Nigeria and other Sub-Saharan African nations have been urged by the International Monetary Fund (IMF) , to cut their fiscal deficits by 3% in order to prevent financial problems.
This information was provided on Tuesday by IMF economist Fabio Cormelli in a study.
The change occurs as Nigeria’s fiscal deficit to Gross Domestic Product, or GDP, ratio drops from 6.3% in 2021 to 5% in 2022.
The IMF suggested that as a remedy, Nigeria and other Sub-Saharan nations should chart a course by re-anchoring fiscal policy through a credible medium-term strategy and get ready by carrying out fiscal adjustment to reduce debt to a level that is safe.
“IMF staff analysis shows that most countries in the region must reduce their fiscal deficits in the coming years. The average country’s adjustment amount is about 2 to 3 per cent of GDP.
“This adjustment seems feasible given historical experience—in the past, countries in sub-Saharan African countries improved their primary balance by 1 per cent of GDP a year over two to three years,” Cormelli said.