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‘Fiscal Discipline, Not Borrowing is What Nigeria Needs’, IMF Tells Buhari

The Managing Director of the International Monetary Fund, Christine Lagarde, on Tuesday said given the determination and resilience so far displayed by President Muhammadu Buhari and his team, Nigeria does not need any loan from her organisation.

Lagarde who is currently on a four-day visit to Nigeria said she is not in the country to negotiate loans with conditionality.

The IMF boss spoke with State House correspondents shortly after holding a closed-door meeting with Buhari; Vice President Yemi Osinbajo; and some key ministers inside the Presidential Villa, Abuja.

Others who attended the meeting included the Minister of Finance, Kemi Adeosun; Minister of Budget and National Planning, Udo Udoma; Minister of Transportation, Rotimi Amaechi; and Minister of Works, Housing and Power, Babatunde Fashola, among others.

Lagarde said although Nigeria did not need IMF loan, fiscal discipline is needed for the country to be sustainable.

She said, “Let me make it clear that I am not here (in Nigeria) nor is my team in this country to negotiate a loan with conditionality.

“We are not into programme negotiations and frankly at this point in time, given the determination and 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.”

She said the IMF believed that with clear primary ambition to support poor Nigerians, there could be added flexibility in the monetary policy, particular if oil price slumped for longer period as expected.

She said the organisation’s position was that Nigeria should not deplete its reserves simply because of rules that are extremely rigid.

According to her, she was not suggesting that rigidity be totally eliminated, but believes that some degree of flexibility would be enough.

Lagarde observed that since her last visit to Nigeria four years ago, the country had witnessed a number of changes in the areas of democracy and economy.

She noted that Nigeria had become the largest economy in Africa, the most populated and with a very attractive market.

She however regretted that things have changed in a more complicated way in the sense that the source of revenue to the government of which was predominantly oil had seen its price reduced by more than half.

She also noted that the financing cost around are beginning to rise only because the economic situation in the United States has improved and interest rates will begin to rise.

On her meeting with Buhari, Lagarde said she and her team had excellent discussions with the President and they discussed the challenges ahead stemming from oil price reduction.

 

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