ABUJA, April 5 (Reuters) - The International Monetary Fund (IMF) warned Nigeria its economy needs urgent reform in a report published on Wednesday that highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market.


The document, a report from IMF staff which Reuters saw an earlier version of last month, outlines a raft of failings in Nigeria's handling of Africa's largest economy and could affect talks over at least $1.4 billion in international loans.

It strikes a more critical tone than the Fund's board adopted in a statement last week, though that also said Nigeria should lift its remaining foreign exchange restrictions and scrap its system of multiple exchange rates.

Nigeria fell into recession in 2016, its first in 25 years, largely due to the impact of low oil prices and militant attacks on energy facilities in the Niger Delta oil hub. Crude sales account for more than 90 percent of foreign exchange earnings and two-thirds of government revenue.

The country, whose economy contracted 1.5 percent last year, has also been plagued by a conflict with Boko Haram militants since 2009, creating a humanitarian crisis in the northeast which authorities are struggling to handle.

The Washington-based fund's analysis came on the same day that Nigeria's President Muhammadu Buhari held a launch ceremony for a flagship economic recovery plan.

But the IMF said the plan, criticised by economists for including few concrete measures, is not enough to drag Africa's biggest economy out of recession.

If Nigeria's economy is to recover, "much more needs to be done", the IMF said in the staff report.


It also urged the major oil producer to introduce immediate changes to its exchange rate policy - characterised by central bank curbs, multiple exchange rates and an artificially high naira valuation - or risk "a disorderly exchange rate depreciation".

The presidency, budget and planning ministry, finance ministry and central bank did not immediately respond to requests for comment.

The Fund said the Nigerian authorities were concerned about the IMF staff report's view.

Nigerian authorities 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.

Nigeria has not asked the Fund for fiscal support but its recommendations may influence institutional lenders ahead of the annual spring meetings with the World Bank.

The World Bank has been in talks with Nigeria for more than a year over an application for a loan of at least $1 billion and the African Development Bank has $400 million on offer. But talks have stalled over economic reforms. (Reporting by Paul Carsten in Abuja and Alexis Akwagyiram in Lagos; Editing by Alison Williams)

Source: http://www.gistbell.com/2017/04/imf-says-nigeria-economy-needs-urgent.html

London bridge is falling down

CBN should stop defending naira with huge injection of dollars into fx market, foreign investors will be scared to invest because the exchange rate can collapse any day.

Power tussle,cluelessness and ineffectiveness plunged us into this mess,instead of increase foreign exchange by increasing productivity and less dependant on foreign goods we injecting dollars in to the economy,when d dollar finishes dat back to where we started,let make illegal refineries legal

Odingo1:
CBN should stop defending naira with huge injection of dollars into fx market, foreign investors will be scared to invest because the exchange rate can collapse any day.

You dey mind d em? They don't have the courage to do the right thing.

Yeah but the government not listening. It's stupid to have bunch of exchange rates. We need to get our inflation under control. We can't burn through forex forever. The restrictions hamper business productivity aswell. The ERGP was OK but the need to padd legislation that will complement plan.

It also urged the major oil producer to introduce immediate changes to its exchange rate policy - characterised by central bank curbs, multiple exchange rates and an artificially high naira valuation - or risk "a disorderly exchange rate depreciation".

The World Bank has been in talks with Nigeria for more than a year over an application for a loan of at least $1 billion and the African Development Bank has $400 million on offer. But talks have stalled over economic reforms.

Let's hear how the dullard that have hibernating in London but forced back home and his deluded zombies will blame GEJ this time around again.

Borrowing to service old debt....

Very funny country

Odingo1:
CBN should stop defending naira with huge injection of dollars into fx market, foreign investors will be scared to invest because the exchange rate can collapse any day.

If they don't inject whose going to invest there, what's there to invest when people are running to other countries like Kenya and Ghana, with stable economy

Sorry IMF our political leadership cannot comprehend what you just laid out

MyNewJackeT:


If they don't inject whose going to invest there, what's there to invest when people are running to other countries like Kenya and Ghana, with stable economy

There's plenty of people and businesses that find Nigeria to be good investment. The issue is the capital controld for some. There's other issue but we don't laundry list. The move to allow free floating currency helped Egypt gain FDI and greater stabilty.

Buhari should be in jail he's a bad luck to Nigeria

There are plenty of things to cut off so that we can have a long term sustainable economy but we Nigerians are not known with patience.
Continuous injection of dollars into the FX market will always create temporary and artificial solution to our economy.
It is high time we deregulated the market and allow the major players to establish the exchange rate

There are plenty of things to cut off so that we can have a long term sustainable economy but we Nigerians are not known with patience.
Continuous injection of dollars into the FX market will always create temporary and artificial solution to our economy.
It is high time we deregulated the market and allow the major players to establish the exchange rate .

We really need Dangote's refinery right now