Nigeria’s Minister of Finance and Coordinating Minister for Economic Affairs, Mr. Wale Edun, on Tuesday stressed the urgent need to increase oil production levels to alleviate the exchange rate challenges currently facing Nigeria.
His remarks were made at the G24 press conference at the IMF/World Bank Annual Meeting, which is currently being held in Washington, DC, USA.
This came a day after President Bola Tinubu launched “1MMBOPD”. This initiative aims to increase production by 1 million barrels per day by leveraging dormant oil assets and optimizing existing oil assets.
As of August 2024, Nigeria’s oil production is below 1.61 million barrels per day.
Mr Edun maintained that the main issue affecting Nigeria’s foreign exchange market is supply. “When it comes to Nigeria, the key issue in the foreign exchange market is really supply,” he said. “As an oil-producing country, we just need to increase our oil production. Then we will be able to address the issue of foreign exchange supply and pressure on foreign exchange whenever there is a large financial flow.”
Mr Edun acknowledged the approach of the Central Bank of Nigeria (CBN) to maintain tight monetary policy as high inflation rates affect Nigeria. “With high inflation, the governor of the Central Bank of Nigeria continues to tighten monetary policy and that is the norm today,” he said.
In highlighting key lessons learned from Nigeria’s ongoing structural reforms, Mr. Edun noted the importance of focusing on the broader framework applicable not only to Nigeria but to developing countries.
“A requirement for support from the international community and development partners is to address reforms that lead to macro-level sustainability,” he said.
He emphasized the need to embed strong social safety nets to support vulnerable populations facing the immediate impact of rising costs of living. “The benefits of these programs are often long-term, but the costs are incurred upfront,” he explained, stressing the importance of planning poverty alleviation efforts.
“Communication is key to implementing these macroeconomic reforms,” Edun continued. “It’s important to communicate what is being done, what is expected, and the timing of various activities. This transparency builds public trust.”
He suggested that the government establish a dashboard to track and publicize the progress of direct payments and transfers of funds to people in need.
G24 First Vice Chairman and Philippine Treasury Secretary Ralph Recto said that although inflation is easing, rising geopolitical tensions remain a threat to commodity prices and interest rates. “This situation jeopardizes capital flows, fiscal stability and the survival of the economy,” Recto said. He warned that a global economic slowdown due to these tensions would disproportionately impact developing countries.
He underlined the need for the international community to prioritize sustainable and inclusive development by 2030, stressing that this goal is still achievable through concerted international cooperation.
“We continue to call for a more agile and determined IMF and World Bank,” he said. “To overcome these challenges, we need to strengthen development cooperation, expand support and innovate solutions.”
Mr. Recto highlighted the 80th anniversary of the Bretton Woods system and pointed out the need to critically assess its adaptability to a rapidly changing global environment. He outlined four key reforms that the G24 has identified to increase the effectiveness of the system and enable both the IMF and the World Bank to better serve member countries.
“First, the IMF needs to create new mechanisms to support countries with sound fundamentals during liquidity crises,” he said. “Second, to end poverty on a livable planet, the World Bank needs to set more ambitious targets for concessional and non-concessional windows.”
He also called for reform of the sovereign debt resolution framework to provide comprehensive and impactful debt relief for fragile economies, and the importance of accelerating governance reforms to increase developing country representation in these institutions. emphasized. “Without these bold actions, decades of progress in eradicating poverty and inequality will be halted or reversed,” Recto warned.
Additionally, Iyabo Masha of the G-24 Secretariat expressed concern about the rise of protectionist policies globally and its negative impact on sectors essential for growth and development. . “What we want is for the World Trade Organization (WTO) to become the center of trade talks and negotiations,” Marcia said. He called on the IMF and World Bank to engage more multilaterally to positively influence national policies.
