Says she is not in Nigeria to negotiate loan
Notes with right policies, Nigeria has no reason to borrow
Backs Buhari’s fight against corruption
Ministers’ll give account of funds —Buhari
ABUJA — There were indications that
the 2016 Appropriation Bill may be subjected to further scrutiny and
amendments by the International Monetary Fund, IMF, despite being
already presented to the National Assembly for legislative action.
Managing Director of IMF, Ms Christine Lagarde, who is visiting
Nigeria, told newsmen in Abuja, yesterday, that the multilateral
financial institution would be discussing the budget next week with
Nigerian officials.
Lagarde responding to question on the 2016 budget said: “A team of
economists is going to come here (Nigeria) next week to review and audit
(the bill) and have a good discussion with the government authorities
to really assess whether the financing is in place, whether the debt is
sustainable, whether the borrowing costs are sensible and what strategy
must be put in place in order to address challenges going forward.”
The IMF boss, who held meetings with the Central Bank of Nigeria,
CBN; Finance Minister, Mrs. Kemi Adeosun, as well as a closed door
sessions with President Muhammadu Buhari and Vice President Yemi
Osinbajo, had refused to comment directly on the content of the 2016
Appropriation Bill because there are procedures at the IMF that must be
followed.
She noted that she will continue to have discussions with Nigeria’s
Finance Minister and CBN Governor on issues of fiscal discipline,
financing, monetary policies and the degree of flexibility, because
despite “Nigeria being a vibrant and large economy still has to deal
with a lot of poor people with a lot of inequality. Those two components
should certainly always be the drivers of reforms, whether it is
looking at subsidies, how they are structured and how they can be faced
out.”
Don’t strangulate poor Nigerians
Following the dwindling oil prices that have apparently affected the
national income of most countries, the IMF boss warned the Federal
Government not to strangulate poor Nigerians with rigid economic
policies.
She also stated that it was concerned by the condition of teeming
population of poor Nigerians who would be affected by the rigidity of
policies, stressing the need to inject fiscal discipline in the policy
formulations.
According to Lagarde, her mission to Nigeria was not connected to the
negotiations of any loan with any kind of conditionalities but to have
discussion on the economic reforms and objectives of the present
government.
A lot has changed in Nigeria
President Muhammadu Buhari receiving IMF Managing Director, Christine Lagarde in Abuja.
Recalling the tremendous progress Nigeria has made in its democratic
process, Lagarde said a lot had changed in the country since she last
visited four years ago.
She said: “I was in Nigeria four years ago and in four years, many
things have changed. That has been the topic of our discussions with
President Buhari and his team. Looking back four years ago, massive
democratic change has occurred in this country peacefully. Nigeria has
become the largest economy in Africa, certainly the most populated and
with a very attractive market.
“But things have changed in a more complicated way in the sense that
the source of revenue to the government of Nigeria which was
predominantly oil has seen its price divided by more than half and the
financing cost around are beginning to rise if only because the economic
situation in the United States has improved and interest rates will
begin to rise. Added to which emerging countries economies are
decelerating their growth.
Not here to negotiate loan
“First, let me make it clear that I’m 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, of course, implementation is going to be key for
the objectives and the ambitions to serve the country well, in order
for it to be actually sustainable.
“We believe that with very clear primary ambition to support the poor
people of Nigeria, there could be added flexibility in the monetary
policy, particularly if as we think, the price of oil is likely to be
possibly low for longer, because clearly the authorities should not
deplete the reserves of the country, simply because of rules that will
be exceedingly rigid. I’m not suggesting that but that rigidity be
totally removed but some degree of flexibility will be enough.
“We have excellent discussions with Buhari and we discussed the
challenges ahead stemming from oil price reduction. The necessity to
apply fiscal discipline and the need to also respond to the population
needs while addressing the Medium Term specifics of improving the
competitiveness of Nigeria and yet also focusing on the short term
fiscal situation which requires that revenue sources be identified in
order to compensate the shortfall resulting from oil price decline.
“Oil is not the major contributor to the Nigerian GDP, it is only
about 40 per cent but it is a big source of revenue for the government.
To discuss budget next week
“We discussed with the President, Vice President and the Minister of
Finance and Minister of Budget how more efficiency, more transparency,
better accountability, enlarging the base of revenue could actually
contribute to sound budget going forward.
“It is not for me here and now to actually approve or comment on the
budget because we have procedures in the IMF under which a team of
economists is going to come next week actually to do what we call the
Article 4 which is to review….good discussion with partners, IMF on one
hand, country’s authorities on the other hand to really access whether
financing is in place, whether the debt is sustainable, whether the
borrowing cost are sensible and what strategy put in place in order to
address challenges going forward.
On war against corruption
“But what I certainly mentioned to Mr. President was that his fight
and his determination to fight corruption and his determination to bring
about transparency and accountability at all levels of the economy are
very important agenda item and very ambitious goal that needed to be
deliberated upon which he, himself is definitely committed to as he
indicated this morning and as he inspires his team members.
“With that I am going to have more discussions with the finance
minister, with Governor of Central Bank. We will be discussing issue of
fiscal discipline, financing monetary policies and the degree of
flexibility, all that with the fact that Nigeria with a vibrant large
economy still has to deal with poor people, a lot of inequality and
those two components should certainly be the drivers of reforms, whether
it is looking at subsidies and how they are structured and how they can
be phased out, whether it is monetary policy and the flexibility needed
and knowing what effect it has on the poor, all, of those are ambitions
that we could quickly recognize and support.”
IMF backs Buhari’s war against corruption
The IMF MD, who was flanked by the Minister of Finance, Mrs Kemi
Adeosun, at the beefing also lauded the anti-corruption fight of
President Buhari, saying that the course would engender the needed
transparency and accountability in the financial system of the country.
“But what I certainly mentioned to Mr. President was that his fight
and his determination to fight corruption and his determination to bring
about transparency and accountability at all levels of the economy are
very important agenda item and very ambitious goal that needed to be
deliberated upon which he, himself is definitely committed to as he
indicated this morning and as he inspires his team members,” she said.
Ministers’ll give accounts of funds —Buhari
Meanwhile, President Buhari has said that his ministers will render
accurate account of every kobo they spent in their respective
ministries.
He also said that his administration will 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.
The president, who gave the assurance when he received the IMF boss
at the Presidential Villa said that his administration will enforce
greater discipline, probity and accountability in all revenue
generating agencies of the Federal Government.
He said: “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.
“We are working very hard and with the budget as our way forward, we
will do our best to ensure that our country survives the current
economic downturn.
“We have also told all heads of Ministries, Departments and Agencies
of government that on our watch, they will fully account for all funds
that get into their coffers.”
Culled from Vanguard
