We Will Help Trace Looted Funds- IMF

The Managing Director of the International Monetary Fund, Christine Lagarde, has said that the organization was willing to assist the Federal Government of Nigeria in plugging revenue leakages, tracing stolen funds and restructuring the tax system.

Lagarde, who is in the country on a four-day working visit, reportedly said this during a closed-door meeting with President Muhammadu Buhari at the Presidential Villa, according to a statement by the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina.  The President said that the Federal Government was reviewing its operational costs and had directed all the MDAs to cut down on their overheads. According Adesina, the Federal Government will welcome the technical support and expertise of the IMF for its plans to diversify the Nigerian economy and further unleash its growth potential saying that “We have just come out of budget discussions after many weeks of taking into consideration the many needs of the country and the downturn in the economy with falling oil prices and the negative economic forecasts. We are working very hard and with the budget as our way forward; we will do our best to ensure that our country survives the current economic downturn. We have also told all heads of Ministries, Departments and Agencies of government that on our watch, they will fully account for all funds that get into their coffers”.

On her meeting with the President, Lagarde said she and her team had excellent discussions with the President and that they discussed the challenges ahead for the economy stemming from oil price slump. She said the meeting stressed the necessity to apply fiscal discipline and the need to also respond to the population needs, while addressing the medium term specificities of improving the competitiveness of Nigeria and also focusing on the short term fiscal situation.. She said, “Oil is not the major contributor to the Nigerian GDP, it is only about 40 per cent; but it is a big source of revenue for the government. We discussed with the President, vice president and the ministers of Finance and Budget how more efficiency, more transparency, better accountability and enlarging the base of revenue could actually contribute to sound budgets going forward. It is not for me here and now to actually approve or comment on the budget because we have procedures in the IMF under which a team of economists is going to come next week actually to do what we call the Article 4, which is to review and have good discussion with partners the IMF on one hand, and the country’s authorities on the other hand. This is to really assess whether financing is in place, whether the debt is sustainable, whether the borrowing costs are sensible and what strategy should be put in place in order to address challenges going forward”. Lagarde noted that as customary, a team of IMF economic experts would arrive the country next week to assess the 2016 budget of the Federal Government.

She also said she would have more discussions with the Minister of Finance and the Governor of the Central Bank of Nigeria. “We will be discussing issues of fiscal discipline, financing monetary policies and the degree of flexibility, with the fact that Nigeria with a vibrant large economy, still has to deal with poor people, a lot of inequality and those two components should certainly be the drivers of reforms. Whether it is looking at subsidies and how they are structured and how they can be phased out, whether it is monetary policy and the flexibility needed and knowing what effect it has on the poor, all of those are ambitions that we could quickly recognise and support. Our technical discussions will continue and to those of you who wonder why the IMF managing director is visiting Nigeria, it is precisely to have good discussions about these new objectives, these reforms agendas that have been identified and supported by the President, and also to appreciate the impact that it will have on neighbouring countries” she said.