By SEGUN ODUNEWU
ALTHOUGH during her visit, Managing Director of the IMF, Christine Lagarde said there was no need for Nigeria to seek for IMF loan assistance. Experts are of the opinion that the IMF boss was being diplomatic with the government because her body language was clear and there were enough suggestions in her speeches to point to a definite direction devaluation of the naira.
For instance during her visit, Lagarde advises the Federal Government to have a “Flexible Monetary Policy”. Experts argued that the so called “flexible” policy might be another way of telling policy makers to devalue the naira.
Another theory to the visit National Daily gathered could have been to halt CBN policies which an expert says is already affecting European manufacturers. The visit, it was gathered could be a subtle way to press Nigeria to adopt policies such as naira devaluation, removal of forex restriction in other to allow European made goods to enter the country unhindered.
When the naira is devalued and the CBN’s policies are moderated to favour unrestricted importation, experts argued the sole beneficiaries would be the foreign exporters. “More of their goods will enter the country cheaply to the detriment of locally made goods” the source said.
It was gathered that the first step towards achieving this goal will be to be allowed to play an advisory role in the development of the budget. Already as parts of the agreement with the Federal Government, the IMF has sent a team of economists to help structured the 2016 budget to make it implementable.
With the acceptance of this offer by the Federal government, Nigerians are skeptical about the possible consequences if the Federal Government went all the way with the IMF.
Former Economic Adviser to ex-President Olusegun Obasanjo, and Chief Executive, National Planning Commission, Professor Ode Ojowu, said the visit was a welcome development for the nation, coming at a time the country was taking some major economic decisions. Prof Ojowu however, warned on further devaluing of the naira, saying at the moment the naira was well priced and devaluing it further would affect the scale businesses.
In his reaction, the Head of Department of Economics/ Banking and Finance, Bayero University, Kano, Professor Mustapha Muktar, warned the Nigerian government to be careful about taking unnecessary loans from the IMF. He said the government should accept any proposal that would improve the business environment and promote the private sector but that it should be wary of falling into the IMF trap.
“I, personally, am not comfortable with loans from the IMF because in most cases they come with some conditions that may be disastrous to the economy in the future.” He said even the removal of subsidy was not the best option but government should ensure that the subsidy reaches the targeted individuals.
Executive Director of Community Outreach for Development and Welfare (CODWA), Taiwo Otitolaiye said CODWA is apprehensive of the presence in Nigeria of Ms. Christine Lagarde, saying that the antecedent of the global body in arm-twisting nations for near suicide conditionality is well known.
“The Buhari administration should seek the advice of economic experts with people-oriented mind to understand and engage the IMF. We are not unwary of the antics and strategy the world capitalist frontier uses in countries. “All clandestine negotiations to hoodwink Nigeria into IMF imperialist and anti-people economic regimes are not acceptable to Nigeria and the mass of our people.
Director, Lagos Chamber of Commerce and Industry, Muda Yusuf said most times when IMF is embarking on a visit to any country, especially in third world countries, there is usually suspicion that they have a hidden agenda they want to push which comes with numerous conditions.
These suspicions, in the case of Nigeria are well placed as history have revealed. Nigeria’s romance with the IMF has never been mutually beneficial. For instance, it was the same IMF, just as it is doing now that suggested the Structural Adjustment Programmed (SAP) for Nigeria as means of curbing economic retrogression being faced by Nigeria at the time.
By the time the IMF was through with the country under that regime, the currency which was about 90 kobo to the dollar went up to N18. The middle-class disappeared during this regime. It was also the era that the now popular “tokunbo” products became a fade among Nigerians because of its affordability.
When Christine Lagarde first visited Nigeria in 2012, the outcome of that visit was an increased in the pump price of petrol from N65 to N140. With this recent visit, and at a crucial time when the country is vulnerable, experts are quick to point out that the Federal government must be careful and mindful of the IMF advices.
The 2016 budget document has shown that the nation’s aggregate spending is capped at N6.08 trillion. Meanwhile, projected revenue of N3.86 trillion is estimated, which implies a deficit of N2.22 trillion.
While the expenditure side of the budget remains a welcome development for the already beaten economy, there have been issues on the income side. Compared with 2015, fiscal spending plan is 34 per cent above the previous budget.
Group Managing Director, Energy Group; Jimoh Ibrahim described the visit and suggestions of the IMF as economic bait that will do Nigerians no good.
He said the IMF boss’ statement on the economy is full of strategic misrepresentation adding that the IMF boss had a full day creating an atmosphere for re-colonizing Nigeria’s economy and advises the government to run away from such unsolicited advice.
“For IMF to advise Nigeria not to be rigid in Economy Policy is an indirect way of asking for devaluation of naira and campaigning for ‘about to come’ IMF conditionalities, knowing very well that Nigeria may ask for assistance.”
However, Professor Pat Utomi thinks otherwise. Speaking against the backdrop of concerns expressed by some observers on the effect of IMF intervention in Nigeria’s economic and fiscal policies, Professor Pat Utomi, said there is nothing wrong with the IMF visiting Nigeria because the country is a member of the Fund.
”As members of the IMF it should be routine to have consultations. We must not lose sight of the fact that we live in a globalised world and that bad economic management in one country can result in export of troubles to other economies. “
Professor Utomi said when a country is experiencing financial or economic crisis; the IMF was put there to help out. ‘We all contribute to and can have recourse to Special Drawing Rights, SDR, of the IMF in temporary trouble times but no one is compelled to go there.”