…says falling oil prices exerting more pressure

To cushion the impact of global headwinds and unlock long-term inclusive growth, Nigeria and other African countries should deepen their fiscal buffers, adopt context-specific monetary policies, and advance regional economic cooperation, the International Monetary Fund (IMF) has advised. Managing Director of the IMF, Kristalina Georgieva, disclosed this yesterday during the launch of the IMF’s latest Global Policy Agenda Report titled: “Anchoring Stability and Promoting Balanced Growth”.

Noting that direct impact of trade tariffs on most African countries is minimal, she warned that the indirect consequences particularly from a slowdown in global growth, posed more serious challenges, especially for oil-exporting nations like Nigeria.

“The direct impact of tariffs on most of Africa, not on all of Africa, but on most of Africa, is relatively small, but the indirect impact is quite significant,“ Georgieva added. According to her, “slowing global growth means that all other things equal, they would see a downgrade.

And actually, we have downgraded the growth prospects for the continent, for oil producers like Nigeria, falling oil prices create additional pressure on their budgets. On the other hand, for the oil importers, this is a breath of fresh air.” Highlighting Africa’s continent’s mixed growth outlook, Georgieva stressed the need for a renewed commitment to structural reforms.

She pointed out that while Africa remains home to some of the world’s fastest-growing economies, a significant number of low-income and fragile states were increasingly falling behind, especially in the wake of slowing global growth and rising geopolitical risks.

“Well, we have seen over the last years, the African continent having some of the fastest growing economies, but we also have seen lowincome countries primarily and among the fragile conflict affected countries falling further behind, and now this, this is a shock for the continent,” she explained. In other words, she said different countries faced different challenges.

She said: “If I were to come with some basic recommendations that apply to Africa, I would say, and actually, they apply to Nigeria, they apply to Egypt, they apply to Ghana, they apply to Cote de Ivorie. First, continue on the path of strengthening your buffer levels.

There is still a lot that can be done on the fiscal side, to have strength and to have the buffers for a moment of shock, and don’t use any excuses around.”

Consequently, she called on governments to do more in expanding their tax base and tackle leakages through digital tools. On fiscal reforms, she said: “ Don’t hide behind excuses, and say we can’t really go for more tax because, yes, you can.

There is a lot that can be done to broaden the tax base, and a lot that can be done to reduce tax evasion and tax avoidance, using technology, as some countries are doing, to chase the tax dollars when, when there is the foundation for that is a very good thing to do.”