Managing Director of International Monetary Fund (IMF) Christine Lagarde who visited Nigeria recently said the visit was not to negotiate IMF loans.
Lagarde’s clarification becomes necessary amid public cynicisms and apprehensions over the real purpose of her visit to Nigeria.
The clarification is also fundamental to understanding the statement of President Muhammadu Buhari while presenting the 2016 Appropriation Bill before the National Assembly that Nigeria would borrow N1.84 trillion to bridge the deficit in the N6.08 trillion 2016 Federal Budget.
To allay any concern, Lagarde explained that rather than negotiate loans, her visit was to promote physical discipline and favourable monetary policies in Nigeria.
Throwing more light on the real purpose of her visit while fielding questions from State House correspondents, Lagarde said she had an “excellent discussion’’ with Buhari on the challenges facing Nigeria occasioned by the drastic fall in global oil price index.
She said that the discussions with Buhari centred on the challenges arising from dwindling crude oil prices in the international market and other constraints.
“We discussed the challenges ahead stemming from oil price reduction; the necessity to apply fiscal discipline and the need to respond to the population needs while addressing the medium term specificities of improving the competitiveness of Nigeria,’’ she said.
Lagarde said a team of IMF economists would arrive in Nigeria soon to follow up on her visit towards addressing the challenges that Nigeria could face.
“Let me make it clear that I am not here nor is my team in this country to negotiate a loan with conditionalities.
“We are not into programme negotiations and frankly at this point in time, given the determination, resilience displayed by the president and his team, I don’t see why an IMF programme will be needed.
“So, of course, discipline is going to be needed and implementation is going to be key for the objectives and the ambitions to serve the country well for it to be actually sustainable,’’ she noted.
Debunking insinuations that IMF programmes are always anti-people, Lagarde described such view as outdated, saying IMF programmes were in favour of the less-privileged members of the society.
She said that the IMF policies and programmes were not meant to impoverish poorer member- countries but rather to assist them with quality policy advice, technical assistance and capacity building.
According to her, more than 150 out of the 188 member- countries of the IMF have so far benefited from the institution’s technical assistance and capacity building.
“We give policy advice to our members and it is our duty and accountability to them to review their economy every year to give them report about their economy.
“We don’t push them, we don’t do things necessarily to please them; we say things as we see them.
“The second activity is technical assistance and capacity building. It gives us pride to see that about 150 countries have had the benefit of technical assistance and capacity building,’’ she said.
Pledging more technical assistance and capacity building for Nigeria, Lagarde stressed the need for Nigeria to develop a strong tax department, efficient debt management and customs authority to achieve a strong economy for the country.
She commended the determination of Buhari’s administration to fight corrupt practices and to bring about transparency and accountability at all levels of the economy.
She said that the IMF would be willing to assist the Federal Government to stop revenue leakages, trace stolen funds and restructure its tax system.
According to her, Nigeria has the potential to overcome the current economic challenge of falling commodity prices without resorting to the IMF for financial support.
In his response, Buhari affirmed that his administration would look inwards, enforce regulations to stop financial leakages and adopt global best practices in generating more revenue to mitigate the effect of dwindling oil prices on the Nigerian economy.
In a statement at the end of a close-door meeting, Buhari was quoted as promising to enforce greater discipline, probity and accountability in all revenue generating agencies of the Federal Government.
“We have just come out of budget discussions after many weeks of taking into consideration the many needs of the country and the down turn of the economy with falling oil prices and the negative economic forecasts,’’ he noted.
Throwing more lights on the administration’s economic policies, the president said that he had also directed all the Ministries, Departments and Agencies to cut down on their overhead costs.
He said the Federal Government would welcome the technical support and expertise of the IMF for its plans to diversify the Nigerian economy and further unleash its growth potential.
After the meeting, Mr Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), said that Lagarde supported the apex bank’s efforts at stabilising the Nigerian economy.
“She (Lagarde) also tried to encourage our Nigerian banks to continue to support the real sector and the small scale enterprises in Nigeria.
He quoted her as saying that the banks should try as much as possible to do those lending activities at a very concessionary pricing.
To round off her visit, Lagarde, accompanied by management staff of the CBN and Ministry of Finance, visited Mother Theresa’s Children’s home in the FCT where she donated 7,500 dollars to the orphanage.
“This is my second visit to Nigeria as head of the IMF and every occasion I have privately visited presidents, members of governments, governor of central bank and legislators.
“The future of Nigeria is bigger than its past but the future is to invest in youth education and that future is to ensure that no child is left behind.
So, please keep doing what you are doing and we at the IMF care about the youth and care about those who are left beside the road.
“It is as a result of this that I am, on behalf of the IMF, making this donation of 7,500 dollars and that translates to about N1.5 million,’’ she said.
The benefits of the visit notwithstanding, economic analysts caution Nigeria against wholesale application of the IMF prescriptions in view of the previous experience associated with the introduction of the Structural Adjustment Programme in 1986.
News Agency of Nigeria, NAN