KEY POINTS
- Nigeria should engage the public, build trust, and reform incrementally, IMF advises.
- It requires transparent governance and reasonable social safety nets to prevent resistance.
- Employment through inclusive growth is the key for tackling economic and social vulnerabilities.
The International Monetary Fund (IMF) has told Nigeria and other Sub Saharan African countries including Ghana, Ethiopia and Kenya to reconsider their strategy for economic reforms as growing frustrations among the public and civil resistance on the streets gains more ground.
The IMF’s latest Regional Economic Outlook for Sub-Saharan Africa report identifies strategies for making reforms more acceptable and effective, calling for greater engagement with and trust among the public.
Public dissatisfaction and challenges
Macroeconomic changes like fuel and foreign exchange deregulations in countries undergoing deep reforms, like Nigeria, have led to social unrest and labor strikes because of dissatisfaction with reform.
Furthermore, this is what the IMF called adjustment fatigue, which has undermined public trust and set back the reforms.
Recommendations from the IMF for reform success
The report proposed a pathway to sustainable reform success by identifying public concerns and promoting inclusive growth. Key recommendations include:
1. Broad-Based Public Engagement: Policymakers should move from passive to participatory approaches with stakeholders and the public, in two ways, actively engaging in two‑way communication, which establishes a sense of ownership and thus support for reforms.
2. Clear Communication: Governments ought to highlight the benefits of reforms, and the risks of inaction and if there are potential social costs, present remedies. Getting out misinformation and keeping up regular progress reports are very important.
3. Strategic Reform Sequencing: Reforms should be phased in over time to avoid swamping a population, while beginning with gains that generate momentum and change that will cause the minimum disruption in social groups.
4. Complementary Measures: To reduce resistance to, and encourage acceptance of reform, social safety nets as job search assistance and retraining programs should be introduced.
5. Transparent Governance: There is need to strengthen governance frameworks, enhance transparency and control corruption in order to engender trust in the government institutions and policies.
6. Inclusive Growth: Broader reforms regarding employment, economic opportunities and social exclusion are needed in order to build sustainable growth but also to address macroeconomic vulnerabilities.
What a chance to change
That can be an opportunity for lasting support for economic reforms to emerge, the IMF said.
The report also stated that ‘reform strategies must rebuild trust in public institutions, and be partnerships with community leaders, parliamentarians, and independent researchers.’
The IMF said no amount of painful choices in current policy is worth it, unless deeper reforms are in place to ensure the long term benefits of the reforms currently in place are greater than the pain that they cause today.
Path forward
The Regional Economic Outlook is the regular update from IMF on economic challenges and opportunities in Sub-Saharan Africa. And also offers Nigeria and other countries solutions to improving reform outcomes and achieving sustainable growth.
