Nigeria’s Economy Still In Bad Shape - IMF
So, an International Monetary Fund (IMF) team led by Amine Mati visited Nigeria from July 20-31, 2017.
They were here to discuss Nigeria’s recent economic and financial developments and review some of the economic policies being implemented by the government.
However, at the end of their visit, they left behind bad news for the Nigerian economy.
They could not even disguise the fact that the economy is still struggling and may continue to struggle in the foreseeable future.
In a statement by IMF following the end of the staff team’s visit, IMF said Nigeria’s “economic backdrop remains challenging, despite some signs of relief in the first half of 2017”.
Although the statement pointed into some interesting and positive signals such as growth of the non-oil sector by 0.6% - driven by manufacturing and agriculture - and decreasing inflation.
But it is clear that Nigeria’s economy was still in very bad shape.
“Preliminary data for the first half of the year indicate significant revenue shortfalls, with the interest-payments to revenue ratio remaining high (at 40 percent at end-June) and projected to increase further under current policies.
“High domestic bond yields and tight liquidity continue to crowd out private sector credit - (bad implications of too much government borrowings).
“Given Nigeria’s low growth environment and the banking system’s exposure to the oil and gas sector, non-performing loans increased from 6% in 2015 to 15% in March 2017 (8% after excluding the four undercapitalized banks),” the IMF said.
“However, near-term vulnerabilities and risks to economic recovery and macroeconomic and financial stability remain elevated,” IMF started in its verdict on Nigeria’s economy.
“At 0.8 percent, growth in 2017 will not be sufficient to make a dent in reducing unemployment and poverty,” the statement added.
In simple terms, there may be growth but it will so insignificant that no one will notice.
The IMF has spoken... that's all