IMF Rating: Expert Urges FG To Remain Focused

A financial expert, Prof. Uche Uwaleke, has urged the Federal Government to focus on efforts to get the economy out of recession and provide conducive environment for job creation.
Uwaleke made the call in an interview with newsmen yesterday in Abuja at the backdrop of International Monetary Fund (IMF) latest rating of Nigeria as largest economy in Africa.
The new rating, which restored Nigeria’s prime position, lost to South Africa in August, placed the country ahead of South Africa and Egypt as Africa’s second and third big economies, respectively.
But the IMF’s World Economic Outlook for October puts Nigeria’s GDP at 415.08 billion dollars, from 493.83 billion dollars in 2015, while South Africa’s GDP was put at 280.36 billion dollars, from 314.73 billion dollars in 2015.
Uwaleke advised that the government should not fantasise on the IMF rating and lose focus of its duty to the nation’s economy.
He said, “the government is advised not to make a big issue out of the IMF’s rating of the economy.
“It must rather remain focused in its efforts geared towards getting the economy out of the present recession and engendering environment conducive for job creation.
“Nigeria has once again assumed the status of the biggest economy in Africa and this should ordinarily be something to cheer about.
“However, in view of the plummeting value of the naira and the contraction in national output, especially for the first two quarters, one is left to wonder whether the IMF estimate is realistic.’’
Uwaleke recalled that the removal of the currency peg in June, 2016 and adoption of a new foreign exchange policy by the Central Bank of Nigeria (CBN), caused a resultant depreciation of the naira.
He said that the depreciation of the naira significantly reduced the country’s GDP size in dollar terms such that Nigeria’s economy dropped to second place behind South Africa.
He added that not long after, the National Bureau of Statistics reported a negative growth in GDP of 2.06 per cent for the second quarter of 2016.
Uwaleke said the reality in the country had not changed since then as the naira had continued to depreciate in the foreign exchange market.
“The same IMF projects a negative year-end GDP growth rate for Nigeria. Therefore, it is not yet time to roll out the drums.
“The about 415 billion dollars GDP estimate by the IMF is difficult to reconcile with the country’s poor macro economic performance in the last few months occasioned by the drastic fall in oil revenue.
“So the government should ensure to play its role to the nation.