How Nigeria, other African economies can Adapt to US-China tariff

On Thursday, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, advised Nigeria and other African countries to strengthen their fundamentals to withstand the shocks and tensions of the US tariff war with other economies of the world, especially China.

Ms Georgieva noted that for oil producers like Nigeria, a lot can still be done on the fiscal side to have strength amid heightened global uncertainty and falling oil prices.

The IMF boss made the call in her Managing Director’s Global Policy Agenda at the ongoing Spring Meetings of the World Bank and IMF in Washington.

Speaking specifically to Nigeria’s budgetary concerns amid tariff tension, low oil prices, and global uncertainty, she explained that Nigeria faces a peculiar problem that is different from those of other economies.

“For the oil producers like Nigeria, falling oil prices creates additional pressure on their budgets. On the other hand, for the oil importers, this is a breath of fresh air,” she said.

“In other words, as you indicated in your question, different countries face different challenges. If I were to come with some basic recommendations that apply to Africa, I would say—and actually they apply to Nigeria, they apply to Egypt, they apply to Ghana, they apply to Coté d’Ivoire.
“First, continue on a path of strengthening your fundamentals. There is still a lot that can be done on the fiscal side to have strength. As I was talking about ASEAN, to have buffers for a moment of shock. And do not use any excuses, oh, it is difficult, we cannot really go for more tax because, yes, you can. There is a lot that can be done to broaden the tax base and a lot that can be done to reduce tax evasion and tax avoidance.”

Oil prices plummeted in the international market in recent weeks amid global uncertainty and tension within the oil-producing cartel, OPEC. Brent crude fell by more than 2% as markets measured the possibility of a faster production increase, hovering around $66 a barrel.

With its budgetary provisions pegged at a crude oil benchmark of $75 per barrel, there have been concerns about the threats that low crude oil prices and revenues constitute for the nation’s economy.

Source: premiumtimes.com

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