The International Monetary Fund, IMF, has advised the Central bank of Nigeria (CBN) to keep monetary policy tight for some times to sustain growth.
The fund made the recommendation at the briefing on the world economic outlook at the springs meeting of the World bank and the IMF in Washington DC, today.
Gita Gopinath, Chief Economist and the Director of Research at the IMF, who spoke on the sideline of the brief, said: “Fiscal policy needs to tighten further for which mobilising more non oil revenue is very important. For monetary policy, it’s to stay tight for some more time. It has to be well communicated and transparent.
“There has been some convergence on the exchange rate front, there is also much more that needs to be done there and the structural reforms, all of these has to be put in a context of reforms that help boost private sector performance.”
Speaking on the impact of the global trade tensions on the growth projections for Nigeria, Gopinath said Brexit and softening oil prices are the main risks.
She said: “For Nigeria, what’s very important is the oil price so to the extent that other global risks transmit into a weaker oil price or there are other developments that are oil market specific that would be a factor weighing on Nigeria.
“We expect a growth recovery, growth was reasonably strong last year and we think that things will improve a bit going forward. We cut our forecasts for 2019 precisely because oil prices are going to be a bit weaker than we expected last time we did the forecast.”
She said it was time to be cautious because there was much of adjustments that needed to be done.
Gopinath further explained that the funds baseline focus was that global growth should return in 2020.