Nigeria doesn’t need loans to survive – IMF boss

Nigeria doesn’t need loans to survive – IMF boss
January 05 20:00 2016

The Managing Director of International Monetary Fund (IMF), Ms Christine Lagarde said Tuesday in Abuja that Nigeria does not need its loans to survive despite the current economic situation in the country occasioned by dwindling price of crude oil at the international market

Speaking to State House correspondents after a meeting with President Muhammadu Buhari, Lagarde said the IMF has no intention of negotiating any new loan programme with Nigeria.

“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.

“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 boss said the federal government should not be rigid in its policy so as not to further impoverish the common man in the country.

“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 rigidity be totally removed but some degree of flexility will be enough,” she said.

She said IMF’s team of financial experts would be in the country to meet with the Finance Minister on the 2016 budget proposal with a view to ascertaining its implementation.

Lagarde also spoke on the specific things she discussed with the President, saying they had excellent discussions on “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 specificities 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.”

Reacting to comments that judging from the country’s past experience, IMF programmes have never been pro-poor, Lagarde said:

“Certainly, the last four and a half years, since I have been Managing Director of this institution, this is not the recipes we adopted and this is certainly not the feedback I have received from the countries that we have worked with.

“I just want to point out that we are majorly involved in three kinds of activities. The first one which is the most traditional one is under which we give policy advice to our members, we have currently 188 countries that are under this institution 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 which is the fastest growing one in the institution is technical assistance and capacity building, and there is plenty of that is available to all the countries of the world. It gives us pride to see that about 150 countries have had the benefit of technical assistance and capacity building.

“The third activity is the lending that we provide because nobody else is ready to provide lending for the country. When the balance is in a very bad situation and when there are no finances available, at that point in time in order to pull the country out of the very difficult situation it is in, we come in and we lend. But we do that because it is the entire international community’s monies. It is not my money, it is the international community’s money and we do so with the right guarantees stepping into international community bonds, which is that the economy is going to be improved, that fiscal discipline is going to be brought in, that corruption is going to be punished. We don’t do as much now as we did four years ago because the situation has improved. As I said earlier on I am not here to negotiate a programme, at all.”