Buhari Govts Lacked Economic Star – IMF

Buhari Govts Lacked
Economic Star – IMF

                 IMF Managing Director



As International Monetary Fund (IMF) is
pressing Nigeria to further devalue its
naira currency amid uncertainty over the
political and economic outlook for Africa’s
biggest oil producer and economy.
IMF has also called on President Buhari to
continue the economic policies of his
predecessor, this is despite the fact that
such policies have criminalized the
Nigerian economy and pauperized the
overwhelming majority of Nigerians.
Speaking on the sidelines of the recent
World Bank-IMF Spring Meetings in
Washington DC, IMF Managing Director,
Christine Lagarde, cautioned against
policy somersault from regime change,
charging the new regime to continue
reducing public spending and end the fuel
subsidy regime, arguing that Nigerians
must endure the unavoidable hardships.
IMF Managing Director, Christine
Lagarde
According to her, “What we have
observed, the last one year in particular, is
that a good fiscal policy, with some
tightening no doubt, a good exchange rate
in order to adapt to the external shocks
and some use of reserves buffer, has been
fairly exceptional. In a nutshell, policies
that have been adopted by the Nigerian
authority have been positive.
Our sense is that some of these policies
need to be continued …We will still
recommend that any subsidy that is being
paid out on physical resources be phased
out to the possible maximum extent.”

The IMF boss argued that the Nigerian
economy has actually benefitted from
falling oil prices as a result of dollar
appreciation in value, because dollar
pricing for oil exports cushion the fall in
prices.
IMF Analysts said there’s disappointment
that President Muhammadu Buhari’s long-
awaited Cabinet list — five months in the
making and still not finalized — includes
no economic stars to guide much-needed
reform.
“There’s no economist on the (Cabinet)
list that can suggest to the government
ways to improve revenue generation and
how to run the economy,” said Garba
Kurfi, managing director of APT Securities
and Funds.
The naira has lost 25 percent of its value
in the past year and the stock market
plummeted by 20 percent last year and 14
percent this year because of political
uncertainty and halved prices for oil that
provides most government revenue.
Nigeria’s Central Bank devalued the naira
by 8 percent in November and then fixed
the official exchange rate at an even
lower 198 to the dollar, though it sells at
222 at exchange bureaus.
Unable to stem the slide, the Central Bank
has defended the naira by restricting
access to foreign currency and banning a
long list of imports.
“It’s like digging a hole to fill up another
hole,” said an editorial in Nigeria’s
huhuonline news website.
The restrictions are “quite detrimental,”
said the International Monetary Fund’s
Africa director, Antoinette Say
They “are already making it harder for the
average person to buy milk,” she said at
the IMF annual meeting that ended in
Peru this week, according to the
organization’s website.
She called for a review of the restrictions
and for officials to “permit the exchange
rate to continue to adjust.”