Oil Slump: Buhari Meets IMF Boss, Lagarde Today

Oil Slump: Buhari Meets IMF Boss, Lagarde Today
Ms Christine Lagarde, Managing Director, International Monetary Fund

The Managing Director, International Monetary Fund, Ms Christine Lagarde, on Monday arrived Abuja on a four-day working visit and has been scheduled to meet President Muhammadu Buhari to discuss some of the challenges facing the Nigerian economy.

The Nigerian economy is currently facing fiscal and monetary challenges such as the drop in global oil price, which has impacted negatively on the country’s revenue, weak external reserves, and increased pressure on the naira in the foreign exchange market, among others.

The IMF boss arrived the country through the Presidential Wing of the Nnamdi Azikiwe International Airport aboard a private jet, with registration number ZS-PNP, at about 2:54pm.

She was received by a Federal Government delegation led by the Minister of Finance, Mrs. Kemi Adeosun, and the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele.

Largade, spotting a white shirt, with a black tuxedo suit and a pair of black and white trousers, refused to speak with journalists who had waited with the minister and the CBN governor for over two hours at the airport before her arrival.

In a statement later released on its website, the IMF said that being the largest economy in Africa, the visit would provide an opportunity to strengthen the Fund’s partnership with Nigeria.

It said apart from meeting Buhari, Lagarde would meet with other stakeholders in the economy such as the National Assembly, business leaders, prominent women and representatives of the civil society.

The statement also quoted Lagarde as saying, “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.

“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.”

According to the statement, Lagarde will also travel to Cameroon where she is expected to meet with President Paul Biya and his economic team as well as private sector executives, women leaders, and other members of the Cameroonian society.

She is also expected to meet with the Finance ministers of the six-member countries of the Economic and Monetary Community of Central Africa on January 8.

Prof. Sheriffdeen Tella of the Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said the IMF chief’s visit should not be seen as an “ordinary visit or courtesy call.”

“I think they want to convey their position with regards to the management of our economy, particularly with the devaluation (of the naira) issue they have been pursuing,” stated.

Tella, who said he supported the President’s stand on naira devaluation, said, “I believe the central bank will be ready to prove why it is not necessary for us to devalue our currency, because that’s what they (IMF) want to pursue. That’s what they do many times.

“I think the meeting is about explaining directly why there is a need for the CBN to devalue the currency. They will also make suggestions on the benefits of such a devaluation. They will make some suggestions as if they are trying to assist us, but they are not always right.”

Tella said the IMF might also raise the issue of diversification of the Nigerian economy.

He added, “But we know we have to do that, and we hope that it will work out this time round, making sure that we look at agriculture as well as the mining sectors. They will emphasise that there is a need for us to develop those sectors.

“They will talk about further privatisation of enterprises, because they continue to promote market economy even when it does not work in some economies.”

The Head, Investment Research, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said, “I think the visit will enable the government to attend to the several policy issues that we have been trying to sort out in the past months.

“The first major thing I think may be presented will be the re-negotiation of our current loans in the light of the burden that debt servicing is constituting in our budget, which is about 23 per cent of the total budget.

“They may also try to see how we can manage the shock from the oil crisis by trying to advise on how we can grow or expand our tax base. In addition, they may also raise the issue of their stand regarding this current foreign exchange issue by reiterating their stand on how this can be resolved so that we are able to attract both foreign direct and portfolio investments in 2016.”

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