President Muhammadu Buhari has said his administration will 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. He stated this on Tuesday at the Presidential Villa in Abuja when he received the Managing Director of the International Monetary Fund (IMF), Ms Christine Lagarde, who said that given the zeal and determination she had seen in the Buhari administration, the country did not need any IMF programme but advised Nigeria to be more flexible in its monetary policies. Lagarde is on a working visit to Nigeria ahead of the scheduled visit by the Fund’s experts to examine the country’s economic progress. President Buhari said that his administration would also 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. “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,” President Buhari told Ms Lagarde. According to him, the Federal Government was reviewing its operational costs and had directed all the Ministries, Departments and Agencies to cut down on their overhead costs. President Buhari said the Federal Government would welcome the technical support and expertise of the IMF for its plans to diversify the Nigerian economy and further release its growth potentials.
Lagarde, at a press conference after the meeting with Buhari and the Federal Government’s economic team, the IMF Managing Director advised Nigeria to be more flexible in its monetary policies. She said her admonition to the Nigerian government was against the background of dwindling oil price and the need to support the poor. She said: “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 am not suggesting that rigidity be totally removed but some degree of flexility will be enough.”
Lagarde also added: “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.”
The IMF boss further disclosed that her discussion with the Buhari economic team was within the context of the country being the largest economy in the African continent. She noted, accordingly that the economic agenda of the Buhari administration was the issue in focus, especially becuse of the impact any policy somersault could have on the neighbouring countries in the West African sub region. She stressed that issues of fiscal discipline, transparency, the need to reduce corruption and accountability by the Buhari administration were also exhaustively discussed.
“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 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.
“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. “Nigeria is one of those that have impact not just on itself and its people but around it and it’s neighbours,” she stated. She equally disclosed that a team of IMF experts would be in the country next week do discuss and analuse the 2016 budget along with Nigerian officials. Lagarde also dispelled insinuations that she was in the country to negotiate loans and conditionalities on behalf of the Fund. She pointed out, however that with the zeal and determination she had seen in the administration, the country did not need any IMF programme.
“It is precisely to have good discussion about these new objectives, these reform agendas that have been identified and supported by the President and also to appreciate the impact that it will have on neighbouring countries because when a country large as Nigeria, anything that it decides, any hardship that it faces will have consequences around it and that is what our research and analytical work is demonstrating,” she said of her visit. The IMF boss added: “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.” On the belief that IMF policies are not pro-people, especially the poor, Larage said the Fund had since shifted focus in its relationship to members, with more emphasis on policy advice. “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,” according to her