Following the International Monetary Fund (IMF) Mission visit to Nigeria, there is a new look: a Real GDP of 6.8 per cent in the third quarter of 2013 and a subdued 7.8 per cent single digits inflation rate. This is largely credited to the robust performance of agriculture, services and trade.

The IMF stated that Nigeria's Fiscal consolidation is progressing well but that there was need for preserved momentum in ongoing election cycle. They also revealed that key public financial management reforms such as the implementation of a Treasury Single Account (TSA) and integrated information management systems were underway. However, they were concerned that the lower-than-budgeted oil revenues is negatively affecting budgetary plans at Federal, State, and Local levels, and so suggested rebuilding fiscal buffers to manage oil revenue volatility.

“Oil theft/production losses have adversely impacted export receipts and government revenues, leading to a significant drawdown from the Excess Crude Account. Inflation declined to 7.8 per cent (end-September 2013) from 12 per cent at end of 2012, in part owing to lower food prices and monetary policy implemented by the Central Bank of Nigeria”

They called on moving toward a sustainable non-oil primary deficit path which will require resolve in continuing fiscal consolidation. They said this would be made possible by resisting procyclical election spending, mobilizing non-oil revenue, improving efficiency in the public sector, and strengthening transparency in oil sector governance.

“The exchange rate has been stable and the banking sector is well capitalized with low levels of non-performing loans” IMF

They approved the current monetary stance of CBN Governor - Sanusi Lamido, who has said severally that the policy was dedicated to sustaining low inflation and a stable financial system. They however cautioned that risk should be managed as the country could be affected by a decline in oil prices due to oil theft and security challenges. But notwithstanding, the Nigerian economy will be able to manage such shocks given relatively flexible exchange rate regime, improved financial crisis management capacity and a stable banking system on the condition of high fiscal buffers. This sustained high rate of growth is needed to reduce unemployment and poverty.
While they commended the ongoing initiatives to strengthen the supervisory framework such as supervision of banking groups, they recommended that Asset Management Corporation of Nigeria's activities should phase out gradually.

The Mission met Finance Minister and Coordinator Minister of the Economy, Ngozi Okonjo-Iweala, Central Bank of Nigeria Governor, Sanusi Lamido Sanusi, senior government officials, members of the Legislature and representatives of the private sector from November 13th to November 26th, 2013.


Report: Unen Ameji.

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