The International Monetary Fund says Nigeria’s economy needs urgent reform.

In a report, the fund highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market.

The document, outlined a list of failings in the Federal Government’s handling of the economy, warning that the country should lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates.

Meanwhile the banking industry’s non-performing loans ratio rose from N1.678bn in June to N2.084tn in December 2016.

That's according to the latest Central Bank of Nigeria’s financial system stability report released on Wednesday.

According to the report, the indicators used to appraise the stability of the financial system included asset quality, capital and income-expense.

The CBN also conducted routine and special examinations of foreign exchange activities of banks where a number of infractions were discovered.