{
  "title": "IMF Executive Board Concludes 2018 Article IV Consultation with Nigeria",
  "publication": "IMF News, March 7, 2018",
  "sourceUrl": "https://www.imf.org/en/news/articles/2018/03/07/pr1876-imf-executive-board-concludes-2018-article-iv-consultation-with-nigeria",
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  "summary": "Executive Directors agreed with the thrust of the staff appraisal.",
  "publishDate": "2018-03-07",
  "sections": [
    {
      "heading": "Executive Board assessment",
      "content": "- Executive Directors agreed with the thrust of the staff appraisal.\n- Welcomed Nigeria’s exit from recession and the strong recovery in foreign exchange reserves, helped by rising oil prices and new foreign exchange measures.\n- Commended progress implementing the Economic Recovery and Growth Plan, including:\n  - start of a convergence in foreign exchange windows,\n  - tight monetary policy,\n  - improvements in tax administration,\n  - significant strides in improving the business environment.\n- Noted remaining challenges: non‑oil, non‑agricultural sector has not picked up; inflation remains high and sticky; unemployment is rising; poverty is high.\n- Urged comprehensive and coherent policy actions as urgent."
    },
    {
      "heading": "Macroeconomic outlook and growth",
      "content": "- The Nigerian economy is exiting recession but remains vulnerable.\n- Economic growth reached 0.8 percent in 2017, driven mainly by recovering oil production.\n- Growth projections:\n  - 2018: 2.1 percent\n  - 2019: 1.9 percent\n- Improved oil prices expected to provide relief for external and fiscal accounts and support growth recovery.\n- Medium-term projections indicate growth would remain relatively flat and per capita real GDP would continue to decline under unchanged policies."
    },
    {
      "heading": "Inflation, monetary policy, and reserves",
      "content": "- Inflation developments:\n  - annual average CPI: 16.5 (2016), 14.0 (2017), 14.8 (2018 projection)\n  - CPI end of period: 18.5 (end-2016), 15.4 (end-2017), 14.5 (end-2018), 16.6 (end-2019)\n- Central Bank actions:\n  - Tight monetary policy contributed to better foreign exchange availability, increased reserves to a four-year high, and contained inflationary pressures.\n  - Directors commended the tightening bias in 2017 and recommended continuation until inflation is within the single digit target range.\n  - Recommended continued strengthening of the monetary policy framework and transparency; some Directors urged consideration of a higher monetary policy rate, a symmetric application of reserve requirements, and no direct central bank financing of the economy.\n- Gross international reserves (US$ billions):\n  - 27.0 (2016), 39.2 (2017), 36.6 (2018 projection)\n  - Equivalent months of imports of G&Ss: 6.7 (2016), 7.3 (2017), 6.2 (2018 projection)"
    },
    {
      "heading": "Fiscal position and public debt",
      "content": "- Fiscal balances and revenue:\n  - Total revenues and grants (percent of GDP): 5.6 (2016), 7.4 (2017), 7.1 (2018 projection)\n  - Of which: oil and gas revenue (percent of GDP): 2.5 (2016), 3.7 (2017), 3.3 (2018 projection)\n  - Total expenditure and net lending (percent of GDP): 11.2 (2016), 11.9 (2017), 11.6 (2018 projection)\n  - Overall balance (percent of GDP): -3.9 (2016), -5.5 (2017), -4.5 (2018 projection), -4.4 (2019 projection)\n  - Non-oil primary balance (percent of non-oil GDP): -5.1 (2016), -7.0 (2017), -7.6 (2018 projection), -6.7 (2019 projection)\n  - Non-oil revenue (percent of non-oil GDP): 3.6 (2016), 3.4 (2017), 3.9 (2018 projection), 4.0 (2019 projection)\n- Public debt metrics:\n  - Public gross debt (percent of GDP): 19.6 (2016), 22.3 (2017), 25.3 (2018 projection), 26.0 (2019 projection)\n  - FGN debt (percent of GDP): 16.7 (2016), 18.4 (2017), 20.8 (2018 projection), 20.7 (2019 projection)\n  - FGN interest payments (percent of FGN revenue): 61.7 (2016), 71.9 (2017), 59.7 (2018 projection), 68.0 (2019 projection)\n- Directors emphasized a growth‑friendly fiscal adjustment:\n  - Frontload non‑oil revenue mobilization and rationalize current expenditure to reduce the ratio of interest payments to revenue.\n  - Improve tax administration; consider more ambitious tax policy measures including reforming the value‑added tax, increasing excises, and rationalizing tax incentives.\n  - Implement an automatic fuel price‑setting mechanism, sound cash and debt management, improved transparency in the oil sector, increased monitoring of state and local government fiscal positions, and substantially scaled-up social safety nets."
    },
    {
      "heading": "External sector and oil",
      "content": "- Oil and production:\n  - Production of crude oil (million barrels per day): 1.81 (2016), 1.90 (2017), 2.10 (2018 projection), 2.20 (2019 projection)\n  - Price of Nigerian oil (US dollar per barrel): 44.6 (2016), 54.4 (2017), 67.8 (2018 projection), 63.9 (2019 projection)\n- Trade and current account:\n  - Exports of goods and services (annual percent change): -21.6 (2016), 25.7 (2017), 30.1 (2018 projection), 0.0 (2019 projection)\n  - Imports of goods and services (annual percent change): -34.7 (2016), 34.3 (2017)\n  - Current account balance (percent of GDP): 0.7 (2016), 2.0 (2017), 0.1 (2018 projection)\n- Directors welcomed recent foreign exchange measures and efforts to strengthen external buffers; urged unification of the exchange rate and removal of remaining restrictions and multiple exchange rate practices.\n- After arrears clearance in 2018, fiscal deficit would narrow and public debt levels would remain relatively low, but interest payments-to-Federal Government revenue ratio would remain high.\n- Stress scenarios highlight sensitivity of external and public debt to oil exports and naira depreciation; upside risk from faster implementation of infrastructure projects and higher international oil prices."
    },
    {
      "heading": "Financial sector and banking risks",
      "content": "- Banking sector vulnerabilities noted: rising banking sector risks should be contained.\n- Directors welcomed central bank commitment to increase capital buffers by stopping dividend payments by weak banks.\n- Recommended an asset quality review to identify potential capital needs.\n- Called for enhanced risk‑based banking supervision, strict enforcement of prudential requirements, and a revamped resolution framework."
    },
    {
      "heading": "Structural reforms and governance",
      "content": "- Continued structural reform implementation needed to diversify the economy and promote private‑sector‑led growth.\n- Priority actions include:\n  - Implement power sector recovery plan,\n  - Invest in infrastructure,\n  - Accelerate anti‑corruption and transparency initiatives,\n  - Update and implement financial inclusion and gender strategies.\n- Commended improvements in quality and availability of economic statistics and encouraged further efforts to address remaining gaps."
    },
    {
      "heading": "Key indicators (selected)",
      "content": "- Real GDP (at 2010 market prices): -1.6 (2016), 0.8 (2017), 2.1 (2018 projection), 1.9 (2019 projection)\n- Oil and Gas GDP: -14.4 (2016), 7.6 (2017), 10.8 (2018 projection), 5.7 (2019 projection)\n- Non‑oil GDP: -0.3 (2016), 0.2 (2017), 1.3 (2018 projection), 1.5 (2019 projection)\n- Nominal GDP at market prices (trillions of naira): 102.6 (2016), 121.0 (2017), 142.9 (2018 projection), 166.2 (2019 projection)\n- Nominal non-oil GDP (trillions of naira): 97.2 (2016), 113.1 (2017), 131.4 (2018 projection), 154.7 (2019 projection)\n- Nominal GDP per capita (US$): 2,254 (2016), 2,099 (2017), 2,268 (2018 projection), 2,567 (2019 projection)\n- Gross national savings (percent of GDP): 13.2 (2016), 14.9 (2017), 13.3 (2018 projection), 13.6 (2019 projection)\n- Investment (percent of GDP): 12.6 (2016), 12.9 (2017), 13.4 (2018 projection)\n- Credit to the private sector (y-o-y,%): -3.3 (2016), 1.0 (2017)"
    },
    {
      "heading": "Risks",
      "content": "- Balanced risks with main downside risks:\n  - Lower oil prices,\n  - Tighter external market conditions.\n- Domestic downside risks include:\n  - Heightened security tensions,\n  - Delayed fiscal policy response,\n  - Weak implementation of structural reforms.\n- Upside risks:\n  - Faster than expected implementation of infrastructure projects,\n  - Further uptick in international oil prices providing positive spillovers into the non-oil economy.\n\nSource: IMF press release \"IMF Executive Board Concludes 2018 Article IV Consultation with Nigeria\", March 7, 2018.\n\n---\n\n\n References\n\n- Staff Report\n- Selected Issues\n- Nigeria and the IMF\n- IMF Policy Advice -- A Factsheet\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/2018/03/07/pr1876-imf-executive-board-concludes-2018-article-iv-consultation-with-nigeria"
    }
  ],
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    "Published: March 7, 2018",
    "Executive Directors agreed with the thrust of the staff appraisal.",
    "Welcomed Nigeria’s exit from recession and the strong recovery in foreign exchange reserves, helped by rising oil prices and new foreign exchange measures.",
    "Commended progress implementing the Economic Recovery and Growth Plan, including:",
    "Noted remaining challenges: non‑oil, non‑agricultural sector has not picked up; inflation remains high and sticky; unemployment is rising; poverty is high.",
    "Urged comprehensive and coherent policy actions as urgent.",
    "The Nigerian economy is exiting recession but remains vulnerable.",
    "Economic growth reached 0.8 percent in 2017, driven mainly by recovering oil production.",
    "Growth projections:",
    "Improved oil prices expected to provide relief for external and fiscal accounts and support growth recovery.",
    "Medium-term projections indicate growth would remain relatively flat and per capita real GDP would continue to decline under unchanged policies.",
    "Inflation developments:",
    "Central Bank actions:",
    "Gross international reserves (US$ billions):",
    "Fiscal balances and revenue:",
    "Public debt metrics:",
    "Directors emphasized a growth‑friendly fiscal adjustment:",
    "Oil and production:",
    "Trade and current account:",
    "Directors welcomed recent foreign exchange measures and efforts to strengthen external buffers; urged unification of the exchange rate and removal of remaining restrictions and multiple exchange rate practices.",
    "After arrears clearance in 2018, fiscal deficit would narrow and public debt levels would remain relatively low, but interest payments-to-Federal Government revenue ratio would remain high.",
    "Stress scenarios highlight sensitivity of external and public debt to oil exports and naira depreciation; upside risk from faster implementation of infrastructure projects and higher international oil prices.",
    "Banking sector vulnerabilities noted: rising banking sector risks should be contained.",
    "Directors welcomed central bank commitment to increase capital buffers by stopping dividend payments by weak banks.",
    "Recommended an asset quality review to identify potential capital needs.",
    "Called for enhanced risk‑based banking supervision, strict enforcement of prudential requirements, and a revamped resolution framework.",
    "Continued structural reform implementation needed to diversify the economy and promote private‑sector‑led growth.",
    "Priority actions include:",
    "Commended improvements in quality and availability of economic statistics and encouraged further efforts to address remaining gaps.",
    "Real GDP (at 2010 market prices): -1.6 (2016), 0.8 (2017), 2.1 (2018 projection), 1.9 (2019 projection)",
    "Oil and Gas GDP: -14.4 (2016), 7.6 (2017), 10.8 (2018 projection), 5.7 (2019 projection)",
    "Non‑oil GDP: -0.3 (2016), 0.2 (2017), 1.3 (2018 projection), 1.5 (2019 projection)",
    "Nominal GDP at market prices (trillions of naira): 102.6 (2016), 121.0 (2017), 142.9 (2018 projection), 166.2 (2019 projection)",
    "Nominal non-oil GDP (trillions of naira): 97.2 (2016), 113.1 (2017), 131.4 (2018 projection), 154.7 (2019 projection)",
    "Nominal GDP per capita (US$): 2,254 (2016), 2,099 (2017), 2,268 (2018 projection), 2,567 (2019 projection)",
    "Gross national savings (percent of GDP): 13.2 (2016), 14.9 (2017), 13.3 (2018 projection), 13.6 (2019 projection)",
    "Investment (percent of GDP): 12.6 (2016), 12.9 (2017), 13.4 (2018 projection)",
    "Credit to the private sector (y-o-y,%): -3.3 (2016), 1.0 (2017)",
    "Balanced risks with main downside risks:",
    "Domestic downside risks include:",
    "Upside risks:",
    "[Staff Report](https://www.imf.org/en/publications/cr/issues/2018/03/07/nigeria-2018-article-iv-consultation-press-release-staff-report-and-statement-by-the-45699)",
    "[Selected Issues](https://www.imf.org/en/publications/cr/issues/2018/03/07/nigeria-selected-issues-45700)",
    "[Nigeria and the IMF](http://www.imf.org/external/country/NGA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[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](http://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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