Nigeria still needs to control inflation and stabilise its foreign exchange market following currency reforms and the removal of a petrol subsidy, the World Bank said on Wednesday, to boost economic growth.
Nigerian President Bola Tinubu has embarked on the country’s biggest reforms in decades, including scrapping the popular but expensive petrol subsidy, unifying the country’s multiple exchange rates and putting measures in place to double tax revenue.
World Bank lead economist for Nigeria Alex Sienaert said during a presentation in the capital Abuja that the government still had work to do.
Siernaet said Nigeria should tighten monetary policy and phase out so-called ways and means borrowing and the development finance initiatives by the central bank, part of a series of unorthodox policies used by former central bank Governor Godwin Emefiele.
New central bank Governor Olawale Cardoso has already begun rolling back Emefiele’s policies.
He has adopted an inflation-targeting policy, ended all direct interventionist programmes, which he said blurred the lines with monetary policy, and begun clearing foreign exchange backlogs, estimated at $7 billion, that were owed to banks.
“We will be using inflation-targeting and we will ensure that the use of monetary policy actually cascades down and has an impact,” Cardoso said in response to Siernaet’s call.