The International Monetary Fund, IMF has called for further depreciation of the naira and the currencies of seven oil exporting countries in West Africa due to the fall in international oil price.
The naira has depreciated officially by 28 percent from N155 to a dollar November last year to N197 at the close of business yesterday IMF in its April 2015 Regional Economic Outlook for Sub-Saharan Africa, which put the economic growth at 4.5 percent for the region in 2015, said, “For the region’s eight oil exporting countries, fiscal adjustment is a priority; policy makers should support an adjustment by allowing exchange rates to depreciate, where flexible exchange rate mechanisms are in place.”
The Director of the IMF’s African Department, Ms Antoineete Sayeh, in a press statement explained that “Sub-Saharan Africa’s economy is set to register another year of solid economic performance with growth expected to expand 4½ percent in 2015. The region will continue being one of the fastest growing in the world—second only to emerging and developing Asia.
“That said, the economic expansion will be at the lower end of the range experienced in recent years, mainly reflecting the impact of the sharp decline of oil and commodity prices over the last six months. But the impact of this shock will be highly differentiated across the region.
“Sub-Saharan Africa’s eight oil exporters have been hard hit by the price decline, and their average growth in 2015 is expected to be about 1¼ percentage points lower than in 2014 in response to this shock.
”However, for most of the rest of the region, growth prospects remain favorable. These countries are enjoying the benefits of lower oil import bills, although some are also feeling the impact of lower prices for their non-oil commodity exports. Growth is projected to be particularly strong in most low-income and more fragile countries, and this will help to reduce poverty levels.”
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