By Omoh Gabriel
A Nigerian delegation to the Spring Meetings of the IMF/World Bank will leave for Washington today (Monday). The delegation made up of Minister of Finance, Dr. Ngozi Okonjo-Iweala, CBN Governor, Sanusi Lamido Sanusi; and other Ministry of Finance and CBN officials will be engaging with their counterparts at IMF and World Bank meeting on a positive note.
The IMF staff team that visited the country last month had given the country’s economic management team a pass mark. The report, which read in part said “Executive Directors commended the authorities for prudent macroeconomic policies that have underpinned a strong economic performance in recent years. Looking ahead, Directors agreed that widespread unemployment and poverty remain key challenges for policymakers, and called for renewed efforts to make economic growth more broad-based and inclusive.
“Directors supported the authorities’ strategy of consolidating the fiscal position while opening up policy space for needed investment in infrastructure and human capital. To this end, they underscored the need to improve tax administration, better prioritise public expenditure, strengthen public financial management, and improve the fiscal framework.
“In particular, they encouraged the authorities to reduce poorly-targeted fuel subsidies, adopt a rule to set the reference oil price in the budget, and fully operationalise the Sovereign Wealth Fund as soon as possible. Efforts to mobilise public support for these reforms should be intensified.
“Directors considered the current tight monetary stance to be consistent with the authorities’ objective of reducing inflation to single digits. They also took note of the staff’s assessment that the exchange rate in real effective terms is broadly in line with fundamentals. Directors commended the authorities’ success in restoring financial stability after the 2009 banking crisis.
In light of this achievement, they recommended winding down the operations of the Asset Management Corporation of Nigeria, AMCON, to curb moral hazard and fiscal risks. Directors welcomed the central bank’s commitment to address supervisory and regulatory gaps identified in the Financial Stability Assessment Update, particularly the need to strengthen cross-border supervision and the regime against money laundering and terrorism financing.
Directors concurred that wide-ranging reforms are key to make growth more inclusive. They agreed on the importance of supporting sectors with high employment potential, not through protectionist measures or tax incentives but rather with initiatives to improve governance, the investment climate, and competitiveness.
Directors welcomed reforms underway in the energy sector, and looked forward to an early passage of the Petroleum Industry Bill which would boost investment, government revenue, and fiscal transparency. They also encouraged the authorities to promote market-based access to credit for small- and medium-sized enterprises.