Nigeria: Staff Report for the 2020 Article IV Consultation—Informational Annex

2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Alternate Executive Director for Nigeria


2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Alternate Executive Director for Nigeria

Fund Relations

(As of October 31, 2020) Membership Status: Joined: March 30, 1961;

Article XIV

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Outstanding Purchases and Loans: None

Latest Financial Commitments:


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Overdue Obligations and Projected Payments to Fund 1/

(SDR Million; based on existing use of resources and present holdings of SDRs):

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When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative: Not Applicable

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

Implementation of Catastrophe Containment and Relief (CCR): Not Applicable

Exchange Rate Arrangement

The de jure exchange rate arrangement is described as floating by the authorities. The main objectives of exchange rate policy in Nigeria are to preserve the value of the domestic currency, maintain a favorable external reserves position and ensure external balance without compromising the need for internal balance and the overall goal of macroeconomic stability.The de facto exchange rate arrangement is classified as stabilized.

Nigeria maintains the following exchange restrictions subject to Fund approval under Article VIII, Section 2(a) of the IMF’s Articles of Agreement: (i) an exchange restriction arising from the prohibition to access foreign exchange at the Nigerian foreign exchange markets for the payment of imports of 42 categories of items;1 (ii) an exchange restriction arising from the rationing of foreign exchange by the CBN in different FX windows, and its allocation based on the CBN’s determination of priority categories of transactions; and (iii) an exchange restriction arising from existing limits on the amounts of foreign exchange available when traveling abroad (BTA/PTAs), which cannot be exceeded even upon verification of the bona fide nature of the transaction. In addition, Nigeria maintains the following MCPs subject to Fund approval under Article VIII, Section 3 of the IMF’s Articles of Agreement: (i) an MCP arising from the intervention practice of the CBN that results in the establishment of an official exchange rate for use in official (government) transactions and some other transactions, 2 which may differ by more than 2 percent from the rate used by commercial banks in other CBN FX windows (SMIS, SME, IEFX and Invisibles), and by money transfer operators; and (ii) an MCP arising from the large spread between exchange rates used by the CBN in its FX windows and the rates in the parallel market, caused by the CBN’s limitation on the availability of foreign exchange which channels current international transactions to such market; and (iii) an MCP arising from the potential spread of more than 2 percent in the exchange rates at which the CBN sells foreign exchange to successful auction bidders in the SMIS window.

Safeguards Assessment

A safeguards assessment of the CBN is currently in progress in connection with the RFI approved in April 2020. The analysis of the CBN Law reconfirmed the need to modernize the central bank legal framework by enshrining price stability as CBN’s primary objective, strengthening autonomy and governance, limiting credit to government and phasing out quasi-fiscal operations. Important departures from leading practices are also apparent in the area of financial reporting.

Article IV Consultation

Nigeria was on the standard 12-month Article IV consultation cycle until the COVID-19 pandemic. The previous Article IV consultation was concluded on March 27, 2019.

Technical Assistance (TA) since January 2019

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Mission Chief and Resident Representative:

Ms. Jesmin Rahman has been the IMF’s Mission Chief since May 2020. Mr. Ari Aisen has been the IMF’s Resident Representative since October 2020.

Resident Technical Assistance Advisor:

Mr. Leonard Chumo was the IMF resident advisor for banking supervision at the Central Bank of Nigeria, during February 2017- March 2020.

Relations with Other International Financial Institutions

World Bank:

African Development Bank

Statistical Issues

(As of November 2020)

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Nigeria: Table of Common Indicators Required for Surveillance

(As of November 24, 2020)

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Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments. However, the expenditure data for state and local governments are not available.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.


One of the 43 items on the list is the foreign securities. The prohibition by the CBN to purchase FX for such securities on the Nigeria FX market constitutes a capital flow management measure (CFM) but not an exchange restriction for current international transactions.


Fuel importers have access to FX at this rate, and banks have access to US$50,000 per day on a rotating basis at this rate.