Nigeria : 2017 Article IV Consultation- Press Release; IMF Staff Report
The International Monetary fund, IMF yesterday, said the naira is overvalued by 10 to 20 per cent. Head of IMF Mission in Nigeria, Gene Leon, stated this during a telephone media briefing on the IMF staff report on 2017 Article IV Consultation with Nigeria.
That naira overvaluation is “somewhere to the tune of 10 to 20 per cent,” Gene Leon, IMF mission chief for Nigeria, said. The IMF in the staff report called for urgent macroeconomic reforms, removal of foreign exchange restrictions, and elimination of multiple exchange rates.
In summary,this is what the IMF said about Nigeria:
The slump in oil prices and production and an inadequate policy response are increasing unemployment and undermining efforts to reduce poverty.
The authorities took some steps in 2016 to reduce vulnerabilities, mainly by deregulating fuel prices, increasing the monetary policy rate, and allowing currency depreciation to reduce the exchange rate misalignment.
However, further actions are urgently needed to tackle the low revenue effort, large infrastructure deficit, rising debt service, double-digit inflation, and a foreign exchange market marred by restrictions.
These actions need to be supported by continued efforts to counter militant activity in the Niger Delta and an insurgency-related humanitarian crisis in the North East.