The IMF has urged Nigeria to sign the Africa Continental Free Trade Area Agreement noting that when completed, the trade deal would establish a market of 1.2 billion people with a combined GDP of $2.5tn.
The Director, African Department at the IMF, Abebe Selassie , in an interview with Nigerian journalists after presenting the regional economic outlook on the sub-Saharan Africa at the ongoing joint annual spring meetings with the World Bank in Washington DC, explained that President Muhammadu Buhari has yet to sign the AfCTA, saying the country could not afford to go back to the days of signing agreements without understanding and planning for the consequences of such actions.
Selassie said, “From our perspective, we think that the AfCTA will help the region integrate; it’s been the dream of our leaders dating back to independence days and we think that it’s a very important initiative and beyond politics, it will have a positive impact economically.
“Like all trade agreements, like all integration measures, there can be adverse effects but these can be identified and policies are introduced to address those. We have to look at the big picture. Coming to Nigeria specifically, we think that Nigeria will also benefit as the largest economy from joining the AfCTA and being a full participant of that. In my view, looking at how dynamic Nigeria is and looking at the business people Nigeria has, the wealth of talent and entrepreneurs that it has, I don’t think you have to fear anybody else in terms of competition.”
The Managing Director of IMF, Christine Lagarde, had on Thursday called on the Federal Government to remove fuel subsidy, saying it was the right thing to do.
According to the IMF 2019 Article IV Consultation on Nigeria, phasing out implicit fuel subsidies while strengthening social safety nets to mitigate the impact on the most vulnerable will help reduce the poverty gap and free up additional fiscal space in Nigeria.
Selassie, who reiterated the same position, noted that removing subsidy was important because the lion share of the benefit of the subsidy went to the rich people.