IMF's Lagarde Discusses Low Oil Price, Need For Fiscal Discipline With Buhari

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, on Tuesday visited President Muhammadu Buhari, where they discussed among other things the dwindling price of oil in the international market.

“We discussed the challenges ahead, stemming from the oil price reduction, the necessity to apply fiscal discipline and the need to respond to the population needs”, she said while briefing journalists at the State House, Abuja.

She noted that this could be done by “addressing the medium term necessity of improving competitiveness of Nigeria and yet focusing on the short term fiscal situation, which requires that revenue sources be identified in order to compensate the shortfall resulting by the oil price decline”.

The former French Finance Minister further noted that “oil is not the major contributor to Nigeria’s GDP; its only about 14 per cent” restating the fact that “it is a big source of revenue for the government”.

The meeting, according to Ms Lagarde, also discussed issues including how more efficiency, more transparency, better accountability and enlarging the base of revenue can be used for “a sound budget going forward”.

She, however, refused to comment on the 2016 Appropriation Bill submitted to the National Assembly by President Muhammadu Buhari because there are procedures at the IMF that must be followed.

“A team of economists is going to come here (Nigeria) next week to review and audit (the Bill) and have a good discussion with the government authorities to really assess whether the financing is in place, whether the debt is sustainable, whether the borrowing costs are sensible and what strategy must be put in place in order to address challenges going forward”, she said.

IMF boss also stressed the importance of President Buhari’s stand and commitment to wipe out corruption and bring about transparency and accountability from all levels of of the economy, maintaining that it is an “important agenda item and a very ambitious goal that needs to be delivered upon”.

She noted that she will continue to have discussions with Nigeria’s Finance Minister and Central Bank Governor on issues of fiscal discipline, financing, monetary policies and the degree of flexibility, because despite “Nigeria being a vibrant and large economy still has to deal with a lot of poor people with a lot of inequality” adding that “those two components should certainly always be the drivers of reforms, whether it is looking at subsidies, how they are structured and how they can be faced out”.

She maintained that the above listed are ambitions the IMF completely recognise and support.

Ms Lagarde noted that she is in Nigeria to have good discussions on the new agenda, objectives and reforms identified by President Buhari and appreciate the impact they will have on neighbouring countries.

She also noted that there has been a massive democratic change in Nigeria compared to her last visit.

We Are Not Here To Negotiate A Loan

The IMF Chief in unequivocal terms maintained that the world monetary regulation agency is not in Nigeria to “negotiate a loan with conditionalities”, adding that “we are not in to programme negotiations”.

She further noted that the IMF only lends to countries where the balance of payment is in a very bad situation and when no financing is available”, stressing that “at that point in time, in order to pull that country out of the difficult situation that it is in, then we come in and lend.

“We do that because it is the money of the entire international community and we do so with the guarantees that the international community wants; which is that the economy is going to improve, fiscal discipline is brought in and corruption punished”, she maintained.

She also allayed fears that the IMF gives conditional loans to developing countries that makes the poor to be poorer while the rich smile to the bank, insisting that since she has been at the helm of affairs of the IMF in the last four years, “this has not been the policies that we have recommended and this is not certainly the feedback that I have received from the countries with which we have partnered”.

Christine Lagarde arrived Nigeria on Monday for a four-day official visit.

The meeting is expected to help strengthen the IMF’s partnership with the largest economy in Africa and to discuss how to address Nigeria’s economic challenges and the impact of low oil prices.


According to a statement by the IMF, “Mrs Lagarde believes that Nigeria is working hard to improve its business environment, promote opportunities for growth in the private sector and strengthen social cohesion and all areas where government has an important role to play.”