UPDATE 1-IMF cuts Nigeria growth forecast again amid oil slump

(Adds details from statement, World Bank spokesman)

By David Lawder

The International Monetary
Fund (IMF) said on Thursday that it has again cut its growth
forecast for Nigeria as the oil exporter faces “substantial
challenges” from low crude prices.

In its annual review of Nigeria’s economic situation, the
IMF said that gross domestic product growth would slow to 2.3
percent in 2016 from an estimated 2.7 percent in 2015. In
February, after IMF officials visited the country, the Fund had
forecast 3.2 percent growth for Nigeria in 2016.

“Key risks to the outlook include lower oil prices,
shortfalls in non-oil revenues, a further deterioration in
finances of state and local Governments, deepening disruptions
in private sector activity due to constraints on access to
foreign exchange, and resurgence in security concerns,” the IMF
said in a statement.

It added that Nigeria’s general government deficit would
grow further after doubling to 3.7 percent of GDP in 2015.

The IMF executive board said Nigeria needed to urgently
implement policies to safeguard fiscal sustainability, reduce
external imbalances and advance structural reforms that promote
more inclusive growth.

“Directors emphasized the critical need to raise non-oil
revenues to ensure fiscal sustainability while maintaining
infrastructure and social spending,” the IMF said. “They urged a
gradual increase in the VAT rate, further improvements in
revenue administration, and a broadening of the tax base.”

Discussions between Nigeria and the World Bank are
continuing on a possible loan or credit facility that is tied to
policy reforms in the West African oil exporter, a spokesman for
the Washington-based multilateral lender said on Thursday.

(Reporting By David Lawder; Editing by Alistair Bell and Sandra
Maler)

The article UPDATE 1-IMF cuts Nigeria growth forecast again amid oil slump was originally published at Reuters - US Energy.