The International Monetary Fund (IMF) on Wednesday endorsed the Economic Recovery Growth Plan (ERGP) 2017- 2020, recently launched by the President Muhammadu Buhari led government, commending it, saying this is “how fiscal policy should be thought in developing countries.”
The position of the IMF was conveyed by the Fund’s Director, Fiscal Affairs Department, Mr. Vitor Gaspar, while responding to a question from THISDAY, during a media briefing on the IMF Fiscal Monitor press conference at the ongoing IMF/World Bank Spring meetings in Washington DC.
The IMF official also lauded the federal government for embracing the fiscal policies in general and tax policy in particular as part of its strategy for development.
Lending voice on the development, IMF’s Assistant Director/Head, Fiscal Policy and Surveillance, Catherine Pattillo, welcomed the country’s ERGP, saying its focus on diversification and attention to some of the problems facing the economy were steps in the right direction.
His words: “We very much welcome the ERGP. As you are aware, Nigeria went into recession last year, there have been forecasted recovery, but still very fragile this year and the need to address the fiscal situation is urgent. Our recommendation is for the continued fiscal consolidation.
“One striking statistics I think is the fact that over the past years, the ratio of interest payment to tax revenue has doubled to 66 per cent in Nigeria. So, two-thirds of all tax revenue is going into interest payment, illustrating the need to raise tax revenue. That would allow the government to implement the social and growth-friendly policies that are part of the objectives of the ERGP.”
President Buhari had launched the ERGP 2017-2020, a fortnight ago.
The Medium-Term plan has among its broad strategic objectives, the restoration of sustainable, accelerated and inclusive growth and development; investing in the people and building a globally competitive economy.