IMF asks Nigeria to create single liquid forex market

The International Monetary Fund (IMF) has urged Nigeria to focus on creating a liquid single foreign exchange market to improve on its recent achievement in the forex market.
The IMF Director of African Department, Abebe Aemro Selassie, during the Africa Briefing session at the just concluded IMF-World Bank Group meetings in Washington DC, commended the country for achieving stability in the forex market so far.
He said Nigeria has made good progress on reducing the imbalances on the foreign exchange market over the last several months, noting that the IMF has been encouraged on that progress.
“If you look at the gap between the parallel market and the bank rate, which was very wide initially, where businesses were complaining about not having access to foreign exchange over the last four to five months, that has changed and we are encouraged by it,” Selassie said.
On the fiscal policy side, he noted the Africa’s biggest economy efforts in tax administration and making sure that people complied.
“Our guess is that there would also be need for tax policy changes for Nigeria, which would go a long way to improve revenue mobilisation. These resources are needed to strengthen infrastructure in Nigeria, and many schools that have to be built and health delivery system.
“In terms of designing tax policies changes, we advise countries and provide technical assistance in a way that is progressive,” he added.