06 January 2016, Sweetcrude, Abuja — International Monetary Fund chief Christine Lagarde said on Tuesday she was not in Nigeria to negotiate a loan and urged the country to diversify its revenue to try and get out of an economic crisis fueled by the fall in oil prices.
Lagarde was speaking after meeting President Muhammadu Buhari on a four-day visit that will also see her hold talks with the central bank governor and business leaders.
She backed Buhari’s fight against corruption terming it “very important” and said the president’s reform push could have a positive impact in the region.
According to Lagarde Nigeria which is battling a revenue shortfall caused by the global oil shock, does not need assistance from the IMF.
“Let me be very clear: I’m not here nor is my team here to negotiate a loan with conditionalities, we’re not programming negotiations,” said Lagarde.
“Frankly, given the determination and resilience displayed by the presidency and his team, I don’t see why an IMF programme is going to be needed,” she told reporters in Abuja.
Nigeria, Africa’s number one oil producer, has seen revenues dive over the last year because of the fall in global crude prices, causing a cash crunch that has forced it to tighten spending.
The naira currency has also slumped and GDP growth stalled to under 3.0 percent, while inflation is nudging 10 percent.
Lagarde described the talks as “excellent” and said they touched on “the challenges ahead stemming from the oil price reduction” and the need to find different revenue sources.
They also discussed “the necessity to apply fiscal discipline and the need to respond to the population’s needs, improving the competitiveness of Nigeria and focusing on the short-term fiscal situation”.
Buhari has made reviving the flagging economy one of his key priorities alongside cutting endemic corruption and government waste, and improving transparency and accountability.
Lagarde said they were “very ambitious goals that need to be delivered upon”.
Nigeria last month unveiled a 6.08-trillion-naira (about $30-billion, 27-billion-euro) budget, increasing investment on capital expenditure to stimulate growth and lower dependence on crude.
Lagarde said it was not her place to “approve or comment on the budget”.
But she disclosed the IMF would undertake a review and audit from next week “to really assess whether the financing is in place”.
It would also look at “whether the debt is sustainable, borrowing costs are sensible and what must be put in place in order to address the challenges going forward.”