Ethiopia, Kenya, Senegal topple Nigeria on IMF growth index
The International Monetary Fund (IMF) has said that Nigeria’s economic crisis has festered because of Federal Government’s slow policy response which has hindered investments and stifled new sources of growth.
The Fund in its October 2016 Regional Economic Outlook for sub-Saharan Africa, noted that this has caused the country to lose more grounds on the economic growth index for Sub-Saharan Africa, as four African countries, among emerging economies, have developed quicker positive growth index for the next 10 years than Nigeria.
The four economies are Côte d’Ivoire, Ethiopia, Kenya and Senegal, though they are said to have fallen in the prime category of emerging economies. Nigeria, which has been describes as a country with more viable resources, fell within the second category, along with Morocco and Mauritius.
In preferring solutions to the Nigerian situation, IMF said that government has to create room for more private sector participation. “For Nigeria to come off easily from its present economic challenges, it has to seek a better way of restructuring its economy by allowing more private sectors’ participation through concessioning of public assets currently draining its economy.”
On the projected economic growth in the sub-Saharan Africa, the Fund said 2016 would slow to its lowest level in more than 20 years, while an average growth is to be only 1.4 per cent, which is below its high population growth rate.
According to the IMF, Director, African Department, Abebe Aemro Selassie, Nigeria can only survive the recession, if it employs more financing discipline, adding that, poor policy response in Nigeria may have affected many of the countries in the region.
“The policy response in many of the hardest hit countries has been slow and piecemeal, often accompanied by stopgap measures such as central bank financing and the accumulation of arrears leading to rapidly rising public debt.
“As a result, the delayed adjustment and ensuing policy uncertainty have been deterring investment and stifling new sources of growth, making a return to strong growth rates more difficult.”
“This implies fully allowing the exchange rate to absorb external pressures for countries outside monetary unions, re-establishing macroeconomic stability, by tightening monetary policy where needed to tackle sharp increases in inflation.”
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