Nigeria needs to diversify economy and end reliance on oil to fight poverty – IMF Boss

NIGERIA – Newly appointed Managing Director of the International Monetary Fund MD, Ms Kristalina Georgieva, has said that Nigeria needs to diversify the economy from the oil in order to reduce the level of economic vulnerabilities currently facing the country.

Georgieva, who said this in Washington DC, United States, during the World Bank/IMF annual meetings, explained that the level of economic growth in the country was too slow to reduce its poverty rate.

According to the IMF boss, the multilateral financial institution understood how important Nigeria is to the economy of Africa and it is for this reason that it had consistently advised the need for a major improvement in the fiscal space particularly in relation to revenue, economic diversification and corruption.

In the area of revenue, she said that Nigeria’s economic recovery still remains too slow to reduce vulnerabilities and most importantly to reduce poverty in the country.

She noted that IMF has been quite consistent to talk about three issues in Nigeria adding that the tax collection levels in Nigeria leave quite a lot of room for improvement and “without strengthening the fiscal position of the government, the expenditure side would suffer.”

She said the IMF had always recommended an increase in tax revenue to Gross Domestic Product from the current 7 to 8 percent to 15 percent, adding that at this level, the government would be able to finance its programmes.

In the area of economic diversification, Georgieva said that the bank has been consistently recommending the country to diversify the economy because reliance on oil is no longer sustainable

On the fight against corruption, she said there was a need for a strong anti-corruption policy that would be unambiguous.

“Fight corruption and make sure that the richness of Nigeria serves Nigerians inside the country and in that regard, the Fund last year adopted a very clear, strong policy on anti-corruption,” said the IMF boss.

“We engaged with governments to build their capacity to make serving the citizens of the country with the money of the country possible,” added Ms. Georgiva.

On the global front, she said that the global economy would slow down due to rising trade barriers between countries that impede free trade.

She however said that with the right mix of policies and structural reforms, countries could unleash economic growth.