The executive board of the International Monetary Fund (IMF) recently concluded Article IV Consultation with Nigeria, noting that its economy is facing significant challenges.
Oil accounts for just 10 percent of Nigeria’s gross domestic product, but it plays a central role in the economy. Lower oil prices have therefore affected government revenues as exports dropped roughly 40 percent in 2015. Inflation in the country has also increased, up from 7.9 percent in December 2014 to 9.6 percent this past January.
Economic recovery should be modest over the next few years, but with no downside risks. Growth will stay at a lower rate in 2016 before picking up to 3.5 percent in 2017. The board expects this to occur based on new government policies and improvement in trade.
The directors of the board emphasized the need for Nigeria to raise non-oil revenues, strengthen its regulatory and supervisory frameworks, and provide structural reforms to enhance competitiveness and support investment.