Economist Warns FG Against World Bank, IMF

Posted by African Examiner Latest Headlines, World News Saturday, October 26th, 2024

(AFRICAN EXAMINER) – The Chief Economist at SPM Professionals, Paul Alaje, on Friday called on the Federal Government to be careful with advice given by global financial institutions like the World Bank and the International Monetary Fund (IMF).

“The elephant in the room is the exchange rate. All the gains this administration has made, that is, if Naira increases to 2,000, it will wipe off everything. That is why we need to be extremely careful and not to listen to the sweetness of what some institutions are telling us,” he said.

Alaje’s warning comes amid several advisories issued by the institutions for the Nigerian government and other countries to adopt different policies to put their economy in the right direction.

On Tuesday, the IMF urged countries facing high inflation, including Nigeria, to adopt tighter monetary policies to stabilise their economies.

IMF’s economic counsellor and director of Research, Pierre-Olivier Gourinchas, stated this in Washington during a press conference unveiling the World Economic Outlook (WEO) at the ongoing IMF/World Bank annual meetings.

Gourinchas stressed the importance of balancing monetary and fiscal policies to address inflation and debt challenges in affected regions.

The IMF highlighted Sub-Saharan Africa as a region of particular concern. According to the WEO report, the region’s economic growth rate is expected to remain steady at 3.6 percent this year, with projections showing a modest rise to 4.2 percent next year. Despite these improvements, the economic landscape remains challenging due to weather-related shocks and conflicts.

“In countries where inflation is very high, we recommend a tight monetary policy stance. In some cases, when possible, fiscal consolidation can help, though this is complicated by trade-offs many nations face,” he said.

“Growth in the region is subdued and uneven,” Gourinchas noted. “Weather shocks and conflict have affected several countries, and inflation, although stabilising in some places, still poses significant challenges.”

He pointed out that while some nations are seeing inflation decline and approach target levels, about one-third of the countries in the region continue to struggle with double-digit inflation.