IMF Urges Fed Govt to Tackle High Inflation

IMF Urges Fed Govt to Tackle High Inflation

… As FirstBank Expresses Optimism on Economy.

The International Monetary Fund IMF has urged the Federal Government of Nigeria to implement a stronger operational framework and ensure price stability in order to combat the nation’s high inflation.

The IMF Resident Representative for Nigeria, Mr. Ari Aisen, made this call in Lagos while giving a keynote address at the the Financial Markets Dealers Association (FMDA) quarterly forum themed “Nigeria Macroeconomic Developments and Outlook: IMF View.”

The forum which was hosted by FirstBank of Nigeria Limited had Treasurers, Analysts and other market players from insurance, banks, pension funds, government and regulatory bodies in Nigeria as participants.

Aisen revealed that there is “high inflation all over the world and interest rates in the major economies have risen significantly.” There’s need for vital measures to control the rise and impact in developing economies.

The IMF representative added that to safeguard financial stability, there’s
need for regulatory vigilance, timely actions against undercapitalized banks, and introduction of additional macro-prudential instrument.

Aisen emphasized the need for Nigeria to permanently remove the controversial fuel subsidy in line with the Petroleum Industry Act, and encouraged government to sustain social spending to cushion the effects on the most vulnerable people.

He also highlighted key efforts needed to reduce corruption vulnerabilities, including improving government efficiencies, civil service reforms and ensuring accountability and transparency on COVID spending.

Aisen noted that while improved transparency and governance will boost business trust and confidence in reforms, bold trade and agric reforms can ensure a job-rich inclusive economic recovery.

He believes that with the planned commencement of operations of Dangote Refinery in 2023, the effective implementation of the Finance Act 2021, and the Strategic Revenue Growth Initiative, there would be positive growth in the economy.

Aisen advised the CBN to establish a unified and market-clearing exchange rate to strengthen the country’s external position, saying, “There should be complementary macroeconomic and structural policies to preserve competitiveness gains from any exchange rate adjustment.”

While speaking at the forum, FirstBank Chief Risk Officer, Segun Alebiosu expressed optimism on Nigeria’s economic recovery.

Alebiosu stated that, “We are optimistic that the economy will grow generally. Nigerians are resilient, hardworking, smart and always coming up with innovations. You will see new things springing up soon.

“Expect for example the Lagos rail to begin. First Bank is part of that. Lekki Port will come up in 2023. We also expect Dangote Refineries to start operation soon; First Bank is part of that too. We remain optimistic. So you can see how First Bank is woven into virtually everything.”

He added, “FirstBank has been here since 1894 and have been supporting government and the nation even during difficult periods we have been here.