The International Monetary Fund (IMF) has said the reforms of the Bola Ahmed Tinubu government has restored economic stability in the country and further helped in the strengthening of the value of the naira.
According to the first deputy managing director of the IMF, Gita Gopinath, the government had embarked on the much needed reforms such as foreign exchange deregulation that has led to the strengthening of the naira.
Speaking on the Nigerian economy on Arise TV, Gopinath noted that the “government has undertaken bold reforms, reforms that were much needed in terms of foreign exchange deregulation, fuel subsidy reforms.
“Those were important and had to get done, and these are difficult decisions to make. So, there is recognition that these reforms have brought stability to macro indicators, like the strength of the naira” she stated.
Gopinath however noted that it is “very important to communicate to the public not just that reforms take time, but also to communicate what exactly is being done, how it’s going to help them, and not just help some parts of the economy. Because if you don’t bring people along, there won’t be patience for difficult reforms.”
On the impact of the value of the local currency on the economy, she said
“confidence in the currency is very important. Currency tends to be stable when it is backed by sound fundamentals, which means monetary policy is doing the right thing in trying to bring inflation down. Fiscal policies must also be on the right path in terms of managing the deficit.
“I think one of the big priorities for the Nigerian government is to do more domestic resource mobilisation. Government revenues as a share of GDP are about 10 per cent, which is very low compared to its peers.
“Doing more on that front will also give confidence to markets. All of that is critical moving on the path of growth in terms of improving security, power, and the ease of doing business. All of this is going to be super helpful.”
