Nigeria: Staff Report for the 2002 Article IV Consultation
IMF Staff Country Reports, January 3, 2003
Source details
- Canonical URL
- Nigeria: Staff Report for the 2002 Article IV Consultation
Other formats
Bibliographic details
- Published: January 3, 2003
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451828900.002
Major findings — macroeconomic imbalances
- Major macroeconomic imbalances had emerged as a result of sharp increases in government spending.
- The overall fiscal balance deteriorated sharply in 2001.
- The external accounts worsened.
- Inflation accelerated.
- Lax financial policies have led to a sharp fall in international reserves.
Fiscal stance and public spending (2001–2002)
- The overall stance of fiscal policy remains highly expansionary in 2002, notwithstanding efforts by the authorities to contain capital spending.
- Sharp increases in government spending are identified as a principal driver of the emerging imbalances.
Price-level and exchange market risks
- The report expresses concern at the risks of a further acceleration of inflation.
- The report expresses concern at continuing instability in the exchange market.
Policy concerns and implications
- Continued expansionary fiscal policy combined with lax financial policies increase risks to macroeconomic stability.
- Worsening external accounts and falling international reserves highlight vulnerability to external shocks.
- Containing capital spending alone is insufficient given the overall expansionary fiscal stance.
Nigeria: Staff Report for the 2002 Article IV Consultation, January 3, 2003.