The Managing Director, International Monetary Fund, Ms Christine Lagarde, said this in concluded her four-day visit to Nigeria with a statement that poverty, inequality and unemployment remained too high in the country.
Lagarde said this in a statement posted on the IMF website on Thursday night.
The IMF boss was quoted as commending the administration of President Muhammadu Buhari for the steps so far taken in repositioning the economy, noting that while these were being taken, more attention should be paid to dealing with the difficulties presented by falling crude oil prices.
She said while the Nigerian economy had been well diversified away from agriculture and oil, the reduced emerging market demand and tightening of global financial conditions had led to sharply lower export earnings and government revenues.
This, according to her, has made it difficult to get financing for investment in the non-oil sector.
She said, “In my meetings with the authorities, we discussed how to maintain economic progress while making the transition towards more inclusive and sustainable growth. Poverty, inequality, and unemployment levels remain too high, in addition to the challenge of the Boko Haram insurgency.
“Nigeria also has to deal with the difficulties presented by falling oil prices, reduced emerging market demand, and tightening global financial conditions. This has led to sharply lower export earnings and government revenues. The non-oil sector has also been affected and financing for investment is hard to come by.”
Against this background, the IMF boss said a range of policy recommendations related to improving the competitiveness of the Nigerian economy were made to the government.
Some of these are the need to focus on the critical area of infrastructure, where power, transport and housing are especially key; identifying ways to broaden the revenue base, particularly to create additional fiscal space to offset the impact of lower oil prices; and the need for careful decisions on borrowing, public spending and managing the cost of fuel subsidies.
Lagarde added that there was a need to safeguard priority social sectors and the most vulnerable groups.
This, she noted, would require a package of measures involving business-friendly monetary policy, flexible exchange rate policy and disciplined fiscal policy, as well as the implementation of structural reforms.
Lagarde said, “Nigeria is the largest economy in sub-Saharan Africa, with the largest population, and its important role at the regional level has become increasingly recognised.
“The economy is well diversified, no longer dominated by agriculture and oil, with services accounting for almost half of the GDP, including a significant home-grown film industry and innovative start-ups from fashion to software development.
“Nigeria has also experienced a decade of strong growth, averaging 6.8 per cent a year. In 2015, however, growth is expected to slow to about 3 ¼ percent, with a slight recovery in 2016.
“I complimented the authorities on their efforts to address corruption, particularly the decision to publish monthly data on the finances and operations of the Nigerian National Petroleum Corporation.
“Transparency and the rule of law will be crucial in reducing constraints to the country’s growth.”
While thanking the government and people of Nigeria for their welcome and warm hospitality, Lagarde said the IMF remained the country’s committed partner as it moves forward to face the challenges of the future.