The International Monetary Fund (IMF) has lauded Nigeria’s recent economic reforms, like Naira flexibility and fiscal transparency in driving a positive outlook.
The Assistant Director in the IMF’s Global Markets Analysis Division, Jason Wu, gave the commendation at a news conference to unveil the Global Financial Stability Report in Washington on Tuesday.
Wu said that the steps were in the right direction towards restoring macroeconomic stability and strengthening investor confidence.
He said that the depreciation of the Naira should not necessarily be viewed negatively, adding that a more flexible exchange rate would help restore balance in the economy.
“A depreciating exchange rate is not necessarily a bad thing, it may actually be a good thing in order to restore equilibrium.
“We have, indeed, seen in Nigeria many steps to strengthen policy frameworks, such as on the monetary policy side, and we generally recommend moving towards more flexibility,” he said.
Wu said that Nigeria’s efforts to bolster revenue collection and enhance transparency in the management of foreign exchange reserves has begun to yield positive results.
“Revenue collection has strengthened in Nigeria, and transparency in terms of FX reserve positions has improved.
“I think all of these have contributed to lower inflation from more than 30 per cent last year to 23 per cent this year. They have also improved FX reserve positions,” he said.
He said that the overall direction of Nigeria’s economy appeared positive, with stronger fundamentals emerging under the ongoing policy reforms.
He said that while Sub-Saharan Africa had shown resilience, the region still faced significant challenges.
“Sub-Saharan Africa continues to face headwinds. While growth has been pretty strong during this period when financial conditions are easy and capital flows are resuming.
“It is possible that previous capital flow surges and retrenchment cycles could recur.
“When that happens, it exposes vulnerabilities, especially in economies dependent on foreign investments,” Wu said.
He said that to safeguard these gains, African countries including Nigeria, needed to sustain fiscal discipline, deepen structural reforms and strengthen debt management frameworks.
“It is important for countries to continue improving fundamentals on the fiscal and monetary policy side,” he said.
He said that the IMF’s latest assessment aligned with recent data showing improved investor sentiment toward Nigeria, following a series of reforms in exchange rate unification, monetary tightening, and fiscal transparency.
“It is all aimed at stabilising Africa’s largest economy,” he said. (NAN)(www.nannews.ng)
