The International Monetary Fund (IMF) has acknowledged that the economic reforms implemented by the Bola Ahmed Tinubu administration have contributed to restoring stability in Nigeria and strengthening the naira.
Gita Gopinath, the IMF’s first deputy managing director, stated that key reforms, including the deregulation of the foreign exchange market, have played a significant role in improving the naira’s value.
During an interview with Arise TV, Gopinath remarked that the government has made “bold reforms, reforms that were much needed in terms of foreign exchange deregulation, fuel subsidy reforms.”
She emphasized the necessity of these measures despite their challenges, noting that they have provided stability to key macroeconomic indicators, particularly the naira.
However, Gopinath stressed the importance of clear communication with the public regarding the reforms, explaining their long-term benefits and how they will impact all sectors of the economy. She cautioned that without public understanding and support, patience for these difficult reforms might wear thin.
Discussing the effect of the naira’s value on the broader economy, Gopinath highlighted the role of confidence in the currency. She explained that stability is linked to strong economic fundamentals, including effective monetary policies aimed at reducing inflation. Additionally, she emphasized the need for sound fiscal policies to manage the national deficit.
She stated, “confidence in the currency is very important. Currency tends to be stable when it is backed by sound fundamentals, which means monetary policy is doing the right thing in trying to bring inflation down. Fiscal policies must also be on the right path in terms of managing the deficit.”
Gopinath also pointed out that increasing domestic revenue generation is a crucial priority for the Nigerian government. She noted that “government revenues as a share of GDP are about 10 per cent, which is very low compared to its peers.”
She recommended that boosting revenue would help restore market confidence. Furthermore, she highlighted the need for improvements in security, electricity supply, and the overall ease of doing business, stating that such measures would be “super helpful” in driving economic growth.
