IMF: Fuel subsidy, exchange rate reforms to boost Nigerian economy

27 Sep IMF: Fuel subsidy, exchange rate reforms to boost Nigerian economy

IMF representative in Nigeria Ari Aisen, has said fuel subsidy removal and exchange rate unification will lead to a better outlook for the Nigerian economy.

He said on Tuesday in an interview that the removal of fuel subsidies and unification of exchange rate has to continue for Nigeria to reach macroeconomic stability.

“After the position that needs to be well managed to avoid potential reversal, policies of subsidising fuel, and controlling exchange rate will lead to a much better outlook for the Nigerian economy,” Aisen said.

He stated that if inflation can get lower, the exchange rate gets predictable and investment can start coming into Nigeria which is a free shoot of possibilities. The potential has been there and will continue to be there and needs to be unlocked.

Aisen said GDP growth has been soft and it was expected because of the higher prices of fuel, inflation which has been high and biting the income of Nigerians, has impact on consumption but we are in a transition period and the initial move of the reforms was in the right direction.

While speaking on Nigeria’s debt during the interview, he said the issue of debt has been discussed broadly and the needs of the government should be contained so that debt stock avoids growing further away from a reasonable amount.

“Debt to GDP has been on a moderate level in Nigeria and it is very important that policies are put in place containing the fiscal policy, to reduce financial needs of the government,” he said.

Aisen said the removal of fuel subsidies was a very important step because fuel subsidies ate into the financial needs of the country. He said growth has to be inclusive and there is a need for job creation while citing the importance of people being included in economic activities,