ECONOMY: IMF warns Nigeria

International Monetary Fund (IMF) Managing Director, Christine Lagarde (C) shakes hand with President Jonathan after their meeting with Finance Minister Ngozi Okonjo-Iweala (R) in Abuja.

The Managing Director, International Monetary Fund, IMF, Ms Christine Lagarde, yesterday, warned Nigerian leaders to immediately commence the process of rebuilding the nation’s depleting reserves or face an impending economic disaster that would possibly arise from another global financial crisis.
She said: “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. Her comment came on the heels of mounting debt pressure in Europe, declining economic growth and unemployment in the United States of America, China and Asia generally.”
Speaking at an interactive session with private sector leaders, organised by the Federal Ministry of Finance and the Nigerian Economic Summit Group, in Lagos, Lagarde, cautioned that unless the country restores its fiscal buffers, such as shoring up its foreign reserves, oil reserves, foreign exchange rate and churning out people-friendly policies, it will not be able to withstand the shock of an economic crisis which is currently ravaging Europe and other advanced countries, with the threats of it spreading to emerging economies.

She further cautioned that the country’s growth programmes be all-inclusive and be capable of creating jobs and bringing about a revival in the real sector.
It will be recalled that Nigeria’s excess crude account dropped from $20 billion at the beginning of 2009 to $11.2 billion in 2010 and further to about $4 billion in 2011. The account has been a source of contention between state Governors and the federal government.  The fund was used to beef up revenue allocation to the three tiers of government following the dwindling revenue accruing to the federation account as a result of the global economic recession that has resulted in the fall of prices of crude oil the major revenue source of the country.
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