IMF urges Nigeria, other sub-Saharan countries to increase taxes for improved spending

*The International Monetary Fund has advised countries in sub-Saharan Africa to do more internally in order to increase tax revenues, enhance quality of expenditure, and enjoy more support in improving governance, transparency, and accountability to citizens

Isola Moses | ConsumerConnect

As part of the strategies to reform its concessional lending programme to Africa, the International Monetary Fund (IMF) has advised countries in sub-Saharan Africa, including Nigeria, to do more internally in order to increase tax revenues and enhance the quality of spending.

ConsumerConnect gathered Ms. Kristalina Georgieva, Managing Director of IMF, said the global lender has advocated debt service suspension, and that has provided up to now, some $7 billion to low-income countries in the region.

President Muhammadu Buhari, GCFR

Ms. Georgieva made this known in Washington D.C., United States (US), Wednesday, April 7 at the IMF/World Bank Spring Meetings news conference.

The IMF Chief stated: “A big chunk of this is for sub-Saharan Africa. We have provided debt relief to our most vulnerable members, so sub-Saharan African countries that fall in this category benefited from it.”

She assured that the region would enjoy the IMF support in improving governance, transparency, and accountability to their citizens.

According to the Managing Director of IMF, the global lender in 2020, increased 13 times the financing, especially on an emergency basis to the African continent.

“We are looking for ways to reform our concessional lending programme, the Poverty Reduction and Growth Trust.

“So we can do more concessional financing on a larger scale for longer, especially in sub-Saharan Africa,” said Ms. Georgieva.

According to her, the IMF now has big support from the G‑20 group of nations, and it is optimistic it would get a new SDR allocation that would be a welcome injection for sub-Saharan African countries with depleted buffers.

Nevertheless, she urged wealthier members who might not need an injection of reserves to lend through it on highly concessional terms funding that could go to countries that needed it.

Ms. Georgieva further disclosed that on the global front, economic fortunes were diverging dangerously.

A small number of advanced and emerging market economies, led by the US and China, are powering ahead, she noted.

The Managing Director added that weaker and poorer countries are falling behind in this multi-speed recovery.

She stated: “We also face extremely high uncertainty, especially over the impact of new virus strains and potential shifts in financial conditions.

“There is the risk of further economic scarring from job losses, learning losses, bankruptcies, extreme poverty, and hunger.

“Policymakers must take the right actions now by giving everyone a fair shot, not just into people’s arms, but also in people’s lives and in vulnerable economies.

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