IMF boss Christine Lagarde starts four-day visit to Nigeria over worries about the economy

INTERNATIONAL Monetary Fund (IMF) managing director Christine Lagarde plans to visit Nigerian starting from today as part of a four day working visit as part of a move to bolster the economy that is showing signs of distress following the collapse in crude oil prices.

 

Ms Lagarde, 59, is due to touch down in Abuja later today for talks with President Muhammadu Buhari and the key government officials including finance minister Kemi Adeosun and Central Bank of Nigeria governor Godwin Emefiele. During her visit which will last from January 4 to 7, Ms Lagarde will examine means of strengthening the Nigerian economy. 

This will be her second to Nigeria, after an earlier one in December 2011 and has been necessitated by the fact that global crude oil prices have fallen to as low as $37 a barrel. This time last year, oil prices stood at over $100 a barrel and at one stage during the administration of former president Dr Goodluck Jonathan, they soared to as high as $140 a barrel.

 

High oil prices provided Nigeria with a much needed fillip as the country enjoyed annual gross domestic product (GDP) growth of 7%. However, with oil prices now low, a downturn is expected and the economy is not expected to grow by more than 5% a year for the foreseeable future.

 

While in Nigeria, Ms Lagarde will also engage with local policymakers to find ways of tackling the present challenges including foreign exchange restrictions, the debit card ban abroad and the restriction placed on some import items. In mid-December the IMF projected that crude oil prices may slump to a low of $20 per barrel in 2016, so there are fears that if the Nigerian economy suffers as a result of this, the government may impose more restrictions on the flow of cash abroad. 

 

Experts have raised fears over the deficit financing of N2.22trn (£7.4bn) which is around 2.16% of GDP. Already, the Trade Union Congress of Rivers State has warned that if oil prices continue to plunge, it may be difficult to achieve the plans of the 2016 budget. 

However, solid minerals minister, Dr Kayode Fayemi remains confident that the non-oil sector could hugely finance the 2016 budget. President Buhari hopes to borrow N1.84trn (£6.25bn) in addition to other domestic borrowing of N984bn and foreign borrowing of N900bn, that will bring the country’s debt profile to 14% of GDP.