{
  "title": "Press Release: IMF Executive Board Concludes 2016 Article IV Consultation with Nigeria",
  "publication": "IMF News, March 31, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16146",
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  "summary": "On March, 30, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.",
  "publishDate": "2016-03-31",
  "sections": [
    {
      "heading": "Overview",
      "content": "- On March, 30, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.\n- The Nigerian economy faces substantial challenges driven by lower oil prices, which significantly affected fiscal and external accounts and slowed growth."
    },
    {
      "heading": "Economic developments and outlook",
      "content": "- Non-oil sector accounts for 90 percent of GDP, while the oil sector remains central to the economy.\n- Growth and inflation:\n  - Real GDP growth slowed from 6.3 percent in 2014 to an estimated 2.7 percent in 2015.\n  - Growth in 2016 is expected to decline to 2.3 percent, with non-oil sector growth projected to slow from 3.6 percent in 2015 to 3.1 percent in 2016 before recovering to 3.5 percent in 2017.\n  - Inflation increased to 9.6 percent in January (up from 7.9 percent in December, 2014), above the CBN’s medium-term target range of 6–9 percent.\n- Resilience and social impact:\n  - Slower growth weakened corporate balance sheets, lowered banking system resilience, and likely reversed progress in reducing unemployment and poverty.\n- Recovery prospects and downside risks:\n  - Recovery likely modest over the medium term, with significant downside risks including lower oil prices, shortfalls in non-oil revenues, deterioration in state and local government finances, constraints on access to foreign exchange disrupting private sector activity, and resurgence in security concerns."
    },
    {
      "heading": "Fiscal and external accounts",
      "content": "- Fiscal:\n  - Government revenues fell to just 7.8 percent of GDP in 2015, with the general government deficit doubling to about 3.7 percent of GDP in 2015.\n  - The general government deficit is projected to widen somewhat in 2016 before improving in 2017.\n  - Directors emphasized the critical need to raise non-oil revenues to ensure fiscal sustainability while maintaining infrastructure and social spending.\n- External:\n  - Exports dropped about 40 percent in 2015, pushing the current account from a surplus of 0.2 percent of GDP to a deficit projected at 2.4 percent of GDP.\n  - With foreign portfolio inflows slowing, reserves fell to $28.3 billion at end-2015.\n  - The external current account deficit is likely to worsen further in 2016."
    },
    {
      "heading": "Monetary policy and exchange rate",
      "content": "- Policy stance and impacts:\n  - Exchange restrictions introduced by the Central Bank of Nigeria (CBN) to protect reserves have significantly impacted private sector segments dependent on foreign currencies.\n  - The combination of expansionary monetary policy, a relatively fixed exchange rate, and exchange restrictions adversely impacted economic activity and raised concerns about the authorities’ commitment to the inflation objective.\n- Recommendations:\n  - Directors underscored the need for credible adjustment to the large terms-of-trade shock, including greater exchange rate flexibility and speedy unwinding of exchange restrictions to facilitate an exchange rate consistent with fundamentals.\n  - They welcomed recent monetary policy tightening and recommended that the central bank target price stability to maintain inflation within the target range."
    },
    {
      "heading": "Financial sector soundness",
      "content": "- Current situation:\n  - Declining asset quality is a concern as growth slows, though financial sector soundness indicators remain favorable.\n- Recommendations:\n  - Further strengthening of regulatory and supervisory frameworks, intensified monitoring of banks, and enhanced contingency planning and resolution frameworks were recommended.\n  - Lowering interest rate spreads and increasing efficiency could enhance credit growth, especially for small and medium enterprises."
    },
    {
      "heading": "Structural reforms and governance",
      "content": "- Policy priorities urged by Directors:\n  - Raise non-oil revenues through a gradual increase in the VAT rate, further improvements in revenue administration, and broadening of the tax base.\n  - Implement budget preparation and execution reforms to allow orderly sub-national budget adjustment.\n  - Strengthen public financial management and service delivery.\n  - Implement an independent price-setting mechanism to address petroleum subsidies while strengthening the social safety net.\n  - Continue core infrastructure investment, reduce the cost of doing business through greater transparency and accountability, and promote employment of youth and women.\n  - Adopt legislation to spur investment in the oil and gas sector and promote governance policies, including targeted AML/CFT measures.\n  - Foster transparency and enhanced accountability."
    },
    {
      "heading": "Data and statistical efforts",
      "content": "- Directors welcomed progress in improving quality and availability of economic statistics.\n- Authorities committed to implement the e-GDDS, including a National Summary Data Page, and encouraged efforts to improve balance of payments data and compilation of sub-national fiscal accounts."
    },
    {
      "heading": "Key statistics and projections (2014–2017)",
      "content": "- Real GDP (at 2010 Basic Prices): 6.3 (2014); 2.7 (2015 Prel.); 2.3 (2016 Projections); 3.5 (2017)\n- Oil and Gas GDP: -1.3 (2014); -5.4 (2015); -4.8 (2016); 3.0 (2017)\n- Non-oil GDP: 7.3 (2014); 3.6 (2015); 3.1 (2016); (2017) 3.5\n- Production of crude oil (million barrels per day): 2.2 (2014); 2.1 (2015)\n- Consumer price index (end of period): 8.0 (2014); 9.6 (2015); 12.0 (2016); 12.5 (2017)\n- Total revenues and grants (Percent of GDP): 10.5 (2014); 7.8 (2015); 5.9 (2016); 6.8 (2017)\n- Of which: oil and gas revenue (Percent of GDP): 6.5 (2014); 3.7 (2015); 1.5 (2016); 1.9 (2017)\n- Total expenditure and net lending (Percent of GDP): 12.3 (2014); 11.5 (2015); 10.3 (2016); 10.9 (2017)\n- Overall balance (Percent of GDP): -1.8 (2014); -3.7 (2015); -4.4 (2016); -4.0 (2017)\n- Non-oil primary balance (percent of non-oil GDP): -8.2 (2014); -6.8 (2015); -5.3 (2016); -5.2 (2017)\n- Broad money (percentage change; end of period): 20.4 (2014); 14.2 (2015); 16.5 (2016)\n- Net foreign assets: -10.9 (2014); -7.4 (2015); -2.4 (2016)\n- Net domestic assets: 31.1 (2014); 12.7 (2015); 21.5 (2016); 18.9 (2017)\n- Exports of goods and services: -13.3 (2014); -40.7 (2015); -21.8 (2016); 22.6 (2017)\n- Imports of goods and services: -22.1 (2014); -3.0 (2015); 6.9 (2016)\n- Current account balance (percent of GDP): 0.2 (2014); -2.8 (2015)\n- Terms of trade: -2.7 (2014); -24.9 (2015); -16.9 (2016); 9.3 (2017)\n- Price of Nigerian oil (US$ per barrel): 100.6 (2014); 53.1 (2015); 36.1 (2016); 43.3 (2017)\n- Gross international reserves (US$ billions): 34.3 (2014); 28.3 (2015); 19.5 (2016)\n- Equivalent months of next year’s imports (reserves): 6.1 (2014); 5.2 (2015); 3.2 (2016)\n\nIMF Press Release No. 16/146 — March 31, 2016. Executive Board conclusions and staff projections as presented in the Article IV Consultation with Nigeria.\n\n---\n\n\n References\n\n- Nigeria and the IMF\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16146"
    }
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    "Published: March 31, 2016",
    "On March, 30, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Nigeria.",
    "The Nigerian economy faces substantial challenges driven by lower oil prices, which significantly affected fiscal and external accounts and slowed growth.",
    "Non-oil sector accounts for 90 percent of GDP, while the oil sector remains central to the economy.",
    "Growth and inflation:",
    "Resilience and social impact:",
    "Recovery prospects and downside risks:",
    "Fiscal:",
    "External:",
    "Policy stance and impacts:",
    "Recommendations:",
    "Current situation:",
    "Recommendations:",
    "Policy priorities urged by Directors:",
    "Directors welcomed progress in improving quality and availability of economic statistics.",
    "Authorities committed to implement the e-GDDS, including a National Summary Data Page, and encouraged efforts to improve balance of payments data and compilation of sub-national fiscal accounts.",
    "Real GDP (at 2010 Basic Prices): 6.3 (2014); 2.7 (2015 Prel.); 2.3 (2016 Projections); 3.5 (2017)",
    "Oil and Gas GDP: -1.3 (2014); -5.4 (2015); -4.8 (2016); 3.0 (2017)",
    "Non-oil GDP: 7.3 (2014); 3.6 (2015); 3.1 (2016); (2017) 3.5",
    "Production of crude oil (million barrels per day): 2.2 (2014); 2.1 (2015)",
    "Consumer price index (end of period): 8.0 (2014); 9.6 (2015); 12.0 (2016); 12.5 (2017)",
    "Total revenues and grants (Percent of GDP): 10.5 (2014); 7.8 (2015); 5.9 (2016); 6.8 (2017)",
    "Of which: oil and gas revenue (Percent of GDP): 6.5 (2014); 3.7 (2015); 1.5 (2016); 1.9 (2017)",
    "Total expenditure and net lending (Percent of GDP): 12.3 (2014); 11.5 (2015); 10.3 (2016); 10.9 (2017)",
    "Overall balance (Percent of GDP): -1.8 (2014); -3.7 (2015); -4.4 (2016); -4.0 (2017)",
    "Non-oil primary balance (percent of non-oil GDP): -8.2 (2014); -6.8 (2015); -5.3 (2016); -5.2 (2017)",
    "Broad money (percentage change; end of period): 20.4 (2014); 14.2 (2015); 16.5 (2016)",
    "Net foreign assets: -10.9 (2014); -7.4 (2015); -2.4 (2016)",
    "Net domestic assets: 31.1 (2014); 12.7 (2015); 21.5 (2016); 18.9 (2017)",
    "Exports of goods and services: -13.3 (2014); -40.7 (2015); -21.8 (2016); 22.6 (2017)",
    "Imports of goods and services: -22.1 (2014); -3.0 (2015); 6.9 (2016)",
    "Current account balance (percent of GDP): 0.2 (2014); -2.8 (2015)",
    "Terms of trade: -2.7 (2014); -24.9 (2015); -16.9 (2016); 9.3 (2017)",
    "Price of Nigerian oil (US$ per barrel): 100.6 (2014); 53.1 (2015); 36.1 (2016); 43.3 (2017)",
    "Gross international reserves (US$ billions): 34.3 (2014); 28.3 (2015); 19.5 (2016)",
    "Equivalent months of next year’s imports (reserves): 6.1 (2014); 5.2 (2015); 3.2 (2016)",
    "[Nigeria and the IMF](http://www.imf.org/external/country/NGA/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](https://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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