Our Nigerian authorities appreciate the very productive engagements with the mission team and the candor of the 2017 Article IV report. The authorities agree that despite the steps already taken to tackle vulnerabilities in the economy, further actions are required to restore growth and alleviate poverty rooted over many years.
While we welcome the recommendations to rebuild confidence in the near term and foster recovery over the medium term, the authorities are concerned about staff’s view that policy response has been inadequate. In 2016, the authorities undertook a number of corrective measures to place the economy on track, including an increase in the fuel price by 70 percent, raising the monetary policy rate to 14 percent, and allowing substantial depreciation of the interbank exchange rate to bring the naira more in line with fundamentals. Additional measures are underway including, charting a sustainable fiscal policy, maintaining tight monetary policy to underpin price stability, implementing a more flexible foreign exchange (FX) market, and continuing structural reforms to improve competitiveness and facilitate economic diversification within the context of the new economic recovery plan.