The Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, is billed to commence a four-day working visit to Nigeria effective from today.
Already, Lagarde’s advance party had been in Abuja, the nation’s capital, and in the course of the visit, domestic economic issues such as fuel subsidy, diversifying Nigeria’s earnings to non-oil sectors, devaluation of naira, state of nation’s infrastructure and the work ability of the 2016 budget are some of the critical issues expected to shape the high level discussion between the IMF delegation and Nigerian officials.
Lagarde’s itinerary is still sketchy as at press time but sources in the know said that the IMF boss will meet with President Muhammadu Buhari at the presidential villa during the visit.
Tomorrow, Lagarde will hold session with Finance Minister, Kemi Adeosun and meet with Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, same day.
On Wednesday, Lagarde will be interfacing with a group of select stakeholders and non-governmental organisations (NGOs) during which issues on global economy and its effects on Nigerian domestic economy will be looked at.
Both the IMF and World Bank share similar disposition in respect of oil subsidy removal.
The two global institutions are of the view that the subsidy funds, which cost government over N7 trillion in the last five years, is unsustainable, advising that the huge sums could be channelled to other productive areas that will have lasting positive impact on the economy.
Their disposition to oil subsidy removal is further reinforced against the backdrop of crash in crude oil prices at the international market.
Last month, IMF predicted a volatile and tougher days ahead for oil-producing nations.
The Fund, in its IMF Executive Board Concludes 2015 Article IV Consultation with Iran” report, highlighted that the price of crude oil could drop between $5 and $15 in 2016.
According to IMF, the dwindling oil prices would not have overtly negative effect on Iran, whose gross domestic product (GDP) is expected to rise four to 5.5 per cent by 2017.
“Prospects for 2016/17 are brighter, owing to the prospective lifting of economic sanctions. Higher oil production, lower costs for trade and financial transactions, and restored access to foreign assets, are expected to lift real GDP to about 4–5.5 per cent next year,” IMF said.
The same cannot be said for Nigeria, whose 2016 budget is benchmarked at an oil price of $38 per barrel for the 2016 fiscal year.
With Nigeria expected to produce 2.2 million barrels of crude oil per day in 2016 and sell at $38 per barrel, the country expects to generate $83.6 million per day in 2016; $30.514 billion in the year 2016.
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