By Andy Nssien
The International Monetary Fund (IMF) has stressed the need for structural reforms in Nigeria as a means to strengthen the per capita growth.
IMF said at a press conference on October World Economic Outlook that although there was a slight upward revision for growth in Nigeria this year that came mostly from strong agricultural production early in the year, it was not high enough to turn per capita growth into positive territory.
Two speakers at the press conference, Gita Copinath, the Economic Counsellor and Director of Research Department; Oya Celasun, Division Chief, Research Department, both from the IMF answered questions on the latest development in Nigeria.
Ms Copinath said in the case of Nigeria, a lot depended upon oil prices and oil prospects, but noted that there has been some weakness coming from that source.
“The important thing to keep in mind about Nigeria is that per capita growth remains weak. And this is why we call for structural reforms, she stated.”
According to Oya Celasun,“For some time now, we have been emphasizing the need for a comprehensive package to lift growth. One element of that will have to be stronger non‑oil revenue mobilization.”
Ms Celasun noted that Nigeria had one of the lowest rates of revenue in the world, which was hit hard by the drop in oil prices, adding, that was essential for the country to be able to spend more on priorities, such as social safety net and infrastructure.
Other areas, according to the IMF,were the need for tight monetary policy and a simpler unified exchange rate system.
Also, foreign exchange restrictions have also been distorting public and private sector decisions and holding back investment, the Fund stated.
According to the two speakers, strengthening the banking system’s resilience and continued stronger structural reforms, especially in infrastructure and the power sector and broader governance, were critical.
On the global economy, the IMF said it was downgrading growth for 2019 to 3 percent, its slowest pace since the global financial crisis.
It explained that growth continued to be weakened by rising trade barriers and growing geopolitical tensions.
“We estimate that the U.S.‑China trade tensions will cumulatively reduce the level of global GDP by 0.8 percent by 2020. Growth is also being weighed down by country‑specific factors in several emerging market and developing economies and also by structural forces, such as low productivity growth and ageing demographics in advanced economies,’ it stated.
“Now, we are projecting a modest recovery, to 3.4 percent in 2020, another downward revision of 0.2 percent from our April projections,”
