The International Monetary Fund (IMF) has thrown its weight behind the planned increase in Value Added Tax (VAT) by the Federal Government.

The Organisation also encouraged the country look into increasing other forms of taxes, from non oil revenues, as a means of raising more funds.

This was disclosed on Wednesday in a press release after the conclusion of the IMF Executive Board 19 Article IV Consultation with Nigeria.

The Executive Directors said with 2.5 percent in the medium term, and with population growing at a faster rate, growth per capital will be less than zero percent.

The statement read in part, ‘’They welcomed the authorities’ tax reform plan to increase non-oil revenue, including through tax policy and administration measures.

‘’They stressed the importance of strengthening domestic revenue mobilization, including through additional excises, a comprehensive VAT reform, and elimination of tax incentives. Securing oil revenues through reforms of state owned enterprises and measures to improve the governance of the oil sector will also be crucial.’’


It also called on the Central Bank of Nigeria (CBN) to stop its direct intervention in the foreign exchange market.

“They stressed the importance of strengthening domestic revenue mobilization, including through additional excises, a comprehensive VAT reform, and elimination of tax incentives.

“Directors highlighted the importance of shifting the expenditure mix toward priority areas. They welcomed, in this context, the significant increase in public investment but underlined the need for greater investment efficiency.

“They also recommended increasing funding for health and education. They noted that phasing out implicit fuel subsidies while strengthening social safety nets to mitigate the impact on the most vulnerable would help reduce the poverty gap and free up additional fiscal space.”

The Directors also emphasized the need to strengthen governance, transparency, and anti-corruption initiatives, including by enhancing AML/CFT and improving accountability in the public sector.

‘’Directors also recommended establishing a credible time bound recapitalization plan for weak banks and a timeline for phasing out the state backed asset management company AMCON,’’ part of the release stated.

Liberia’s economic growth will stall this year as high inflation overwhelms gains made in revenue collection in the West African nation, the International Monetary Fund staff said in a report on its website.

The economy will expand 0.2 percent in 2019 under current policies, down from an earlier estimate of 4.7 percent, the IMF said Friday. The agency said 2018 growth was 1.2 percent, lower than 2.5 percent in 2017. Inflation jumped to 28 percent in December, the Washington-based IMF said.

“Liberia’s economic situation is challenging, and strong policy actions will be required to maintain as favorable outlook as anticipated at this time last year,” IMF team leader Mika Saito said in the statement. “Stability has proved elusive despite improved revenue collection in the first half” of the 2019 fiscal year.

The IMF staff in Liberia recommended fiscal policies and improving the efficiency of government spending.

“Policies should aim at improve the monitoring, accountability, and transparency of spending,” Saito said. “Intensifying actions to improve governance and fight corruption, including through rigorous adherence to existing procurement rules, would also be effective.”



Sub-Saharan Africa is among regions in the world projected to record accelerated economic growth in 2019, amid a slowdown in global growth precipitated by heightened trade tensions and rising interest rates in the US.

The International Monetary Fund says that GDP growth in sub-Saharan Africa will rise from 2.9 per cent posted last year to 3.5 per cent this year, and 3.6 per cent in 2020.

The projection is however a 0.3 percentage point lower, blamed partly on the declining crude oil prices, which have plummeted from a high of $85 a barrel and are expected to average $60 this year.

These have significantly impacted growth for oil-producers Angola and Nigeria.

One-third of sub-Saharan economies are expected to post growth above five per cent, raising optimism of impressive performance in a year when external shocks, including trade tensions, rising US interest rates, dollar appreciation, capital outflows and volatile oil prices are expected to continue.

More critically, the nagging challenges of ballooning debt, expanding recurrent expenditures and slowdown in revenue mobilisation will continue to curtail growth.

"Across all economies, measures to boost potential output growth, enhance inclusiveness and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives," says the IMF in its World Economic Outlook 2019 report.

The Fund forecasts that 2019 will not be a good year for the global economy, whose growth is projected to decline to 3.5 per cent from 3.7 per cent last year, largely due to an escalation in trade wars between the US and China.

The US has imposed import taxes on steel, aluminium and hundreds of Chinese products, drawing retaliation from China and other US trading partners like Mexico and Canada.

Other factors include the messy Brexit process, Italy's financial struggles, volatile commodity prices and rising interest rates in the US, which are projected to impact heavily on the global economy

Growth in advanced economies will slow from an estimated 2.3 per cent in 2018 to 2.0 per cent in 2019 and 1.7 per cent in 2020.

Growth in the Euro region is set to moderate from 1.8 per cent in 2018 to 1.6 per cent in 2019, while in the US, it is forecast to remain flat at 2.5 per cent, and decline to 1.8 per cent in 2020.

Growth in Asia is expected to dip from 6.5 per cent in 2018 to 6.3 per cent this year, and 6.4 per cent in 2020, with China's declining from 6.6 per cent to 6.2 per cent due to the combined influence of financial regulatory tightening and trade tensions with the US.

India's growth on the other hand, is poised to pick up to 7.5 per cent from 7.3 per cent last year, benefiting from lower oil prices and a slower pace of monetary tightening, plus easing in inflationary pressures.

In Latin America, growth is projected to recover from 1.1 per cent in 2018 to 2.0 per cent this year, and 2.5 per cent in 2020.


Credit: East African

The International Monetary Fund has warned that escalating trade tensions could undermine global economic growth.
In a new report on the world economic outlook, the IMF also warns of risks from a no-deal Brexit.
For the world economy, the IMF is now predicting growth of 3.5% in 2019. In October, it forecast 3.7%.
For the UK, the report predicts growth of about 1.5% this year and next, but it also says there is substantial uncertainty around that figure.
The global figure represents weaker growth than last year.
Tariff increases imposed by the Trump administration in the US and its counterpart in Beijing have already contributed to a previous downgrade.
The IMF also expects China's slowdown to continue. The forecast for this year and next is 6.2%.
In this new assessment, there are revisions for the developed economies, particularly the eurozone.
That reflects disruptions to the motor industry in Germany from new fuel emissions standards.
There are also concerns about Italy, where financial markets have been unsettled by government plans to expand spending. There are continued weaknesses in the country's banking system as well.
Brexit uncertainty:
The outlook for the UK is especially uncertain, although there is a small upward revision to the forecast for next year. The 2019 figure is unchanged.
The predictions are based on the assumption that a Brexit deal is reached this year and that there is a gradual transition to the new relationship with the European Union. The IMF has warned before that a no-deal Brexit would involve substantial costs for the British economy.
Why China's slowdown should worry us all
Clouds gathering over the global economy
There are also a range of factors that weigh on the outlook for some emerging and developing economies. Iran is affected by sanctions, Saudi Arabia by weaker oil production.
The economies of both Turkey and Argentina are predicted to contract, as is Venezuela's, but it is likely to be even more severe in that case than previously expected.
All that said, the main global forecast of 3.5% does, nonetheless, still constitute a respectable increase in economic activity.
But the concern that it might not turn out so well is unmistakable.
Trade tensions appear to be the biggest worry and they have been a recurrent theme in recent IMF assessments of the economic outlook. That is reflected in the IMF's call for action from its member countries' governments.
"The main shared policy priority is for countries to resolve co-operatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers further and destabilising an already slowing global economy," the IMF said.
The report recalls that in its October forecast, there had already been a downgrade, partly due to the impact of the tariff increases enacted by the US and China.
'Escalating risks'
The IMF also says there are risks from financial markets.
The IMF's chief economist, Gita Gopinath, said: "While financial markets in advanced economies appeared to be decoupled from trade tensions for much of 2018, the two have become intertwined more recently, tightening financial conditions and escalating the risks to global growth."
In addition to global trade tensions, the report mentions a more substantial slowdown in China and a no-deal Brexit as possible triggers for a future deterioration in financial markets.
The general thrust of this report is that the IMF expects the recovery from the great recession of 2008-09 to continue. But the clouds, though, are gathering.
Source: BBC
The International Monetary Fund (IMF) has put Nigeria’s debt at 34 percent of the country’s Gross Domestic Product (GDP).
The Fund revealed this in a new data it released on Wednesday, adding that global debt had reached an all-time high of $184 trillion in nominal terms, the equivalent of 225 per cent of Gross Domestic Product in 2017.
The IMF also warned of what it called “a legacy of excessive debt”.
In the new data released on the Fund’s website, IMF put total debt in Nigeria at 34 per cent of the nominal GDP of $376bn as of December 2017, with private debt accounting for 36.6 per cent of the debt.
Listing Nigeria among the low-income developing countries, IMF said public debt continued to grow in 2017 and, in some cases, reached levels close to those seen when countries sought debt relief.
“With financial conditions tightening in many countries, which includes rising interest rates, prospects for bringing debt down remain uncertain. The high levels of corporate and government debt built up over years of easy global financial conditions constitute a potential fault line.
“So, as we close the first decade after the global financial crisis, the legacy of excessive debt still looms large”, the IMF said.
According to the IMF data, on average, the world’s debt now exceeds $86,000 in per capita terms, which is more than two and a half times the average income per-capita.
“The most indebted economies in the world are also the richer ones. The top three borrowers in the world — the United States, China, and Japan — account for more than half of global debt, exceeding their share of global output.
“The private sector’s debt has tripled since 1950. This makes it the driving force behind global debt. Another change since the global financial crisis has been the rise in private debt in emerging markets, led by China, overtaking advanced economies. At the other end of the spectrum, private debt has remained very low in low-income developing countries.”
The IMF said global public debt, on the other hand, had experienced a reversal of sorts.
It added, “After a steady decline up to the mid-1970s, public debt has gone up since, with advanced economies at the helm and, of late, followed by emerging and low-income developing countries.
“For 2017, the signals are mixed. Compared to the previous peak in 2009, the world is now more than 11 percentage points of GDP deeper in debt. Nonetheless, in 2017 the global debt ratio fell by close to 1½ per cent of GDP compared to a year earlier.”
It said the last time the world witnessed a similar decline was in 2010, although it proved short-lived.
“However, it is not yet clear whether this is a hiatus in an otherwise uninterrupted ascending trend or if countries have begun a longer process to shed more debt. New country data available later in 2019 will tell us more about the global debt picture,” the IMF said.
Source: The Ripples

Affectionately known as big brother to various countries of the world (especially the third world), the voice of the International Monetary Fund speaks loudest in times of dire distress.

Their mission of offering help to countries in an economic crisis (protracted talks are still on-going with Zambia) has given rise to this name. But is the IMF really the good big brother?

Well, this is a question that invokes so much debate. To many politicians and other mainstream thinkers especially in the Washington corridors of power, its formation together with its twin brother institution the World Bank down Bretton Woods was a stroke of genius and its work is highly noble. According to the protagonists, the IMF clean up the mess of a little child who cannot think for himself and to dare question the nobility of the IMF is sheer foolishness on the part of the critics. When a child messes up, he shouldn’t dare say anything; he should just let the elders do the necessary clean-up, they have argued. 

As a result of such perspective, the IMF always see themselves as the clean-up guys, coming with as much force and authority to the negotiating table. Sit back and let us handle your mess is the unspoken rule of the game for the men in black suits from Washington DC.

Critics on the other hand are highly vocal of their detest for the IMF. The sound of the name IMF itself is like a sharp knife slowly being driven down through their bowels. It’s painful to say the least. To them, the IMF is an angel of death bent on bringing nothing but suffering to the common man and creating an illusion of nobility that only benefits their paymasters and a few elites in host countries. The voting structure has especially been one grey area that has been subject to much ridicule by the critics.

Under the IMF, voting structure is based on a quota system assigned to each country based on its relative position in the world economy. Under this system, it is basic votes (same for all countries) plus one vote for every SDR100, 000 held. In layman language, the more financial contribution a country makes, the greater the voting power. The USA alone has an 18 percent voting rights and the only nation with power of veto, this further grows to 38 percent when you add Germany, Japan, France and Britain as of 2016 data.

This quota based voting system has in a way divided countries into two broad groups, that is, creditors and debtors and has effectively put them on a collision course with differing interests. This according to the critics has been the root of all the “silent evil” associated with the institution as it endeavors to pursue the interests of its largest shareholders in most of its dealings, after all, “he who pays the piper calls the tune”. The verdict for this group is very clear, anything but the IMF. Former Tanzanian president, Julius Nyerere had some misgivings about the IMF as he was fearful that debt-ridden African states were ceding sovereignty to the institution and once famously asked “who elected the IMF to be the ministry of finance for every country in the world? 

As a result, there have been calls for an “alternative” financier of the last resort that would work within the dynamic and context of emerging markets economies proposed by this group. An idea that has given birth to regional or block financial institutions like the New Development Bank by the BRICS nations. However, this initiative has not yet gained traction to challenge the mighty IMF, needless to say, it’s a step in the right direction.

The author’s perspective? Well, it’s not so much of a perspective as it is a riddle wrapped in a mystery. A riddle that I haven’t yet solved. On the one hand, a good grounding in Economics gives me some insight into their way of thinking. A country in dire economic stress needs committed and disciplined fiscal and monetary reforms coupled with other structural reforms to put it on the road to recovery.

However, what puzzles me the most is how the IMF since time immemorial has relied on what I call the “Red pill” to cure “all” its patients. The proverbial red pill is simply the neoclassical reforms that the IMF imposes on every other country that comes knocking on its doors. To treat countries as diverse as Ghana, Greece, Bolivia, Zambia and Argentina just to mention a few as the same simply puzzles me. I believe Economics and economies in general are dynamic, always to be interpreted within a certain context. Any chance of successful reform in my view should take into consideration the unique context of a particular economy. The red pill in my view is not some magic wand that will observe the law of gravity in any part of the world it is used. This is misguided thinking. In some cases, it has to be taken whole, in others, half a tablet and in still other cases with a pinch of salt.  

For now, however, the IMF puzzle is one am yet to solve. However the case, it’s a puzzle in which something somewhere is amiss. What is your verdict on big brother?

The author of this article is an Economist, Writer and Business Executive. The views expressed herein are solely my views and do not in any way represent the views of my employer, church and any other organization I am affiliated to.

Contact at This email address is being protected from spambots. You need JavaScript enabled to view it.

The First Deputy Managing Director of the International Monetary Fund, IMF, David Lipton, Tuesday, warned that `storm clouds’ were gathering over the global economy.
According to Lipton, who said governments and central banks might not be well equipped to cope, the fund had been urging governments to “fix the roof” during a sunny last two years for the world economy.
“But like many of you, I see storm clouds building, and fear the work on crisis prevention is incomplete,” he said.
Lipton, who spoke at at banking conference hosted by Bloomberg, also warned that strains could leave policymakers under pressure and in uncharted water.
“Central banks would likely end up exploring ever more unconventional measures.
“But with their effectiveness uncertain, we ought to be concerned about the potency of monetary policy”, he said.
Source: Premium Time
The International Monetary Fund (IMF) has put the global debt at $180 trillion, warning highly indebted emerging-markets and low-income countries against what it termed pro-cyclical fiscal policies.
IMF Managing Director, Christine Lagarde, in a statement issued at the conclusion of the Group of 20 (G-20) Summit in Buenos Aires, called for collaborative action by G-20 leaders as global growth moderates and risks increased.
Ms Lagarde emphasised that global growth remained strong, but that it was moderating and becoming more uneven.
She said pressures on emerging markets had been rising and trade tensions have begun to have a negative impact, increasing downside risks.
“Another urgent issue is the excessive level of global debt – about $182 trillion by the IMF’s estimate.
“It is important, particularly for highly indebted emerging-market and low-income countries, to rebuild buffers and reverse pro-cyclical fiscal policies.
“Increasing debt transparency, such as on the volumes and terms of loans, by borrowers as well as lenders, is as important as supporting debt sustainability,’’ Lagarde said.
According to her, choosing the right policy is, therefore, critical for individual economies, the global economy, and for people everywhere.
“The choice is especially stark regarding trade.
“We estimate that if recently raised and threatened tariffs were to remain in place and announced tariffs were implemented, about three-quarters of one per cent of global GDP could be lost by 2020.
“If instead, trade restrictions in services were reduced by 15 per cent, global GDP could be higher by one-half of one per cent.
“The choice is clear: there is an urgent need to de-escalate trade tensions, reverse recent tariff increases, and modernise the rules-based multilateral trade system.’’
To meet the challenges facing the global economy, the IMF chief made several policy recommendations to the G-20 leaders.
“First, fix trade – this is priority number one to boost growth and jobs.
“Continue to normalise monetary policy in a well-communicated, gradual, data-driven manner and with due regard to potential spill-over effects.
“Address financial risks, using micro and macro-prudential tools to tackle problems related to the leveraged ending, deteriorating credit quality and high exposure to foreign currency or foreign-owned debt.
“Use exchange rate flexibility to mitigate external pressures, avoiding tariffs and other policies that could weaken market confidence.
“Finally, eliminate legal obstacles to the participation of women in the economy which is key to tackling high and persistent inequality and would add to the growth potential of all G-20 countries,’’ Lagarde said.
She said she was encouraged by the G-20’s continued commitment to strengthening the global financial safety net, with a strong and adequately financed IMF at its centre.
“It is important that the G-20 leaders have pledged to conclude the 15th General Review of Quotas by our Spring Meetings and no later than the Annual Meetings in 2019.’’ 
Source: NAN
Central African Republic landed a windfall on Tuesday, at least on paper, when Russian state bank VTB reported it had lent the country 12 billion dollars.
However, the bank then said it was a clerical error and there was no such loan.
The loan was mentioned in a quarterly VTB financial report published by the Russian Central Bank.
The report included a table listing the outstanding financial claims that VTB group had on dozens of countries as of October 1 this year.
In the table next to the Central African Republic was the sum of 801,933,814,000 roubles (12 billion dollars) — more than six times the country’s annual economic output.
When asked about the data by media, the bank said the loan to the former French colony did not, in reality, exist.
“VTB bank has no exposure of this size to any foreign country.
”Most likely, this is a case of an operational mistake in the system when the countries were being coded,” the lender said in a statement sent to Reuters.
VTB did not say who was responsible for the mistake or how such a large figure could have been published without being spotted.
CAR government spokesman Ange Maxime Kazagui, when asked about the Russian data, said: “I don’t have that information.
”But it doesn’t sound credible because $11 billion is beyond the debt capacity of CAR.”
“We are members of the IMF (International Monetary Fund). When a member of the IMF wants to take on debt, it has to discuss that with the IMF.”
There was no indication in the data published by the Russian central bank of who was the recipient of the loan, the purpose of the loan, or when it was issued and on what terms.
CAR is a nation of five million people emerging from sectarian conflict, with a gross domestic product of 1.95 billion dollars, according to the World Bank.
Muscling aside former colonial power France, Moscow has provided arms and contractors to the Central African Republic military, and a Russian national is security advisor to President Faustin-Archange Touadera.

The International Monetary Fund (IMF) has raised its growth projection for the Sub-Saharan Africa’s economy to 3.8 percent in 2019 from 2.8 percent in 2017, implying 0.1 percentage point increase compared with its April, 2018 projection.

The fund also upgraded Nigeria’s 2019 Gross Domestic Product (GDP) by 0.4 percentage point to 2.3 percent.

The IMF disclosed this in its World Economic Outlook (WEO) Update for July 2018 titled “Less Even Expansion, Rising Trade Tensions” released on Monday.

According to the release, the upgraded forecast “reflects improved prospects for Nigeria’s economy” and supported by the rise in commodity prices.

The global monetary authority said Nigeria’s growth is expected to rise from 0.8 percent in 2017 to 2.1 percent in 2018 and 2.3 percent in 2019 on the back of an improved outlook for oil prices.

But, it left its 2019 growth prediction for South Africa unchanged at 1.7 percent, South Africa is Africa’s most-industrialized economy and hasn’t grown at more than 2 percent a year since 2013.

Nigeria and South Africa’s economies account for about half of the Africa’s GDP.

In May, the National Bureau of Statistics (NBS) released the GDP report for the first quarter of 2018 indicating that Nigeria economy grew by 1.95 percent from 2.11 percent recorded in Q4 2017.

“Despite the weaker‑than-expected first quarter outturn in South Africa, the economy is expected to recover somewhat over the remainder of 2018 and into 2019 as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the fund said.

Nigeria’s economy is recovering after it plunged into recession in 2016 after a drop in the prices of crude oil in the international market, owing to its over dependence on the oil, the country’s main source of foreign exchange earnings.


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