The International Monetary Fund (IMF) says its growth forecast for 2020 for Nigeria was revised down to two (2) percent to ‘reflect the impact of lower international oil prices.’
It also says that ‘Inflation is expected to pick up, while deteriorating terms of trade and capital outflows will weaken the country’s external position.’
A team from the IMF led by Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, visited Lagos and Abuja from January 29-February 12, 2020.
At the end of the visit, Mati issued the following statement:
“The pace of economic recovery remains slow, as declining real incomes and weak investment continue to weigh on economic activity. Inflation—driven by higher food prices—has risen, marking the end of the disinflationary trend seen in 2019. External vulnerabilities are increasing, reflecting a higher current account deficit and declining reserves that remain highly vulnerable to capital flow reversals. The exchange rate has remained stable, helped by steady sales of foreign exchange in various windows.
“High fiscal deficits are complicating monetary policy. Weak non-oil revenue mobilization led to further deterioration of the fiscal deficit, which was mostly financed by Central Bank of Nigeria (CBN) overdrafts. The interest payments to revenue ratio remains high at about 60 percent.”
