IMF’s 3.2% Growth Projection For Nigeria Confirms Our Economic Policies Working–Emefiele

WASHINGTON D.C: This year’s 3.2 per cent growth projections for Nigeria by the International Monetary Fund is a confirmation that the economic policies being implemented by the Central Bank of Nigeria is yielding result.

The CBN Governor, Mr. Godwin Emefiele, said this during an interview with journalists at the headquarters of the International Monetary Fund where the World Bank/IMF spring meetings is currently holding.

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The meeting is being attended by Central Bank Governors and Ministers of Finance from all the countries that make up the membership of the World Bank and the IMF.

The IMF had explained that global growth would slow down to 2.8 percent in 2023 and remain weak, at around 3 percent, over the next five years.

But for Nigeria, the IMF maintained its economic growth projection of 3.2 percent in 2023, amidst global economic challenges.

Speaking on the development, the CBN Governor said the focus of monetary policy would be to bring down inflation while ensuring the stability of the banking sector.

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He said while the growth rate projection for Nigeria is still sub-optimal, it is gladdening because it is a confirmation that the right steps are being taken to grow the Nigerian economy in the midst of the global economic uncertainties.

He said, “I think I must say that we are delighted that even in Sub-Saharan Africa, the growth levels in Nigeria even though by our assessment is still sub-optimal, that the IMF would of all the countries say that growth in Nigeria should be retained at 3.2 per cent glades our heart.

“It means that we are doing certain things that are correct, and we will continue to do those things that are right. It should also mean that we are not going to remove our eyes on monetary policy which is to focus extensively on how to moderate inflation but at the same time ensure that banking system stability remains resilient and strong as it is right now.”

Emefiele said while poverty level has risen quite astronomically where over 700 million people are been struck by poverty, food insecurity has also risen quite tremendously to the extent that 350 million people globally are hit by extreme food crisis all over the world.

In the midst of this, he assured that the Central Bank of Nigeria will continue to provide the regulatory framework that will complement the fiscal policy measures needed to grow the economy in an inclusive and sustainable manner.

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He said, “We all know that global economies are still facing a lot of challenges. Both in the statutory meetings and some of the private meetings, issues bothering on the global challenges have always been highlighted.

“You all know that post-Covid, the global economy was beginning to recover quite aggressively, and interest rates were very low for a certain period of time.

“Inflation, particularly in Europe and developed economies have also been low but unfortunately, as a result of the challenges that came up in 2022, Russia/Ukraine, high interest rate and inflation in the US and the need to raise interest rates and its impact on other economies, we have gotten to where we are today.

“The forecast at the meeting remains that yes, a lot of work has been done. In 2022, growth is gradually returning again, but it is still at sub-optimal level.

“Inflationary pressures continue, although inflation is coming down as a result of measures taken by monetary authorities to bring down inflation rate but it still remains at very high levels globally to the extent that even global inflation projected at seven per cent remains very high.

“The high point of all the consequences of what we have seen in 2022 is that poverty level has risen quite astronomically. Over 700 million people are being struck by poverty; food insecurity has also risen quite tremendously to the extent that 350 million people globally are hit by extreme food crisis all over the world.”

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The apex bank boss explained further that while the IMF admitted to the fact that debt portfolios had risen four times high which is the highest in the last two decades, there is need for government to raise revenues and avoid an environment that is constrained and where there are no debts.

He added that tight and limited financial market conditions, and higher interest rates which had created a lot of burden for economies had made it more imperative for government to be creative generating more revenues.

He added, “Even the IMF themselves also talked about the fact that even the debt portfolio has risen four times high. In two decades, this is the highest level of debt portfolio that the IMF has seen in its books and they are unfortunately warning that they may not be in the position to do much for countries that really require more debts to be able to restructure their balance sheet and keep going on.

“The focus remains that the monetary policy authorities must continue to focus on inflation so as to try to bring it down.

“But while monetary authorities are doing their work to bring down inflation, they must also keep their eyes on banking system stability through monitoring and supervising regulatory framework.

“For the fiscal of course, because of the limited fiscal space, the IMF insists that countries need to reduce their spending. In my case, I say well, if you want to spend, then raise revenue to be able to spend.

“But I think it is important that you must raise revenue and not get yourself constrained in an environment where there is no debt, where financial market conditions are very tight and very limited, where interest rates are high and will create a lot of burden for economies.

“The only option for the fiscal in this case is to expand the revenue base so as to be able to spend.”

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