The International Monetary Fund has urged Nigeria to lift the remaining restrictions on foreign exchange and discard the current multiple exchange rate systems in use so as to revive the country’s economy.

“Our directors urged the authorities to remove the remaining restrictions and multiple currency practices, thus unifying the foreign exchange market and helping regain investor confidence,” it said

Nigeria uses five exchange rates. These rates include the official one, a rate for Muslim pilgrims travelling to Saudi Arabia, one for school fees abroad and a retail rate fixed by licensed exchange bureaus.

Last year, Nigeria’s economy entered its first recession in 25 years, largely driven by the sharp drop in oil prices paired with attacks by militants on energy facilities in the Niger Delta oil region. Crude sales account for over 90% of foreign exchange earnings and most of the government revenues.

The Federal Government had rejected the devaluation of the naira and had supported restrictions imposed by the CBN. With these restrictions, companies had no choice than to pay additional charges on the rate available on the black market when purchasing dollars needed for imports. On the black market, the currency trades around 30% weaker than the official exchange rate.

IMF earlier this year predicted that Nigeria's economy would grow by 0.8%

Anita Fatunji