The International Monetary Fund has acknowledged the pressure on the Nigerian naira and indicated that Nigeria has the option to seek a loan from the IMF to stabilise its currency if deemed suitable.
The IMF also affirmed that recent exchange reforms and measures taken by Nigerian authorities were appropriate.
Furthermore, the Washington-based lender expressed its support for the recent decision by the Central Bank of Nigeria, led by Olayemi Cardoso, to lift an eight-year ban on foreign exchange for items including cement, rice, poultry products, and 40 others.
These statements were made during the World Bank Group/IMF Meeting in Marrakech, Morocco.
The IMF reported that as of August, inflation in Nigeria remained persistently high at 26 percent, while the naira continued to face pressure.
The domestic currency, which had depreciated from approximately 450 naira to the dollar to an average of 760 naira to the dollar after President Bola Tinubu’s exchange reforms, continued to decline in the parallel market, reaching 1045 naira to the dollar on a recent Thursday.
Additionally, the new central bank governor intends to set restrictions on the Central Bank of Nigeria’s fiscal interventions and is considering measures to tackle inflation and maintain price stability.
Cardoso said, “These problem statements need in-depth review by the new Central Bank leadership team to determine what mechanisms are currently working, what can be tweaked or dispensed with, and what new tools need to be introduced.”
On how the CBN can be refocused to support economic growth, he said, “The economic policy proposals of the administration identify a set of fiscal reforms and growth targets that will achieve $1 trillion in GDP within eight years.
When considering the reorientation of the Central Bank of Nigeria (CBN) to promote economic growth, he commented, “The economic policy proposals of the administration identify a set of fiscal reforms and growth targets that will achieve $1 trillion in GDP within eight years.”
A review of selected BRICS and MINT nations, which share large populations and similar development characteristics with Nigeria, highlights key macroeconomic indicators that could guide Nigeria’s economic path if the proposed reforms are diligently implemented. Economies exceeding $1 trillion typically exhibit indicators such as moderate inflation, substantial foreign reserves, and the ability to swiftly recover from cyclical economic downturns.