Lagarde meets Buhari, harps on fiscal discipline

Christine Lagarde, Managing Director, International Monetary Fund (IMF), has met with President Muhammadu Buhari at the Presidential Villa, Abuja, harping on the need for fiscal discipline, financing and implementation of monetary policies.

She said in view of the economic challenges faced by Africa’s leading economy, which focuses on oil as its main source of income, the president must follow his corruption and transparency crusade through.

Lagarde, who said she would not comment on the 2016 budget proposal, however, added that a team of analysts from the fund would be in Nigeria next week to carry out proper assessment.

The aim of Lagarde’s visit is to strengthen relations between the IMF and its African member countries, as well as reinforcing the partnership with Nigeria, Africa’s largest economy.

In Cameroon, Lagarde is to meet President Paul Biya and his economic team. She will also hold meetings with the finance ministers of the Economic and Monetary Community of Central Africa (Cemac).

She said: “As the largest and most diversified economy in Cemac, Cameroon is well-placed to sustain, and reinforce, the momentum of integration.”

Lagarde’s visit came days after Buhari announced the 2016 budget, in which he announced Nigeria will increase domestic borrowing to N984 billion and foreign borrowing to N900 billion, totalling N1.84 trillion.

Buhari forecast the country would face N2.22 trillion deficit amid an ongoing fuel crisis and decreasing oil prices. Price per barrel is now around $36 to $38 compared to $50 at the beginning of 2015.

Nigeria is Africa’s biggest oil producer and petroleum exports make up 90% of the country’s total revenue.

However, the nation’s lack of refineries – at present there are four and of these, three resumed production in July after months of inactivity – mean the country has to export about 90% of its crude oil and import petroleum products, including fuel.

The government then sells fuel to Nigerians at subsidised prices and reimburses the difference to importers. The previous administration led by Goodluck Jonathan, has been blamed for the ongoing fuel shortage, amid the outrage of many.