IMF Director, Christine Lagarde is coming to Nigeria. Here are the issues she should address
International Monetary Fund (IMF) Managing Director, Ms. Christine Lagarde is on a scheduled visit to Nigeria to discuss with President Muhammadu Buhari and several stakeholders to proffer solutions to the country’s economic challenges. The visit, which will take place between the 4th and 7th of January 2016, will focus on discussing ways of boosting the economy which experts have said is showing signs of distress orchestrated by the falling oil prices. While Christine Lagarde’s visit is ongoing, here are a few key areas Nigerians can expect to be focused on during her second visit to the country.
As the main focus of the visit is on the economy, the IMF team may be interested in sharing ideas on how Nigeria can improve its economy by shifting attention to other resources besides crude oil. Although many experts have called for Nigeria to focus less on oil and more on natural resources in order to revive the economy, very few steps have been taken to actualize the goal. The new minister of natural resources, Kayode Fayemi, has been called on to take certain steps on improving the sector. In December, Fayemi said, that he is committed to ensuring the Nigerian economy benefits from the sector within a decade. According to ThisDay, the minister has pledged to focus on employment, block existing leakages to shore up revenue generation and build an industry that would support the country’s industrialization and become sustainable, transparent and environmental friendly.
Advocating for reduction on public spending
Last year, Christine Lagarde alerted the Nigerian government on public spending, advocating the removal of the fuel subsidy. “On the issue of the eight African countries that are oil exporters, some of which actually benefit as a result of dollars appreciation, you get dollar pricing for the oil you export and sometimes this helps to cushion the decline in oil pricing. But the point must also be made that some of these countries also acquire loans which are dollar denominated. They have to try to be cautious with public spending. We will still recommend that any subsidy that is being paid out on physical resources be phased out to the possible maximum extent. This is already happening in Nigeria, but more still need to be done, as quickly as possible, especially if it is not being engaged in sectors of the economy where they are not being done”, Lagarde said at the time.
Laws to aid economic growth
While economic issues are the underlying reason why Christine Lagarde is in Nigeria for the second time in five years, it is interesting to note that she is also meeting with legislators. The meeting could awaken the Nigerian legislation to push bills that will aid economic stability in the country. A certain amount of pressure has been placed on the National Assembly and the minister of transportation, Rotimi Amaechi to pass the Chartered Institute of Logistics and Transport bill into law. “The bill is a bill for an Act to establish the CILT Nigeria, charged with responsibility for among other things determining standard of knowledge, skill and qualification of persons seeking to become chartered logisticians and transporters in the country and for related matters.” The bill if passed could completely transform the transport sector and improve efficiency thereby providing economic stability in the sector.
Acknowledging Nigeria’s private sector growth
According to a report from the IMF, Lagarde who will be visiting with an IMF team, has acknowledged the country’s efforts towards establishing sustenance in its private sector. During her 2011 visit, she advised Nigeria to implement people-friendly policies that will aid sustenance of the economy and help Nigerian citizens move forward in the face of a global slowdown. “A sustained slowdown in advanced countries will dampen demand for Africa’s exports and together with continued financial market uncertainty, this will likely inhibit private financing flows, remittances, and concessional financing”, she said. According to Trading Economics, private sector credit in Nigeria experienced significant growth in 2015, reaching 18706811.70 percent in November, 2015.
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