ABUJA, (Sundiata Post) – The International Monetary Fund (IMF) has expressed satisfaction with the Nigerian Government’s use of fiscal policies in general and tax policy in particular as part of the strategy for development. The world body asserted that the line of thinking was precisely how fiscal policy should be thought in developing countries as part of their development strategy.
Speaking at a press briefing as part of the on going Spring Meetings of the IMF and World Bank, the director, Fiscal Affairs Department, Mr Vitor Gaspar said that he was in Nigeria recently and was happy that the government is adopting that strategy as a development model.
Also speaking along that line, the Senior Economist IMF,Africa Department, Ms Catherine Patillo said that the Fund welcomed the Buhari administration’s Economic Recovery and Growth Plan (ERGP).
She expressed her excitement with the focus on diversification. “The policy focuses on diversification and in addressing some of the deep-rooted problems related to strengthening structures, which is neccesary for diversification and in building revenues, particularly oil revenue. So, we very much welcome the ERGP”.
Patillo further said that “As you are aware Nigeria, went into recession last year, there have been forecasted recovery, but still very fragile this year and the need to address the fiscal situation is urgent. Our recommendation is for the continued fiscal consolidation. One striking statistics I think is the fact that over the past years, the ratio of interest payment to tax revenue has doubled to 66 per cent in Nigeria. So, two-thirds of all tax revenue is going into interest payment, illustrating the need to raise tax revenue. That would allow the government to implement the social and growth-friendly policies that are part of the objectives of the ERGP.”
Refering to an earlier interface with the Nigerian government, she stressed that “the types of strong fiscal institutions we have talked about are important for government continuing to ensure that funds flow back to their countries”.
In a related development, the World Bank said that economic growth in sub-Saharan Africa was rebounding in 2017 after registering the worst decline in more than two decades in 2016.
In a bi-annual analysis of the state of African economies, the bank said that the region was showing signs of recovery just as regional growth is projected to reach 2.6 per cent this year.
The World Bank was particularly happy that Nigeria, South Africa and Angola, the continent’s largest economies were “seeing a rebound from the sharp slow down in 2016, but the recovery has been slow due to insufficient adjustment to low commodity prices and policy uncertainty.”