The International Monetary Fund has said it is important for Nigeria to solve its power problem which has made the cost of doing business very high.
It also described the recourse to the use of highly inefficient generators as harmful.
The Director, African Department, IMF, Abebe Selassie, said this during a press briefing on regional economic outlook, Sub-Saharan Africa on Friday.
Selassie spoke while responding to a question on how much the global shift for greener energy would affect Nigeria’s economy considering that Nigeria had not made a significant push in that direction.
He said, “In the case of Nigeria, ensuring that the country enjoys or unleashes its tremendous potential requires reforms in three areas, in our view.
“I think first and foremost is that more fiscal space needs to be created through domestic revenue mobilisation to pay for investments in health, in education, in infrastructure, which Nigeria swiftly needs.
“Second, I think reforms in the energy sector are going to be paramount. The cost of doing business is very high on account of the inefficiencies in the energy sector, power supply interruptions, and the famous recourse to the use of highly inefficient and harmful generator up and down the country.
“Again, getting power supply, getting policies to make sure that Nigeria resolves this problem once and for all, I think, is also paramount. And thirdly, macroeconomic policy calibration, things like creating deep and liquid foreign exchange markets will be important.”
Selassie said the IMF was seeing quite a lot of countries going through a recovery in 2021 after the negative impacts of the 2020 lockdown introduced to curtail COVID-19 spread.
He said, “And so, that will give strong growth outcomes this year in many cases. This is very different from saying that the fundamental drivers of growth over the medium to long term have been improved in a dramatic way, allowing stronger growth. So, that’s a point I would stress.”
