Dipo Olowookere
By Dipo Olowookere
The International Monetary Fund (IMF) has advised the federal government of Nigeria led by President Muhammadu Buhari to give priority to revenue mobilisation.
Speaking at an IMF virtual spring meetings on Wednesday, the Director of African Department at the IMF, Mr Abebe Aemro Selassie, stated that doing this will help the country overcome some of the challenges posed by the coronavirus pandemic in the medium-term.
He said government needs to pool resources together to provide infrastructure and health facilities in the country as well as human development.
“The government has enough resources that it can devote, really, the infrastructure; building the network of universities, and public education entities, that Nigeria so badly needs. So, that really is the number one medium-term priority,” Mr Selassie said while responding to questions from Nigerian journalists during the meeting.
Speaking further, Mr Selassie said over the next 4 or 5 years, government must focus on ways to Nigeria in a position where sufficient revenues can be raised to address the development spending needs of the country.
“In the near-term, of course, no resource should be spared to be able to put the health crisis, the health threat, that Nigeria faces from the COVID-19 pandemic. So, we see scope for more supportive policies,” he advised.
He said Nigeria has requested for support under the rapid financing instrument, noting that “this is a very quick dispersing resource that government can use to strengthen health spending to provide social protection to people.”
“There’s also scope for having a monetary exchange rate policy framework that will be supportive of the fiscal stance. So, we look for those policies to be adopted to support Nigeria put this crisis behind it,” he added.
Earlier in his address at the gathering, Mr Selassie said outlook in Sub-Saharan Africa is expected to contract by 1.6 percent in 2020.
He stated that the hit to growth reflects a poisonous cocktail of shocks that is affecting livelihoods and economic activity.
“Swift and decisive measures, closing borders, shattering businesses, requiring people to stay at home have had to be adopted to halt the advance of the virus before it overwhelms already stretched health services, but will also disrupt production and reduce demand sharply,” he added.
He said further that, “Coupled to this plummeting global demand will exacerbate the economic impact greatly by reducing demand for the region’s goods and services, tourism, remittance flows, tighter global financial conditions have already triggered significant capital outflows from the region, and will also adversely impact the prospect for investment going forward.”
“And commodity exporters, will suffer from an additional sharp decline in key commodity prices adding significantly to the region’s difficulties,” Mr Selassie submitted.
