Nigeria does not need the direct intervention of the International Monetary Fund (IMF) since the country is already well-endowed to tackle economic challenges confronting it. To buttress this, out of the 23 projects currently being financed by the IMF in Africa, none is sited in Nigeria.
IMF managing director, Christine Lagarde, who stated this while speaking with business leaders in Lagos during a two-day visit to Nigeria, said all the country needed from the institution was technical assistance to boost capacity. “Nigeria is capable of standing alone, apart from some technical assistance. No Nigerian government needs the blessing of the IMF. Nigeria has huge population and vast potential which embodies the spirit of leadership for Africa,” she said.
In a speech entitled: “Africa’s Future: Responding to Today’s Global Economic Challenges,” she noted that the fund was more interested in building partnership with the country without interfering or disrupting what the government has already put in place to revamp the economy.
She however warned that managers of the economy should guard against the negative effect of the global crisis especially in Europe, and the likely drop in demand for commodities by China and India. This can be done by building on the foreign exchange reserves, enhancing the sovereign wealth fund and reducing budget deficit and inflation.
According to her, government should go beyond speeches and begin to implement what they have promised in order to tackle the imminent contagion from the Eurozone crisis. “There is need for adjustments to consolidate and provide support for growth. It will take the spirit of resilience, dedication and implementation. Good speeches are not enough but actual delivery of what is said. What we advocate is not just growth for growth’s sake but inclusive growth that will create jobs.”
The IMF boss also said the level of unemployment in the country has become a critical economic and social issue, especially for young people whom the rate of joblessness was now over 35 per cent.
She said it was not enough to say that the economy was growing without the attendant job creation.
“Job creation will be critical to ensuring that growth is both economically and socially sustainable,” she said.
Going forward, Lagarde opined that establishing the Sovereign Wealth Fund and emphasising the use of oil revenue for stabilisation and investment were important advancements.
“Pressing ahead with these reforms is particularly important, given the external environment – namely, the need to rebuild fiscal buffers,” said the IMF chief.
She believed that prudent management of natural resource revenues would create room for other critical public spending. According to her, given the distance still to go to reach the Millennium Development Goals (MDGs), increasing the resources available to build stronger social safety nets was particularly important, among other areas.
In a bid to create more jobs, the IMF believes that promoting a more diversified economy would help Nigeria better withstand shocks. It would also provide for more broad-based growth, with opportunities and jobs for the entire population.
Lagarde said Nigeria has enormous market for investors, a market where telecommunications grew, with the explosion of mobile phone subscribers from 60,000 in 2000 to 125 million as of today.
She canvassed further improvement in the business environment, adding that this would require investment to address infrastructure bottlenecks, to raise education levels, and help develop the agriculture sector.
While acknowledging progress made so far in the financial sector, she said a strong financial sector was key for true inclusive economic growth.
“Looking ahead, continued refinements in regulatory and supervisory practices should focus on preserving financial stability and improving access to credit,” she noted.
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