{"id":11911,"date":"2017-03-31T11:39:22","date_gmt":"2017-03-31T10:39:22","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=11911"},"modified":"2017-03-31T11:39:22","modified_gmt":"2017-03-31T10:39:22","slug":"dump-multiple-exchange-rates-forex-curbs-imf-tells-fg","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/dump-multiple-exchange-rates-forex-curbs-imf-tells-fg\/","title":{"rendered":"Dump multiple exchange rates, forex curbs, IMF tells FG"},"content":{"rendered":"

The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the Nigerian economy.<\/p>\n

The recommendation came in the Washington-based fund\u2019s regular assessment of Nigeria\u2019s economy.<\/p>\n

The report came on the heels of a recent visit by a team of the IMF officials to Nigeria to assess the economy.<\/p>\n

In a statement released on its website and titled: \u2018IMF Executive Board concludes 2017 Article IV consultation with Nigeria\u2019, the fund emphasised that stronger macroeconomic policies were urgently needed to rebuild confidence and foster economic recovery in the country.<\/p>\n

It read in part, \u201cDirectors underscored that external adjustment is necessary to protect foreign currency buffers and reduce vulnerabilities. They commended the recent easing of some exchange restrictions and urged the authorities to remove the remaining restrictions and multiple currency practices, thus unifying the foreign exchange market and helping regain investor confidence.<\/p>\n

\u201cDirectors emphasised that these policies should be supported by tighter monetary policy and fiscal consolidation to anchor inflation expectations and to limit the risk of exchange rate overshooting, as well as structural reforms to improve competitiveness.\u201d<\/p>\n

While commending the Central Bank of Nigeria\u2019s efforts to keep the country\u2019s banks afloat, the IMF stated that the issue of declining asset quality in the financial services industry must be urgently addressed.<\/p>\n

It stated, \u201cDirectors welcomed the steps to strengthen banking sector\u2019s resilience through stronger prudential requirements. With asset quality declining, they recommended further intensifying bank monitoring, enhancing contingency planning, and strengthening resolution frameworks.<\/p>\n

\u201cDirectors encouraged quickly increasing the capital of undercapitalised banks and putting a time limit on regulatory forbearance.\u201d<\/p>\n

The IMF said it recognised that the Nigerian economy had been negatively impacted by low oil prices and production.<\/p>\n

It commended the efforts already made by the Federal Government to reduce vulnerabilities and enhance resilience, including increasing fuel prices, raising the Monetary Policy Rate, and allowing the exchange rate to depreciate.<\/p>

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However, in the light of the persisting internal and external challenges, the fund emphasised that stronger macroeconomic policies were urgently needed to rebuild confidence and foster economic recovery.<\/p>\n

It said, \u201cDirectors welcomed the authorities\u2019 Economic Recovery and Growth Plan, which focuses on economic diversification driven by the private sector, and government initiatives to strengthen infrastructure, including the recently adopted power sector recovery plan. However, they underlined that without stronger policies, these objectives may not be achieved.<\/p>\n

\u201cDirectors generally emphasised the need for a front-loaded, revenue-based fiscal consolidation starting in 2017, to reduce the Federal Government\u2019s interest payments-to-revenue ratio to sustainable levels. They underscored that priority should be given to increasing non-oil revenue, including through raising VAT and excise rates, strengthening compliance, and closing loopholes and exemptions.\u201d<\/p>\n

It added, \u201cAdministering an independent fuel price-setting mechanism to eliminate fuel subsidies, strengthening public financial management, and developing a well-targeted social safety net would also support the adjustment. Directors stressed the need to contain the fiscal deficit of state and local governments, including through improved transparency and monitoring.<\/p>\n

\u201cDirectors emphasised that ambitious structural reforms are key to achieving a competitive, investment-driven economy that is less dependent on oil. Priority should be given to improving infrastructure, enhancing the business environment, improving access to financing for small enterprises, and strengthening governance and anti-corruption efforts. Timely and effective implementation of these measures would promote sustainable and inclusive growth.\u201d<\/p>\n

A staff report, an accompanying document seen by Reuters<\/em> and addressed to the IMF\u2019s executive board, outlined a raft of failings in Nigeria\u2019s handling of its economy.<\/p>\n

The World Bank has been in talks with the Federal Government for more than a year over an application for a loan of at least $1bn and the African Development Bank has $400m on offer. But talks have stalled over economic reforms.<\/p>\n

Nigeria\u2019s economy contracted by 1.5 per cent last year.<\/p>\n

\u201cUnder unchanged policies, the outlook remains challenging,\u201d the report stated, adding that growth would \u201cpick up only slightly\u201d to 0.8 per cent this year, mostly reflecting some recovery in oil production.<\/p>\n

The fund noted that the country\u2019s fiscal deficit increased to 4.7 per cent of the Gross Domestic Product in 2016, up from 3.5 per cent in 2015, due to revenue shocks.<\/p>\n","protected":false},"excerpt":{"rendered":"

The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the Nigerian economy. The recommendation came in the Washington-based fund\u2019s regular assessment of Nigeria\u2019s economy. The report came on the heels of a recent visit by …<\/p>\n","protected":false},"author":11,"featured_media":10604,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[573],"coauthors":[2392,2393],"class_list":["post-11911","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-news","tag-imf"],"yoast_head":"\nDump multiple exchange rates, forex curbs, IMF tells FG - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/dump-multiple-exchange-rates-forex-curbs-imf-tells-fg\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dump multiple exchange rates, forex curbs, IMF tells FG - National Wire\" \/>\n<meta property=\"og:description\" content=\"The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the Nigerian economy. 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