Nigeria will need to balance monetary and fiscal policies in order to overcome its worst economic crisis in decades and return to growth, President Muhammadu Buhari said on Thursday.
Africa's biggest economy is suffering from a slump in oil revenues hammering public finances and the naira currency. Gross domestic product shrank in the first quarter and the central bank governor has said a recession is likely.
The government has shelled out 432 billion naira ($1.23 billion) on capital expenditure this year to help revive construction and other projects, the vice president said last week.
Buhari said the central bank was helping the economy with "specific intervention programmes" but the country needed to balance monetary and fiscal policies.
"We fully understand that monetary policy alone is not sufficient to bring about desired economic growth," Buhari told a meeting of African central bank governors in Abuja.
He did not elaborate, reiterating only the government wanted to diversify the economy away from its "excessive reliance on oil."
Economists have criticised the government for not doing enough to address the crisis. Tens of thousands of people have been laid off because contractors have not been paid.
The central bank raised interest rates last month, and has been soaking up liquidity in order to support the naira, which has lost around 40 percent of its value since it was floated in June. It hopes the move will lure foreign investors who fled bond and equities markets as oil prices slumped.
The African central bank governors were meeting to discuss ways to safeguard their economies from the expected impact of unwinding loose monetary policies in developed economies.
"Last year over $40 billion moved out of emerging markets ... and that is why you see most African countries suffering from exchange rates pressures," Nigerian central bank governor Godwin Emefiele said.
*Copyright Reuters News
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