• IMF says Foreign exchange restrictions in Nigeria is distorting public and private sector decisions and holding back investment 
  • The Bretton Woods Institution calls for structural reforms to increase per capita growth.
  • The country has an official naira rate pegged at N307, I&E – Investors’ & Exporters (N362.32), Bureau De Change (N360 ), and black market FX (N360), per dollar.

The International Monetary Fund (IMF) has advised the Nigerian government to unify its exchange rates to achieve desired economic growth.

Oya Celasun, IMF’s Divisional Chief, Research Department, stated this on Tuesday, October 15th, during a press conference on the sidelines of the ongoing World Economic Outlook at the World Bank/IMF Annual Meetings in Washington D.C.

Celasun said the slight upward revision of economic growth for Nigeria this year came mostly from strong agricultural production, but still not high enough to lift per capita growth.

Acting President Yemi Osinbajo, SAN, left with Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, International Monetary Fund (IMF) during a strategic meeting at the Statehouse, Abuja, 2017.
Acting President Yemi Osinbajo, SAN, left with Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, International Monetary Fund (IMF) during a strategic meeting at the Statehouse, Abuja, 2017.

When asked about the comprehensive package of measures suggested after the outcome of the IMF team's visit to Nigeria led by Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, Ms. Celasun said IMF referred to a stronger non-oil revenue mobilisation.

For some time now, we have been emphasising the need for a comprehensive package to lift growth.

“One element of that will have to be stronger non-oil revenue mobilisation. Nigeria has one of the lowest rates of revenue in the world, which was hit hard by the drop in oil prices.

“That is essential for the country to be able to spend more on priorities, such as social safety net and infrastructure. Other areas are the need for tight monetary policy and a simpler unified exchange rate system. Foreign exchange restrictions have also been distorting public and private sector decisions and holding back investment.

The Bretton Woods institution said because the Nigerian economy largely depends on oil prices and oil prospects, there is a need for structural reforms to increase per capita growth.

Nigeria's multiple forex rates

Despite calls by the international community, experts, and analysts, Nigeria continues to run different exchange rates.

A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. REUTERS/Akintunde Akinleye/File Photo
A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016. REUTERS/Akintunde Akinleye/File Photo
Reuters/Akintunde Akinleye

Currently, the country has official naira rate pegged at N307, I&E window, Bureau De Change, and black market rates. With various market interventions, Nigeria keeps defending the naira at the forex market.

Godwin Emefiele, CBN governor, said the multiple FX policy is backed by the CBN Act and favours the poor.