Nigeria’s forex policy unsustainable without reforms –World Bank

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Any progress that makes availability of dollars in its economy temporarily possible can only be sustainable, if a more definite reform policies are put in place by the government.

This is part of the views of the World Bank chief economist for Africa Albert Zeufack, who on Wednesday, told newsmen that the bank had been following closely the efforts being made to ensure that the country’s local currency, the naira, regains strength in its exchange rate-ratio with major currencies.

He said more concerted financial reform policies, that would be structurally-driven must be put in place to avoid Nigeria reverting to the old system that brought it to the level of finding itself in its worst recession in its history.

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Zeufack, who spoke to foreign journalists via phone conference, monitored by Ripples Nigeria, could not speak on the fate of Nigeria’s pending loan request before the World Bank, since 2016.

Said he: “Making fiscal adjustments in the West African country, now in its second year of recession would be extremely challenging.

“However, its currency adjustments could lead to higher inflation without following known standards, which means that continued monetary policy, including tightening the loose ends could reduce pressures on purchasing powers of its people.

“It is not a hidden fact that the Africa’s biggest economy, Nigeria, is facing a currency crisis, caused by low oil prices, which has affected its foreign reserves and created chronic dollar shortages”.

Zeufack stopped short at repeating the International Monetary Fund’s (IMF’s) stance that Nigeria should devalue its currency, as against the current periodical approach of pumping dollars to the inter-bank foreign exchange market by its central bank.

Read also: World Bank rates Nigeria fourth in Global Trade Logistics in West Africa

He also frowned at what he termed “excess borrowing, which has a way of retarding economic growth of development nations.”

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Emma Eke