The IMF said in the report that the outlook for growth had improved but remained challenging.
“Comprehensive and coherent” economic policies “remain urgent and must not be delayed by approaching elections and recovering oil prices,” it stated in its annual Article IV review of Nigeria’s economy.
“Higher oil prices would support a recovery in 2018 but a ‘muddle-through’ outlook is projected for the medium term under current policies, with fiscal dominance and structural constraints leading to continuing falls in real GDP per capita,” the IMF added.
In the report, it identified risks to growth, including additional delays to implementing policies and reforms ahead of the 2019 elections, security tensions, and oil prices, a fall in which could see capital flows reversed.
“Further delays in policy action, including because of pre-election pressures, can only make the inevitable adjustment more difficult and costlier,” the report added.
The lender repeated its call for Nigeria to simplify its complex foreign exchange system, a bugbear for the IMF for more than a year, which has left large gaps between official rates and various windows that certain groups can use to get other rates.
“Moving towards a unified exchange rate should be pursued as soon as possible. The IMF staff does not support the exchange measures that have given rise to the exchange restrictions and multiple currency practices,” it stated.
The Fund further singled out the central bank, saying it should discontinue direct interventions in the economy.
