The International Monetary Fund (IMF) has charged the Central Bank of Nigeria (CBN) to concentrate on managing interest rates and external reserves well.
IMF Resident Representative, Mr David Moellar, gave the charge when he led an IMF delegation to a meeting with Nigeria’s Minister of Finance, Dr. Mansur Muhtar in Abuja, saying stability in the financial sector is necessary for the realization of the goals of Vision 2020.
Banks in the country presently charge between 18 percent to 22 percent interest rates, while the country’s external reserves is down to $43 billion compared to $64 billion at the third quarter of last year.
A statement from the Special Assistant on Communication to Minister of Finance, Ms Deborah Okafor, said Mr. Moellar commended Nigeria for tackling fiscal constraint and “suggested that the 2010 budget should be prepared, taking into consideration the current economic realities, especially the fluctuation in oil prices.”
She said the minister told the IMF team that “overall macro-economic outlook remains positive”. According to her, the minister also assured IMF that machinery has been set in motion to secure timely delivery of the 2010 budget.
“He informed the IMF team that the annual budget cycle consultations through the Medium Term Strategy Session (MTSS) and the Medium Term Expenditure Framework (MTEF) leading to the preparation of the budget have been concluded. The Minister said that the main fiscal challenge had been dwindling revenues and weak absorptive capacity of the MDAs in fully utilizing funds released to them for capital projects”, she said.
According to her, the minister said that government had already embarked on various measures to address the situation “including the setting up of a Cash Management Committee to prioritize government spending with special focus on the Seven-point Agenda.”