Connect with us

Hi, what are you looking for?

Business News

Buhari’s Poor Management Responsible For Nigeria’s Economic Woes – IMF

The International Monetary Fund has said that efforts by the Muhammadu Buhari administration to save the naira by rationing foreign exchange have failed.

Punch reports that the IMF stated this in its policy paper on macroeconomic developments and prospects in low-income developing countries on Thursday.

The fund attributed economic failures in the country to “delayed/poorly managed policy adjustment.”

It stated, “Domestic policy failures cited include delayed/poorly managed policy adjustment to lower commodity prices (as in Nigeria, where foreign exchange rationing adversely affected debt service capacity of many corporates).”

The IMF also blamed the failures on lack of business confidence and delay in policy adjustment by Nigeria’s leadership.

It said that the challenges concerning foreign exchange had pushed inflation to double digits in Nigeria, Africa’s largest economy.

The IMF added, “There were sharp movements in currencies across many LIDCs during 2015. Further sizeable depreciations were recorded in 2016 in commodity exporters under stress,” the paper read.

It added, “Mongolia, where reserve levels have been significantly eroded, and Nigeria, where efforts to support the naira through foreign exchange rationing, have gradually crumbled.

“Inflation has risen to troubling levels in a handful of cases, concentrated in sub-Saharan Africa. Among commodity exporters, large exchange rate depreciations were a key contributor in Mozambique, Nigeria, and Zambia.”

According to the fund, Nigeria is affected by Boko Haram-led attacks in the North and disruptions to oil production in the Niger Delta region.

“Aside from direct damage and increased security outlays, conflict situations undermine business confidence, investment, and tourism,” it stated.

It added that Nigeria’s economic problems affected neighbouring countries such as Chad and Benin Republic.

The fund stated, “External developments have predictably played an important causal role in the emergence of financial sector stress, through falling commodity prices, declining remittances, and adverse spillovers from neighbours — as in the impact of Nigeria’s economic difficulties on Benin Republic.

“That said, teams’ assessments indicate that poor macroeconomic policies and weak supervision have also played a significant contributory role.”

It said that the recent experience of LIDCs underscored the relevance of some general messages for developing countries in terms of building economic resilience, which include “the value of having a diverse export base to allow countries handle adverse external shocks, and hence the importance of promoting economic diversification.

Others are the importance of building large foreign reserve/asset positions during “good times” in countries where exports remain highly concentrated; and the need to build a strong broad based domestic tax system drawing from a diverse set of sectors and tax instruments, to strengthen self-reliance in financing essential public service.

 

 

__________

Follow us on Twitter at @thesignalng

Copyright 2015 SIGNAL. Permission to use portions of this article is granted provided appropriate credits are given to www.signalng.com and other relevant sources.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

Related

News

Nigerians are still bearing the effects of the policies of ex-President Muhammadu Buhari, Adams Oshiomhole, senator representing Edo North Senatorial District, has said. Some...

News

Muhammadu Buhari, has said that he deliberately refused to release his West African Senior School Certificate (WASC) in 2015 when he took over power...

News

Femi Adesina, former spokesman to former President Muhammadu Buhari has revealed that the president’s plane nearly crashed with him and his aides in November...

News

Former President Muhammadu Buhari has said that he was happy when incumbent President Bola Tinubu jetted up the petrol pump price on May 29,...

Copyright ©