Eromosele Abiodun and Nume Ekeghe in Washington DC

Managing Director of International Monetary Fund (IMF), Kristalina Georgieva, yesterday, called on Nigeria and other African countries to deepen fiscal buffers, adopt context-specific monetary policies, and advance regional economic cooperation in order to cushion the effect of global headwinds and unlock long-term inclusive growth.

Georgieva made the assertion during the launch of IMF’s latest Global Policy Agenda Report, titled, “Anchoring Stability and Promoting Balanced Growth,” at the ongoing World Bank/IMF Spring Meetings in Washington.

She highlighted the continent’s mixed growth outlook and called for a renewed commitment to structural reforms.

Speaking further on fiscal reforms, she said, “Don’t hide behind excuses, and say we can’t go for more tax because, you can. There is a lot that can be done to broaden the tax base, and a lot that can be done to reduce tax evasion and tax avoidance, using technology, as some countries are doing, to chase the tax dollars, when there is the foundation for that, is a very good thing to do.”

Georgieva pointed out that while Africa remained home to some of the world’s fastest-growing economies, a significant number of low-income and fragile states were increasingly falling behind, especially in the wake of slowing global growth and rising geopolitical risks.

She explained, “We have seen over the last years, the African continent having some of the fastest growing economies, but we also have seen low-income countries primarily and among the fragile conflict-affected countries falling further behind, and now this, this is a shock for the continent.”

Georgieva stated that while the direct effect of trade tariffs on most African countries was minimal, the indirect consequences, particularly, from a slowdown in global growth posed more serious challenges, especially for oil-exporting countries, like Nigeria.

Georgieva stated, “The direct impact of tariffs on most of Africa, not on all of Africa, but on most of Africa, is relatively small, but the indirect impact is quite significant.

“Slowing global growth means that, all other things being equal, they would see a downgrade. And actually, we have downgraded the growth prospects for the continent, for the oil producers, like Nigeria, falling oil prices create additional pressure on their budgets. On the other hand, for the oil importers, this is a breath of fresh air.

“In other words, different countries face different challenges. If I were to come up with some basic recommendations that apply to Africa, I would say they apply to Nigeria, Egypt, Ghana, and they apply to Cote d’Ivoire. 

“First, continue on the path of strengthening your buffer levels. There is still a lot that can be done on the fiscal side, to have strength and to have the buffers for a moment of shock, and don’t use any excuses around.”

The IMF managing director urged Nigeria and other governments in Africa to do more to expand their tax base and tackle leakages through digital tools.  She warned against copycat monetary policies, urging central banks to respond based on country-specific inflation pressures rather than mimic regional peers.

She added, “On the monetary policy side, we are no more in a place where you can look at the book of the central bank governor of the neighbouring country and say, ‘Oh, they’re doing this, let’s try out the same,’ because you have to really assess domestically, what your inflationary pressures are and do the right thing for your country.”

Georgieva also made a passionate call for Africa to rebrand its global image, stating that corruption and conflict in one country cast a long shadow over the entire region.

She added, “But above all, make it so that the image of the whole continent changes, because now everybody suffers from wrongdoing, from corruption or conflict in one country, it throws a shadow on the rest of the continent. And finally, like Asia, there is a need to deepen inter-regional trade and cooperation, remove the obstacles.”

She also underscored the importance of boosting intra-African trade, comparing the continent’s potential to that of Asia and welcomed World Bank efforts to ease infrastructure barriers to trade.

She added: “Sometimes they are infrastructure obstacles. The World Bank is working on reducing the infrastructure obstacles to broaden trade. Africa has so much to offer the world. They have the minerals, better resources, and a young population. I think that a more unified, more collaborative continent can go a long, long way to be an economic powerhouse.”

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