Dump your multiple exchange rates, lift FX restrictions, IMF tells Nigeria

Reuters




* Nigeria in first recession in quarter of century
    * IMF says Nigeria economy expected to grow 0.8 pct this
year
    * IMF review precedes talks on loans of at least $1.4 bln

 (Adds quotes, details, background)
    By Alexis Akwagyiram and Chijioke Ohuocha
    ABUJA, March 30 (Reuters) - The International Monetary Fund
urged Nigeria on Thursday to lift its remaining foreign exchange
restrictions and scrap its system of multiple exchange rates in
order to revive its economy, which is in its first recession in
25 years.
    The recommendation came in the Washington-based Fund's
regular assessment of the country's economy.  A staff report, an
accompanying document seen by Reuters and addressed to the IMF's
executive board, outlined a raft of failings in Nigeria's
handling of its economy. [nL5N1H146E]
    Nigeria fell into recession last year largely due to the
impact of low oil prices and militant attacks on energy
facilities in the Niger Delta oil hub. Crude sales account for
more than 90 percent of foreign exchange earnings and two-thirds
of government revenue.
    President Muhammadu Buhari has rejected a devaluation of the
naira currency and backed restrictions imposed by the central
bank that force firms to buy dollars needed for imports for a
premium on the black market, where the currency trades around 30
percent weaker than the official exchange rate.
    The fund said its directors "urged the authorities to remove
the remaining restrictions and multiple currency practices, thus
unifying the foreign exchange market and helping regain investor
confidence".
    Nigeria, Africa's most populous country, has at least five
exchange rates which include the official one, a rate for Muslim
pilgrims travelling to Saudi Arabia, one for school fees abroad
and a retail rate set by licensed exchange bureaux.
    The IMF's verdict comes weeks after the...

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