From ISAAC ANUMIHE, Abuja
International Monetary Fund (IMF), yesterday disclosed that 80 per cent of petroleum products consumed in Benin Republic are smuggled from Nigeria. The fund, however, warned Nigeria against expansionary fiscal policies, in view of the uncertainty in the global economic scene, Presenting the Regional Economic Outlook for Sub-saharan Africa, IMF’s Senior Resident Representative, Nigeria, Mr Scott Rogers, said Nigeria must take advantage of the current growth to strengthen her fiscal position by saving for the rainy day. He was of the view that early world economic recovery is not yet in sight. “The global economic outlook remains uncertain.
The context has continued to witness slowing growth, mostly marked in the advanced economies. The US housing prices remain depressed, and the nation’s weak economy is impacting negatively on many other countries of the world because the US is an export destination of many countries of the world.
“The US economy is recovering but the recovery is still weak. If the world economy remains weak, it will continue to affect countries of the world especially those with strong ties with the US and the Euro area which could actually go into recession.
Export growth in Sub-Sahara Africa has remained weak due to the weakening economies of the advanced countries,” he said. IMF further noted that the situation could be worse if by January, American President Barak Obama fails to reach a deal with the Congress to raise the deficit ceiling, as according to him.
“That will mean rise in tax rates and cut in government expenditure across board, which could further weaken the growth or even throw the economy into recession,” he said, while urging the Federal Government to come up with policies through which to save as much funds as possible, to avoid undue increase in government spending, and avoid a burst if oil prices crash.
For him, Nigerian economy stands the risk of being faced with lower crude oil prices due to weak global economy and that a high oil price benchmark, as being proposed by the National Assembly, could be detrimental to the economy. Rogers advised that the nation should generate fiscal surplus while oil prices are high and use it to build the nation’s reserves, instead of depleting the Excess Crude Account.