The International Monetary Fund (IMF) has called for more savings from crude oil revenue to improve Nigeria’s budget deficit and funding.
The IMF Divisional Chief, Fiscal Affairs Department, Paulo Medas, spoke yesterday during the Fiscal Monitor briefing at the ongoing IMF /World Bank annual meetings in Washington DC.
He said while Nigeria has benefited from higher oil revenues, the fund has not seen an improvement in the deficits as expected because of the large energy subsidies, oil production and pressures on the budge
“So, our recommendation is to try to save some of these oil revenues but also address these emergency needs. Another aspect I would say is that Nigeria is one case where tax revenues are really low and this really undermines the capacity of the government to mark these types of shocks and to provide key services,” he said.
“In the case of Nigeria, where the priority is really domestic revenue mobilisation you need to increase the state capacity to address the needs of the country. And this will also help make fiscal policy work consistently in efforts to ensure economic stability.”
On the disparity in fiscal and monetary polices, he noted: “Governments are facing a very difficult environment where you can in many countries they have digit inflation and in this aspect, fiscal policy needs to help monetary policy working together to ensure price stability. This is absolutely critical for stable growth and for some public finances in the countries.’’
Countries like Nigeria especially that are oil exporters can take advantage of rising commodity revenues to address some of these needs and to reduce debt.”