slower in some countries.”
On its own part, the IMF said that the economic outlook for Nigeria under the current policies of government remained challenging.
It stated this in a statement issued on Wednesday after the IMF team led by the Mission Chief for Nigeria, Amine Mati, visited Lagos and Abuja from September 25 to October 7.
They held discussions with senior government and central bank officials on economic and financial developments as well as reform implementation.
It also met with representatives of the banking system, the private sector and international development partners.
Mati noted that a slow economic recovery was continuing with falling inflation rate, while external buffers were declining in the face of increased portfolio outflows.
He said elevated fiscal deficits currently relied on the Central Bank of Nigeria’s financing.
This, he said, was complicating monetary policy.
The rate of inflation, according to him, will likely pick up in 2020 following rising minimum wages and a higher VAT rate, despite a tight monetary policy.
Mati said, “A comprehensive package of measures whose design and implementation will require close coordination within the economic team and the newly-appointed Economic Advisory Council is urgently needed to reduce vulnerabilities and raise growth.”
He stressed the need to maintain a tight monetary policy through more conventional tools.
The IMF chief pointed out that there was a need for the introduction of longer-term government instruments to mop up excess liquidity and move towards a uniform market-determined exchange rate.
He said, “The pace of economic recovery remains slow as depressed private consumption and investors’ wait-and-see attitude kept growth in the first half of the year at two per cent, a rate significantly below population growth.
“Headline inflation has fallen, reaching its lowest level since January 2016, helped by lower food price inflation. Spurred by one-off increases in imports, the current account turned into a deficit in the first half of 2019 after three years of surpluses.”