Hope on the horizon as IMF acknowledges Nigeria’s economic reforms

BY KADIRI ABDULRAHMAN

At the recently concluded annual meetings of the IMF/World Bank Group in Washington, D.C., U.S., global stakeholders acknowledged the positive impact of Nigeria’s economic reforms and gave the country a clean bill of health.

On the sidelines of the meetings, many countries within the African continent received accolades for their resilience in the midst of a global economic storm.

The Director of the African Department in the IMF, Abebe Selassie, said that Sub-Saharan Africa showed resilience amidst global economic headwinds.

Selassie said that the continent had shown resilience in spite of a challenging global environment marked by slowing global growth, fluctuating commodity prices and tight financing conditions.

He said that, though growth remained steady, resource-dependent and conflict-affected countries still faced significant hurdles with modest improvements in per capital incomes.

According to him, global factors such as weaker external demand, divergent commodity prices and tightening financial markets continue to test the region’s economic resilience.

Selassie commended Nigeria for its efforts to address domestic revenue mobilisation and debt management.

He said that there was substantial scope to boost revenues through improved tax administration and policy reforms.

Selassie, however, said that success would depend on stronger technical capacity, political buy-in, and attention to the social impact of such reforms.

He said that Nigeria’s recent inflationary trend was consistent with monetary tightening.

“While monetary policy has been intelligently managed, I believe there is still some distance to go before achieving the desired stability,” he said.

The Division Chief, Fiscal Affairs Department of IMF, Davide Furceri, urged Nigeria to adopt smarter spending and stronger tax systems.

Furceri said that Nigeria’s ongoing fis- cal and structural reforms were neutral and well aligned with monetary policies designed to curb inflation and stabilise the economy.

He said that the IMF’s latest assessment of fiscal policy across developing economies, especially the Nigeria’s policy direction, was consistent with efforts to strike a balance between revenue mobilisation and efficient expenditure management.

“Currently, what we are projecting for Nigeria is a neutral fiscal stance, which we believe is consistent with monetary policies aimed at reducing inflation.”

He advised Nigeria to focus on revenue and expenditure sides of public finance.

“Nigeria has made significant progress in recent years; several laws have been passed to streamline the tax code, reduce tax expenditures and ease the compliance burden for businesses and coerce.

“These are steps in the right direction.”

Furceri called for greater efficiency in public spending to ensure better outcomes for citizens.

He said that optimising on how resources are allocated and spent could deliver substantial economic and social gains.

“In addition, it is important to increase social spending, particularly to support vulnerable households and ensure inclusive growth,” he said.

He urged Nigeria to continue to implement key fiscal and monetary reforms under its medium-term economic framework, fiscal discipline, improved revenue generation and enhanced transparency in public finance management.

Furceri said that IMF’s endorsement reflected growing confidence in Nigeria’s reform trajectory, even as the government pushes for policies aimed at boosting growth, reducing inequality and sustaining macroeconomic stability.

The Central Bank of Nigeria (CBN) assured foreign investors that the government would continue to advance reforms and unlock opportunities for sustainable investment and growth.

The CBN Governor, Yemi Cardoso, spoke to the investors in the sidelines of the annual meetings in Washington.

Cardoso said that the CBN and the Ministry of Finance were working hand in hand to ensure alignment, stability and clarity for investors.

“Nigeria’s focus remains clear, strengthening our fundamentals, advancing reforms and unlocking opportunities for sustainable investment and growth.

“We are encouraged by the progress made so far and remain confident that on- going reforms are laying a stronger foundation for a more resilient economy,” he said.

One highlight of the annual meetings was Cardoso’s election as the chair of the Intergovernmental Group of 24 (G-24), an influential bloc of developing countries.