By Chinwendu Obienyi
The International Monetary Fund (IMF) has endorsed the economic reforms implemented by President Bola Ahmed Tinubu’s administration, noting significant strides in addressing Nigeria’s economic and social challenges.
This is according to the recent Article IV Consultation seen by Daily Sun on Thursday.
The Executive Directors of the IMF lauded the government’s decisive actions in areas such as revenue mobilization, governance enhancement, and the strengthening of social safety nets.
The IMF view is in sharp contrast to the view of many Nigerians who complain daily of high inflation, weakening purchasing power, lower wages, and high income inequality.
The IMF’s Executive Directors commended Nigeria’s new administration for its “bold reforms” which aim to restore macroeconomic stability, reduce poverty, support social cohesion, and accelerate inclusive and resilient growth.
They highlighted the administration’s particular focus on revenue collection and the effectiveness of policy frameworks as foundational to these improvements.
According to the body, inflation control and market confidence are at the forefront of the administration’s economic strategy.
The IMF further highlighted the importance of maintaining a tight monetary policy and flexible exchange rates to curb inflation.
The statement also welcomed the removal of foreign exchange market distortions, along with recommendations for a well-designed foreign exchange intervention framework.
Further, the IMF supported Nigeria’s shift towards an inflation-targeting regime, recommending the strengthening of the Central Bank of Nigeria’s independence to ensure effective transition. They also advised caution with any amendments to the CBN Act that might undermine the bank’s autonomy.
On the social front, the IMF praised the government for reinstating the cash transfer program, essential in combating acute food insecurity. The IMF directors recognized the necessity of scaling up this initiative alongside a comprehensive revenue mobilization strategy.
This strategy includes enhancing tax enforcement and broadening the tax base to generate funds crucial for development spending and social protection, all while maintaining debt sustainability.
The financial oversight body also urged the continuation of regulatory reforms, notably recommending an increase in the minimum capital requirements for banks and the unwinding of regulatory forbearance measures introduced during the pandemic.