Christine Lagarde, managing director of the International Monetary Fund (IMF) is scheduled to visit Nigeria early in January to hold talks with policy makers and key private sector representatives on how to help the country’s ailing economy come up stronger.
The four-day working visit between January 4 and 7 will be Lagarde’s second to Nigeria, after an earlier one in December 2011.
BusinessDay learnt that the talks will primarily hover around how the IMF can help the country sustain its economy and quickly move out of an impending economic distress triggered by incredibly low oil prices that have undermined government’s income.
Oil prices at a low of about $37 per barrel have heightened threats to Nigeria’s revenues and put a strain on the FX position of Africa’s largest economy, leaving government at a cross-roads as to how to revamp the system and stem further deterioration.
The IMF projects that crude oil prices may slump to an all-time low of $20 per barrel in 2016.
Meanwhile, President Muhammadu Buhari has proposed a record N6.08 trillion budget to see the possibility of revamping the economy and creating jobs for millions of unemployed youth but there are concerns around how such a budget, which also comes with a huge fiscal deficit of N2.22 trillion will be funded. The deficits represent 2.16 per cent of Nigeria’s Gross Domestic Product.
Buhari also projects his government could rake in some N3.86 trillion revenues and also hopes to finance this level of deficits from new borrowings of N1.84 trillion with a combination of domestic borrowing of N984bn and foreign borrowing of N900bn. This is expected to take the country’s overall debt profile to 14 per cent of its GDP.
“A possible discussion will be on how the Brentwoods Institution can help Nigeria fund some of this deficit,” a source who is also part of the preparations told BusinessDay.
On the trip, Lagarde, 59 will hold talks with President Buhari who assumed office in May and took seven moths to constitute his cabinet and give economic direction of his government. The source said Lagarde will also try to assist with some suggestions on viable economic direction to government.
“This is a new government which is settling down and the president just released his agenda. So I expect that Lagarde and policy markers will jointly be looking at the current oil prices and what that portends for our economy,” the source added.
Lagarde will also be meeting the finance minister, Kemi Adeosun; as well as Godwin Emefiele, governor of the Central Bank of Nigeria, who is battling to save the local currency from further free fall. She will also be meeting the entire economic team, the National Assembly, bank chiefs, the Organised Private sector and women groups. She will also visit at least one orphanage.
BusinessDay recalls that Lagarde visited Nigeria and Niger from December 18–22, 2011, on her first trip to Africa, following her appointment. She then heard from policymakers, the African private sector and civil society about the challenges facing African countries and underlined the IMF’s commitment to further reinforce the IMF’s partnership with Sub-Saharan Africa.
Lagarde held a series of meetings with the leadership of Nigeria, including President Goodluck Jonathan and Ngozi Okonjo-Iweala, then Coordinating Minister for the Economy and Finance Minister .
