IMF chief wants Nigeria’s forex restriction to be temporary

IMF Boss Christine Lagarde with Senate President, Bukola Saraki
IMF Boss Christine Lagarde with Senate President, Bukola Saraki

The Managing Director of the International Monetary Fund, Christine Lagarde, has said that the Nigerian government’s decision to restrict foreign exchange, a move that has affected millions of citizens, should only be a temporary economic step.

Ms. Lagarde, who is in Nigeria on a four-day working visit, said this when she met members of the Nigerian Senate on Wednesday in Abuja.

“Additional exchange rate flexibility — both up or down — can help soften the impact of external shocks, make output and employment less volatile, and help build external reserves,” she advised. “It can also help avoid the need for costly foreign exchange restrictions – which should, in any case, remain temporary.”

The Nigerian government has imposed restriction on foreign exchange access, blocking the use of Naira credit and debit cards abroad, and for online transactions requiring payment in foreign currencies.

Ms. Lagarde also spoke about the government’s proposal to remove fuel subsidy.

She said the benefits of fuel subsidy in Nigeria are hugely skewed in favour of the rich at the expense of the poor.

“The subsidies that are still in place for kerosene and diesel should be targeted at those that need it most,” Ms. Lagarde said.

“However, research shows that over 70 per cent of subsidies often benefit the rich, while less than seven per cent benefit the poor.

“Nigeria needs to take hard decisions on debt, expenditure, revenue. Nigeria’s oil revenue should be spent on her people. Moving forward, Nigeria should show resilience to grow her economy,” she added.

Ms. Lagarde said while “Nigeria’s economic diversification is remarkable”, the country’s 2016 economic outlook “is not high”.

She lamented terrorism ravaging the North-East zone as capable of constituting “significant threat” to Nigerian economic development.

She said Nigeria must show resolve in the fight against corruption.

“There will probably be financial volatility going forward but IMF is ready to offer technical and other forms of assistance to Nigeria at Federal and State levels,” she said.

Emphasizing the importance of the Nigerian economy to Africa, she said, “Nigeria has a massive footprint in the region. Whatever happens in Nigeria will affect her neighbours”.

Earlier, in his opening remarks, the Senate President, Bukola Saraki, said President Muhammadu Buhari and the eighth National Assembly was up to the task of moving the country’s economy forward.

“Nigeria is undergoing trying times with falling oil prices, however, our nation is resilient despite challenges,” Mr. Saraki said.

Earlier, Ms. Lagarde held a meeting lasting over two hours with Central Bank Governor, Godwin Emefiele, as well as top officials of the bank and Managing Directors of commercial banks at the headquarters of CBN.

Addressing journalists at the end of the meeting, she said the meeting focused on issues affecting the Nigerian financial sector.

She said commercial banks, as the drivers of the economy, must channel funds to support the real sector of the economy on concessionary terms.

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  • Screw-em

    Folks, a man was found recently with 800 ATM cards while boarding a flight to Dubai. But for the eagle eyes of custom officials,he would have escaped but was instead apprehended. This thief would have wasted our hard earned foreign exchange frolicking with hookers aka Ashewo’s on arrival in the UAE. Can anyone explain what informed the issuance of that many ATM cards from various Nigerian banks to one individual and for what purpose, because it defies banking principles. .See why we have to learn to ignore organizations whose sole purpose is to drive the nail through the comatose body of a Nation trying to fight for life it has beaten black and blue.Yet Lagrde is here spewing NONSENSE!!!!

    • Abdullah Musa

      You got it Patriot.

    • THE SOURCE

      @WAHALA– THIS LOST AND FOUND IBO MAN–MANU—IT IS LIKE U ARE SICK PERIOD–THE ISSUE HERE IS THAT HE MUST HAVE STOLEN THE 800 ATM CARDS—AND COULD BE AN IBO MAN LIKE U———-THOSE WHO TAKE OUR MONEY OUT ARE FULANI DANGOTES AND THE YOURBA ADENUGS–AND WIFE OF BUHARI–AISHA-WHO HAS FOOLISHLY OPENED THE FLOOD GATE OF CORRUPTION FOR HIS FULANI CURRENCY EXCHANGE DEALERS—————–THAT IS WHAT U SHOULD KNOW–COULD HE NOT HAB E BOUGHT DOLLARS AND TRAVELLED WITH IT THE NIGERIAN WAY?

  • Burning spear

    There are many other expenditure items in the presidency that are scandalous and mock the times that we are in.Yet we all know the mumu Buhari agents in EFCC will never look into such rubbish! There is the N189.1m voted for tyres for various vehicles, including the bulletproof and plain Mercedes Benz cars being used in the Presidency. The budget for the Presidency has been raised to N39b from N24.4b in the 2015 budget with N1,415,706,197 devoted to both local and international travels as against N944m spent in 2015 by Jonathan. We should be spending more time to find home-grown solutions to our problem given the global economic turmoil that we are witnessing. Than chasing spokesperson of PDP with a view to silencing them all
    At a time when we are not sure if human beings would be able to feed, the N24m budgeted for the purchase of exotic animals in 2015 has been increased to N326m in 2016.While feeding for BNuhari aléone is over 1.75b. What a shame—–

  • KUTI

    FELA’S SON, SEUN KUTI, ON BUHARI

    Buhari jailed my father on currency trafficking. My father did nothing wrong, but he put him in the prison for three years. My first three years in life from 1984 to 1986, I didn’t see my dad; he was dumped somewhere in Maiduguri. This is my own personal reason for a man like Fela who will never commit a crime. I know my dad and for you to jail that man you must be inherently evil. You know when you have experienced such blatant disregard for human right by taking away three years of his life for doing nothing. Will Buhari say he is not a criminal? He claimed he knew nothing about the PTF money. If he says he was not aware about that, how did he know when money got missing in Nigeria? There is a precedence. He has claimed ignorance before, he can do that again. Sadly that is what Buhari is doing–pretending not to be aware of the 5.6b Mr. Madueke left in the coffers of NNPC–Because Buhari is busy spening 326m to buy exotic animals–while feeding is taking 1.75b-That is after stealing over 2.8b oil wind fall for which he sent Fela to prison.

    • Otile

      I really blame sycophants and semi illiterate praise singers for supporting Buhari’s trampling on people with impunity. It is a pity.

  • MI

    ………make oil prices rise to appreciable level to lift the restriction on forex. For start, advise US to resume buying crude from us.

  • bib

    Madam we have come of age. We have realized that your advises are never for the good of this nation. So go and advise France government on how it should the France. Our government knows how to run the country for our benefits. Thanks.

  • Sir Demo

    IMF and its voodoo economics. Madmoseille Laggard pls leave us alone, Greece and Portugal need you as in badly, not Nigeria. We shd fight corruption? Thanks PMB and PYO and their team is up to the task. You are not fooling us o, as if you are unaware of massive looting and stashing of our commonwealth in overseas banks. If you come to tell Baba Bubu not to default on debt servicing, you miss road. The foreign debt that OBJ cleared when Okonjo the Saboteur was the Finance Minister! Under the same woman, we are not spending more than N1.5 trillion to service new debt. IRONICALLY CRUDE SOLD FOR MORE THAN $100 per barrel under the same VOODOO ECONOMISTS!

    If na style you come take to beg Bubu to stop EFCC from the impending arrest and prosecution of NGOZI OKONJO IWEALA, tufiyapa! Wasted effort. She must account and refund her share of the stolen yam and do her time in Kuje.