BY NKECHI NAECHE-ESEZOBOR(WASHINGTON DC)—The International Monetary Fund (IMF)on Tuesday, said that the recent depreciation of the naira does not pose a threat to Nigeria’s economy, noting that it could help in restoring economic equilibrium.
Speaking on Tuesday during a press conference on the Global Financial Stability Report held in Washington, D.C., the IMF commended Nigeria for recent policy reforms aimed at strengthening its monetary framework.
The Fund, however, recommended that the country continue to move toward a more flexible exchange rate system to enhance resilience and stability.
The IMF also applauded Nigeria for improvements in revenue collection, transparency in foreign exchange and reserves management, as well as a reduction in inflation—which has reportedly dropped from over 30 percent to 23 percent.
Despite noting progress across Sub-Saharan Africa, the IMF warned that the region still faces economic headwinds.
“Financial conditions are favorable, and capital flows are resuming, but there is a risk of previous cycles repeating,” the Fund stated.
It further cautioned that economies with existing vulnerabilities could come under pressure if foreign investments retreat, urging African countries to continue strengthening fiscal and monetary policies to sustain growth and stability.
