Business
IMF Predicts Global Economic Recovery
International Monetary Fund Managing Director Dominique Strauss-Kaho has said that the global economy has made remarkable progress and now stands at the cusp of recovery. However, he warned that it still remains highly vulnerable to shocks and policy missteps. In a speech delivered at the Annual Conference of the Confederation of British Industries (CBI) in London, Mr Strauss-Kaho said policy makers stand at a critical juncture where the sustainability of the global recovery will depend on the decisions they make in the months to come.
“Today the storm has passed. T he worst has been averted. And yet the economy remains very much in holding pattern-stable, and getting better, but still highly vulnerable”, Mr Strauss-Kaho said. For policymakers “the challenges are great” during the crisis, everyone was united by a common purpose. Going forward, this might dissolve. So the road ahead will be less clear cut. We will need some debt maneuvering, and perhaps some out-of-the-box thinking. We will certainly need continued collabora tion”, he added.
Mr Strauss-Kaho said policy makers will face four main challenges, which include existing from accommodative policies, adapting to increasing capital flow to emerging market, developing a new global grown modes, and designing and implementing financial sector reforms.
On exit strategies, Mr Strauss-Kaho stressed the importance of waiting for a sustained recovery in private demand, as well as clear indications of financial stability before accommodative measures are withdrawn. “It is too early for a general exit. We recommend erring on the side of caution, as exiting too late”, he said. Plans for fiscal consolidation should be the top priority, especially in advanced economies. And monetary policy can afford to stay accommodative for some time, given little sign of inflation on the horizone.
A related challenge to exit strategies is managing capital flows to emerging markets. “In many countries appreciation should be the key policy response other tools include lower interest rates, reserves accumulation, tighter fiscal policy, and financial sector prudential measures. Capital controls can be part of the package of measures”, he said in his speech. “But we should recognize that all tools have their limitations.
we should be pragmatic”, he added.
Moving to the challenge of creating a new global growth model, Mr Strauss-Kaho said the old paradigm of growth generation based on household in the US was dead. “If we are to have sustained global growth, somebody else needs to step into the breach. The leading candidates are the surplus countries. And we can see some shifts in the right direction. China and other emerging Asian economies are shifting from exports to domestic demand. But they have some way to go.
Mr Strauss-Kaho underscored the importance of forging ahead with a number of reforms to make the financial sector a more stable place. He stressed the challenge posed to policy makers by increased risk taking in the financial sector while financial institutions are still in poor shape while regulators seek to impose tough new standards that may jeopardize recovery.
“How do we square the circle? One possible answer is to reduce regulatory uncertainty. It is throwing up some perverse incentive and might be encouraging a risk taking culture”, he said. Also on addressing risk management in the financial sector, he added t hat it was essential to break the link between risky behaviour and compensation. “In this cont- ext we have been asked by the G-20 to look into financial sector taxes. There are a number of ways to think about this and we will look at it from various angles and consider all proposals he said.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.