No IMF Programme Needed For Nigeria, Says Lagarde

IMF Managing Director Christine Lagarde flanked by Kemi Adeosun, Minister of Finance (L) and Godwin Emefiele, CBN Governor (R). Image source: Breaking Times)

Africa’s biggest economy Nigeria, battling a revenue shortfall caused by the global oil shock, does not need assistance from the International Monetary Fund, the group’s head said on Tuesday.  “Let me be very clear: I’m not here nor is my team here to negotiate a loan with conditionalities, we’re not programming negotiations,” said IMF Managing Director Christine Lagarde.

Vanguard report continues:

“Frankly, given the determination and resilience displayed by the presidency and his team, I don’t see why an IMF programme is going to be needed,” she told reporters in Abuja.

Lagarde was speaking after meeting President Muhammadu Buhari on a four-day visit that will also see her hold talks with the central bank governor and business leaders.

Nigeria, Africa’s number one oil producer, has seen revenues dive over the last year because of the fall in global crude prices, causing a cash crunch that has forced it to tighten spending.

The naira currency has also slumped and GDP growth stalled to under 3.0 percent, while inflation is nudging 10 percent.

Lagarde described the talks as “excellent” and said they touched on “the challenges ahead stemming from the oil price reduction” and the need to find different revenue sources.

They also discussed “the necessity to apply fiscal discipline and the need to respond to the population’s needs, improving the competitiveness of Nigeria and focusing on the short-term fiscal situation”.

Buhari has made reviving the flagging economy one of his key priorities alongside cutting endemic corruption and government waste, and improving transparency and accountability.

Lagarde said they were “very ambitious goals that need to be delivered upon”.

Nigeria last month unveiled a 6.08-trillion-naira (about US$30-billion, 27-billion-euro) budget, increasing investment on capital expenditure to stimulate growth and lower dependence on crude.

Lagarde said it was not her place to “approve or comment on the budget”.

But she disclosed the IMF would undertake a review and audit from next week “to really assess whether the financing is in place”.

It would also look at “whether the debt is sustainable, borrowing costs are sensible and what must be put in place in order to address the challenges going forward”.

Nigeria In IMF Talks As It Deals With Large Budget Deficit

Nigeria's President Muhammadu Buhari is holding talks with International Monetary Fund chief Christine Lagarde as the government looks to fund an US$11bn (£7.5bn) budget deficit.

The country is facing a cash shortage because of the plunging oil price - one of the main sources of government revenue.

Mr Buhari is hoping to fund half the budget deficit through money from international lenders, reports the BBC's Bashir Sa'ad Abdullahi in Abuja. 

IMF MD Arrives, To Hold Talks With Buhari

Vanguard reports that Managing Director of the International Monetary Fund, IMF, Ms. Christine Lagarde, arrived Nigeria, yesterday, on a four-day official visit to engage with policy makers and other stakeholders on how her organisation can partner the nation for a better economy.

She arrived the presidential wing of the Nnamdi Azikiwe International Airport aboard a private plane at about 3pm, where she was received by Minister of Finance, Mrs Kemi Adeosun, and the Governor of the Central Bank of Nigeria, CBN, Mr. Godwin Emefiele.

Although she did not speak to journalists, her organisation said “the visit to Nigeria will provide an opportunity to strengthen the fund’s partnership with the largest economy in sub-Saharan Africa.”

While in Abuja, Ms. Lagarde will meet with President Muhammadu Buhari and other senior leaders as well as business leaders, prominent women, and representatives of civil society. She will also meet with legislators.

“I look forward to productive meetings with President Buhari and his colleagues as they address important economic challenges, most importantly the impact of low oil prices,” Ms. Lagarde was quoted as having said in preparation for the visit which will end on Thursday, January 7.

According to her, “Nigeria is working hard to improve its business environment, promote opportunities for growth in the private sector, and strengthen social cohesion, all areas where the government has an important role to play.”

Ms. Lagarde, who is on a two-nation tour will leave Nigeria for Cameroon, where she will also meet President Paul Biya, Cameroonian economic policy makers, private sector executives, women leaders, and members of Civil Society Organizations.

The Nigeria Labour Congress, NLC, had last week accused the President Buhari administration of playing the IMF script by removing subsidy on petroleum products and warned that it would resist any attempt to increase prices of the products through the back door.

Last year, the IMF had advised the Buhari administration to remove the fuel subsidy. The call was made by the IMF Director African Department, Ms. Antoinette Sayeh, while fielding questions  at the Africa Region press conference during the  2015 Spring Meetings of the World Bank and the IMF.

The IMF Director said: “This is the time the Nigerian government has to deal with the subsidy issue – now that the prices of oil have fallen because when prices rise it would be very difficult to remove subsidies.”

“But to achieve this, the government actually has to make sure and convince the people that the savings in subsidy would be used to improve the lives of the citizens. This is what they need to do to make it politically feasible to remove fuel subsidy.”