Why IMF Is Asking Nigeria To Devaluate Its Naira

International Monetary FundInternational Monetary Fund (IMF) has asked Nigeria as the Africa’s biggest oil producer and economy to devaluate its naira over the uncertainty trailing its political landscape and economy.

Yahoo News reports that IMF and some economic experts are displeased that President Muhammadu Buhari’s long-awaited cabinet list has no economic stars to guide the much-needed reform.

Garba Kurfi, managing director of APT Securities and Funds said there is no economist on the cabinet list that can suggest to the government ways to improve revenue generation and how to run the economy.

In the last few years, the naira has lost 25 percent of its value. The stock market plummeted by 20 percee and halved prices for oil that provides most government revenue.

In November, Nigeria’s Central Bank devalued the naira by 8 percent. CBN pegged official exchange rate at an even lower 198 to the dollar, though it sells at 222 at exchange bureaus.

To defend the naira, the CBN also restricted access to foreign currency banning a long list of imports.

Huhuonline, a Nigerian news website was quoted to have described the move as ‘digging a hole to fill up another hole’.

Antoinette Sayeh, the International Monetary Fund’s Africa director sees the restrictions as quite detrimental

At the IMF annual meeting held in Peru this week, Sayeh remarked adopting the policy has made it harder for the average person to buy milk.

She however, called for a review of the restrictions and for officials to permit the exchange rate to continue to adjust.



Credit: Yahoo News

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