The International Monetary Fund (IMF) has expressed regret over “certain slippages” in the implementation of some aspects of Nigeria’s reform programme.
A statement released here Wednesday August 1st by John Lipsky, First Deputy Managing Director of the Fund, on the completion of the third review of Nigeria’s Policy Support Instrument (PSI), said the Fund was not happy over some slippages in the implementation of last measures of the reform programme.
“While significant progress was achieved in structural reforms over the course of the PSI, the delays in completing the final steps of several measures are regrettable,” he said.
Lipsky therefore advised Nigeria to maintain momentum of its reforms to safeguard economic gains achieved in recent times.
He described recent performances under Nigeria’s reform as “uneven”, especially the fiscal expansion in late 2006 which led to an “unanticipated liquidity injection”.
“Fiscal policy should remain consistent with macroeconomic stability, and reaffirming the political agreement on the use of oil revenues among all levels of government will be important in this regard.
“It will be crucial to continue recent efforts to develop guidelines on the effective use of oil savings, ensure good quality of capital spending, and take forward structural reforms including trade liberalisation.” the IMF official said.
The Fund said that the 2007 programme adequately addressed observed slippages in policy implementation by re-confirming the 2007 fiscal targets set at the second review, and maintaining a monetary programme that targets single-digit inflation by partly reversing the broad money acceleration.
“The inflation objective should be supported by the overall fiscal contraction and a more flexible exchange rate policy going forward. Ensuring good quality of monetary data will be essential.
“Maintaining the reform momentum and safeguarding economic gains of recent years will be necessary to realise Nigeria’s growth potential, which is important for Nigeria’s fight against poverty,” it said, adding that fiscal policy should remain consistent with macroeconomic stability.