The International Monetary Fund (IMF) has recommended that the Central Bank of Nigeria unifies the exchange rate system for stronger economic growth in the country. The IMF gave this advice during the unveiling of the World Economic Outlook report released in Washington DC.
The global body made it known that foreign exchange restrictions in Nigeria were distorting public and private sector decisions and holding back investment and as such it was imperative that the government comes up with measures to boost the non-oil revenue in order to spend more on social safety programs.
Speaking on the need of the Federal Government to implement stronger reforms to boost the economy, the IMF counselor, Gita Gopinath said that the per capital growth in Nigeria was weak and needed to be addressed.
The exchange rate system includes the CBN’s Investors and Exporters Forex Window; the CBN official rate; the parallel market rate; the Retail Secondary Market Intervention Sales and the wholesale SMIS.
Oya Celasun, IMF’s Divisional Chief, Research Department called on the CBN to strengthen the banking sector resilience.
“Nigeria has one of the lowest rates of revenue in the world and this is hit hard by drop in oil prices. That is essential for the country to spend more on priorities, such as social safety and infrastructure.
“Other areas are the need for a tight monetary policy and a simpler unified exchange rate system. Foreign exchange restrictions have also been distorting public-private and public sector decisions and holding back investments,” she said.
According to Celasun, the key areas needed to be focused on are infrastructure, power, and broader governance.