IMF UPDATE ON NIGERIA 29 June 2020
Excerpts from IMF media briefing on its updated Regional Economic Outlook for Sub-Saharan Africa (SSA) yesterday 29 June 2020
This is not the time of course to be aggressively introducing new tax measures, but of course there’s the long-standing challenge in Nigeria fiscal side of needing to have sufficient resources generated by the government from non-oil sources to provide investment in health and education and infrastructure.
The IMF Director, African Department, Abebe Selassie, gave the advice during a media briefing on its updated Regional Economic Outlook for Sub-Saharan Africa (SSA)
Excerpts:
Question:
MR. VILKAS: There is also a question, a follow up question from Simon Ateba from Today’s South Africa. He is looking how this coronavirus pandemic effect countries like Nigeria, Ghana, Kenya, Cameroon. What are the hardest hit regions there?
Answer:
MR. SELASSIE: On Nigeria, again, Nigeria is of course the oil exporting country, so the impact of the pandemic is again being compounded by the, you know, sharp decline in oil prices.
We are projecting GDP growth to contract by around 5 percent, 5.4 percent if I remember correctly, in Nigeria this year. So very significant hit to incomes.
We feel in the case of Nigeria, you know, it will be very, very important to have a very nimble policy response to ensure that, you know, the hit to their economy is not compounded by policy challenges.
This is not the time of course to be aggressively introducing new tax measures, but of course there’s the long-standing challenge in Nigeria fiscal side of needing to have sufficient resources generated by the government from non-oil sources to provide investment in health and education and infrastructure.
So there is that long-term agenda that needs to be addressed.
Right now fiscal policy can be supportive and needs to be supportive.
In addition of course it will be really important that on the monetary exchange range front also.
There is a response that will facilitate the much required, much needed adjustment of the economy to these real shocks.
So, you know, our projection of 5.4 percent is contingent on an nimble policy response and avoiding some of the challenges that we saw when oil prices declined in 2016, causing GDP to be depressed for an extensive period of time.
Subject to flexible and nimble policy response we feel there will be some recovery in Nigeria, but this year will be clearly a difficult one for the country.