The International Monetary Fund IMF, has warned against a delay in structural reforms in petroleum exporting countries where it is seriously needed. This day reports.
The IMF sounded out this warning to countries like Nigeria, cautioning against holding back reforms because of the currently high oil prices.
According to the report, this was disclosed by the Counsellor and Director of the Research Department, IMF, Maurice Obstfeld.
Obstfeld gave the warning yesterday during the unveiling of the IMF’s World Economic Outlook (WEO), at the ongoing annual meetings of the IMF-World Bank in Bali, Indonesia.
The IMF also predicted a rise in inflation rate in Nigeria to at least 13.5% in 2019.
It further urged Nigeria to develop its non-oil revenue generating sectors in other to consolidate economic growth and stability.
Evidence shows that the build up to the imposition of sanctions on Iran by the United States is causing a decline in oil exports from the country.
This has caused a steady rise in oil prices in the World as Iran is OPEC’s third largest producer of oil.
Also with the Gulf of Mexico experiencing a hurricane move recently, the impact is felt on the oil market. Yesterday, the Brent crude closed at $84.17 a barrel.
But while briefing newsmen, Obstfeld insisted on the strengthening of fiscal positions of countries in other to reduce the likelihood of increased debts in such countries like Nigeria.
“Fuel exporters should guard against the temptation to let higher oil prices delay reforms. Despite their recent recovery, oil prices are projected to remain below the 2013 peak”
“Boosting non-oil revenues and continuing fiscal consolidation plans remain key goals for oil exporters” he warned.
“The focus should be on growth-friendly fiscal adjustment, with a shift in spending toward productive and social outlays”
“accompanied by front loaded domestic revenue mobilisation, through for example, broadening the tax base and strengthening revenue administration” he added.
“Moreover, enhancing financial resilience through proactive banking supervision, ensuring adequate provisioning for losses by banks, and improving resolution frameworks to keep expensive public bailouts at bay can help foster a financial system supportive of growth.” he said.
The IMF chief also reiterated that straightening educational standards as well as enhancing the macroeconomic resilience of low-income countries, will also help promote economic growth and stability.
