Devalue Naira, IMF Urges Nigeria

1000 Naira Note

The IMF is pressing Nigeria to further devalue its currency amid uncertainty over the political and economic outlook for Africa’s biggest oil producer and economy a news agency has reported.

The report quoted Antoinette Sayeh, the International Monetary Fund’s Africa Director who had alleged that restrictions placed on 41 items access to foreign exchange was “quite detrimental saying that in Nigerians they “are already making it harder for the average person to buy milk,” at the IMF annual meeting that ended in Peru two weeks ago.
But Mrs Antoinette Sayeh openly avoided Nigeria reporters who asked her to name one country in the world that export crude and import refined products. She was also not forth coming when asked to name one country that would import anything that could be produced locally. Her assertion that it was becoming difficult for Nigerians to buy milk in the open market did not go down well with those who are familiar with the Nigerian situation at the Africa region press briefing. She called for a review of the restrictions and for officials to “permit the exchange rate to continue to adjust.”

Nigeria’s Central Bank devalued the naira by 8 per cent in November and then fixed the official exchange rate at N198 to the dollar, though it sells at N222 at exchange bureaus. The Central Bank has defended the naira by restricting access to foreign currency for 41 items that could be produced locally.

The International Monetary Fund IMF at the same annual meeting said that Exchange-rate devaluation which countries normally use during financial crisis could cause adverse effect on countries economy. In its World Economic Outlook released in Lima, Peru, it said: “Exchange-rate depreciation has generally been a useful buffer for countries experiencing growth slowdowns – and has already been substantial – but could cause adverse balance-sheet effects where there is foreign-currency borrowing”.

In his opening remark at the World Economic Outlook Press Conference Mr. Maurice Obstfeld IMF chief economist said “No single set of policy prescriptions is suitable for every country seeking to improve growth performance or build resilience.”

Source: Vanguard