Abuja — The International Monetary Fund (IMF) is expecting Nigeria's foreign reserves to increase to about $80 billion in the next four years. IMF Senior Resident Representative, Mr. Scott Rogers, said its projection was based on expectations that export diversification and continued capital in-flows would be sustained because of improvement in the country's investment climate.
Noting that export diversification was critical to long-term growth, it added that interest rate spread would also remain for a few more years.
Speaking to journalists in Abuja during a briefing to present highlights of the Staff Report on the 2012 Article IV Consultation, which is expected to be published soon, he said the IMF was in support of the agitation for complete removal of fuel subsidy.
The Fund also recommended that the current tight monetary policy be maintained until signs of durable reduction of inflationary pressure are achieved.
He said: " The principle factor is that oil prices would be coming down on a very high level, so you have that starting point. Meanwhile oil exports now are about a $100 billion a year. So that would fall a little bit. What that means is that your balance of payment surplus would be getting smaller but it's still going to be positive and that's how you build reserves."
On its recommendation for the removal of fuel subsidy amid its social implication, the IMF country representative said the Fund believed it was the right step in the right direction