ABUJA, MARCH 30, 2017 – The International Monetary Fund called on Nigeria on Thursday to lift its remaining foreign exchange restrictions and scrap its system of multiple exchange rates to revive the country’s recession-hit economy.
The call came as part of a regular assessment of a country’s economy, in which the IMF also forecast that Nigeria’s economy would grow 0.8 percent this year.
In 2016, Nigeria fell into its first annual recession in 25 years, which was largely caused by the impact of low oil prices and attacks by militants on energy facilities in the Niger Delta oil hub.
Sales of crude account for more than 90 percent of foreign exchange earnings in Nigeria and most of government revenues.
President Muhammadu Buhari has rejected a devaluation of the naira currency and backed restrictions imposed by the central bank that force firms to buy dollars needed for imports for a premium on the rate available on the black market, where the currency trades around 30 percent weaker than the official exchange rate.
The fund said its directors “urged the authorities to remove the remaining restrictions and multiple currency practices, thus unifying the foreign exchange market and helping regain investor confidence”.
Africa’s most populous country has at least five exchange rates which include the official one, a rate for Muslim pilgrims travelling to Saudi Arabia, one for school fees abroad and a retail rate set by licensed exchange bureaux.