The International Monetary Fund has said Nigeria’s economy needs urgent reform.

In a in a report published on Wednesday, it highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market.

The document, a report from the IMF staff which Reuters saw an earlier version of last month, outlined a raft of failings in the Federal Government’s handling of the economy and could affect at least $1.4bn in international loans.

The report expressed the issue in a more critical tone than the IMF’s board adopted in a statement last week, although it also said Nigeria should lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates.

The Washington-based fund’s analysis came on the same day President Muhammadu Buhari launched the Economic Growth and Recovery Plan in Abuja.

But the IMF said the plan, criticised by economists for including few concrete measures, was not enough to drag the economy out of recession.

If Nigeria’s economy was to recover, “much more needs to be done”, the IMF said in the staff report, Reuters reported.

It also urged the Federal Government to introduce immediate changes to the exchange rate policy – characterised by the Central Bank of Nigeria curbing, multiple exchange rates and an artificially high naira valuation – or risk “a disorderly exchange rate depreciation.”

That naira overvaluation is “somewhere to the tune of 10 to 20 per cent,” the IMF’s Mission Chief for Nigeria, Gene Leon, said in a separate telephone media briefing.

Additionally, Leon said the Federal Government’s 2017 projections for non-oil revenues were more optimistic than the IMF’s, and the government needed to increase tax levels to diversify its income.

The Presidency, Budget and Planning ministry, Finance ministry and the CBN did not immediately respond to requests for comment, Reuters reported.

The fund said the Federal Government officials were concerned about the IMF staff report’s view.

The government had said further measures were under way which included the implementation of a more flexible foreign exchange market and “maintaining tight monetary policy to underpin price stability”, according to the IMF report.

http://investorsking.com/naira-overvalued-20-says-imf/

Okay!

Nigeria spent $2.6bn on Boko Hiram victims in 2016

Nigeria shared/is sharing billions Paris loan refunds to state

The same Nigeria is busy looking for loans and worried about $1.4bn

It isn't the Naira that has valuation problems, it is those in charge of the Naira that are over valued.

This government is overvalued. It is a govt of mismanagement.

Nigeria want to manipulate with nothing to export and little reserve from oil. Expect naira to depreciate by 40% befor mid 2018

All of these are dangerous bridges... We'll definitely cross it... God bless Naija..

@Truth234, do you agree with IMF?

with this government na only God go help us cause we're on our own in this country

Following!

Adesiji77:
@Truth234, do you agree with IMF?

IMF is a confused international organisation with little to no real knowledge of the local economy. Imagine, the same IMF that said the Naira would plunge to 1000 against the US dollar without free floating it is now saying Naira is overvalued by 10-20%. Add that difference to the current exchange rate, you will get about 420/$. So what happened to the 1000/$ projection?

In Seun Kuti's voice, IMF, International ModaFcker.

The cost of governance in Nigeria is our problem.

Private schools, especially secondary and primary schools charging over 200k is a problem.

When an SSA has his or her own branch of aides and personal assistants that government also pays in huge sums, that is a problem.

When our senators are paid like robbers when all they do is clown about and do absolutely nothing relevant, that is a problem.

bad belle people

Who IMF help?

jegz25:
bad belle people

No mind them

Go help Greece and leave us alone

If you are in the US or have relatives in the US trying to send money to naija, I will exchange the funds at 330/$, simply deposit into my US bank account and receive instant funding into your Nigerian account. Avoid western Union's high fees and delays.
I use the following banks: Chase, Bank of America, Wellsfargo, Citi, USbank, PNC, Suntrust, Ally and TD bank.

See contact in signature....

Scratching my head......

Don't know what to say

YES we didn't save for the rainy days...YES, most African leaders stole their countries' riches dry. .

BUT

I have never seen IMF speak / take action that would actually benefit Africa. They always suggest we should devalue so that they - the West can buy off our "stuff" at a cheaper rate.

Never saw them clamouring for the US to devalue during the 2008 recession or UK during Brexit.

Forgive my armchair economics if I am wrong. This is my personal opinion and perception.

PS- those advocating for a free float of the Naira...by the time it reaches 1000- 2000 / $, your eyes would clear. Then you won't even afford to be on Nairaland to post rubbish.

Sad truth is, Nigeria has nothing to offer but oil. The Naira needs to be defended as a short term measure, while we build the framework for better electricity, water, policies which would benefit us in the long-term.

Only developed countries can afford a free float because they have all the infrastructure in place

What concern ordinary man with IMF.
what we need is good governance and everything will fall in place

MakeADifference:
Nigeria spent $2.6bn on Boko Hiram victims in 2016

Nigeria shared/is sharing billions Paris loan refunds to state

The same Nigeria is busy looking for loans and worried about $1.4bn

It isn't the Naira that has valuation problems, it is those in charge of the Naira that are over valued.

This government is overvalued. It is a govt of mismanagement.

Bull's eye

It is true that the Naira is overvalued.

Proof:
What do you think will happen if CBN suspends their almost daily injection of Dollars into the economy?

The Naira will adjust to its true level N520/$1

So sad!

Whose fault is that?
















Excellent nonsense.

Wetin concern them
Na by force we must devalue our naira

Truth234:


IMF is a confused international organisation with little to no real knowledge of the local economy. Imagine, the same IMF that said the Naira would plunge to 1000 against the US dollar without free floating it is now saying Naira is overvalued by 10-20%. Add that difference to the current exchange rate, you will get about 420/$. So what happened to the 1000/$ projection?

In Seun Kuti's voice, IMF, International ModaFcker.

If not for the temporal solution of pumping money into the system, the dollar would have sold for N1,000. Truth be told, we have a confused government. Why should we have multiple exchange rates, why is there restrictions on importation when we have not solved our economy problems.

I DON'T NO MUCH ABOUT FINANCE, BUT ANYTIME I HEAR OF, IMF OR WORLD BANK, A VERY COLD CHILL RUNS THROUGH MY SPINES.

The idea of increasing the tax should not even be mention cos what has been achieved with the ones in place afterall Qatar an oil producing country has 0% tax. Nigeria's problem is corruption cos as u increase the tax u increase more money for the likes of Saraki and his gang as well as the useless demomic senseless and beastlike governors and their cronies to embezzle.
What of spending so much on political officer holders that add no value to the economy dem no talk that one
If them no get sense to know how to generate more money instead of increasing tax then let me tell them what to do.
1. Remove security votes
2 Remove constituency allowances
3. Reduce the salaries of all political offiice holders by 90% cos what they earn is outrageous
4 Pass a bill for death penalty for corruption.
Believe me you will see there is no need to increase the tax which wud make life harder for already poor masses
Wey BEN BRUCE wey dey yarn trash about common sense? His presence in the senate could not add sense to them cos he is like them. You see them blame FG as if they are not part of the govt

kennygee:
The cost of governance in Nigeria is our problem.

Private schools, especially secondary and primary schools charging over 200k is a problem.

When an SSA has his or her own branch of sides and personal assistance that government also pays in huge sums, that is a problem.

When our senators are paid like robbers when all they do is clown about and do absolutely nothing relevant, that is a problem.

Th bolded is attributed to corrupt practices by our leaders which unfortunately transcend to ordinary citizens when he/she is lucky to join the league of bandits will become one of them as well. The problem is the corrupted system with no penalty for the culprits.

Look @South Korea president, she was convicted for fraudulent and corrupt practices which she was sacked immediately and will face 10years imprisonment judgement.

Here in Nigeria, we do jungle justice or perhaps sentence someone who stole N50 bread to 20years imprisonment while the big thieves are seen as hero.

"Example kan sha ni ibori to de lati ilu oyinbo, Awon ara e yin bi olorun"

Don't mind them. let them keep pumping in dollars.
pangolo economics...

nonsense economic team!!