Tayo Olanipekun, Washington DC
The International Monetary Fund (IMF) has said Nigeria is one of about 24 resource-dependent economies facing sluggish growth and slower improvements in standards of livings and thus needs to pursue reforms to facilitate economic diversification.
Speaking on Friday at the ongoing Spring Meetings of the Fund during the Regional Economic Outlook for Sub-Saharan Africa, IMF Director, African Department, Abebe Aemro Selassie, said the nation also needs to address “remaining” economic imbalances and have a strong focus to address constraints that are holding investments back.
The IMF said the 24 countries, which also include some of the larger economies in the region like Angola and South Africa, account for more than 50 per cent of their region’s output and that in many cases, private investments remain weak in the countries.
It expressed optimism that increased trade integration in the region, which the African Continental Free Trade Area will facilitate once completed, will establish a market of 1.2 billion people with a combined GDP of $2.5trillion.
“The benefits could be substantial, particularly if countries tackle the non-tariff bottlenecks to trade, including by investing in infrastructure, lowering logistical costs and improving trade,” said IMF Director.
The Fund attributed the higher growth in the fast-growing economies like Benin, Ethiopia, Ghana and Senegal to public investments but cautioned that there is the need to hand over “the reins of growth from the public to the private sector.”
According to IMF, such public investments have translated into an increase in public debt levels. “There is a need to strike a better balance public debt increase on one hand and the continued investments that are needed in public investment,” it cautioned.
On the issue of conflict and its impacts on economies of countries in the Sahel and Lake Chad Basin, IMF said it is discussing with country authorities how to “minimize their diversion of resources away from much needed development spending.”