Depressed private consumption, investors’ attitude, causes of Nigeria’s slow economy recovery – IMF

The International Monetary Fund (IMF) has said depressed private consumption and investors’ wait-and-see attitude are the major causes of the slow pace of Nigeria’s economic recovery.

The IMF came out with this position after a visit by its team, led by the Senior Resident Representative and Mission Chief for Nigeria, Amine Mati.

The development, the statement explained “kept growth in the first half of the year at two per cent, a rate significantly below population growth. Headline inflation has fallen, reaching its lowest level since January 2016, helped by lower food price inflation.”

Nigeria, the statement noted, urgently requires, “a comprehensive package of measures,” to reduce vulnerabilities and raise economic growth in the country.

Mati, noted that a comprehensive package of measures—whose design and implementation would require close coordination within the economic team and the newly-appointed Economic Advisory Council, was urgently needed in the country.

“Spurred by one-off increases in imports, the current account turned into a deficit in the first half of 2019 after three years of surpluses.

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Gross international reserves have fallen to below $42 billion at end-August 2019, mainly reflecting a decline in foreign holdings of short-term securities and equity.

“The exchange rate in various windows remained stable, helped by steady sales of foreign exchange by the Central Bank of Nigeria (CBN).

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“Carryover from 2018 to 2019 helped increase public investment spending in the first half of 2019, but revenue underperformed significantly relative to the budget target in the first half of 2019”, the report added.