Organisation pledges support to Nigeria

The Managing Director of the International Monetary Fund, Christine Lagarde, has pledged its support for Nigeria in case they need any financial assistance.

She opined that devaluation might not be a good alternative for the country as it seeks to solve its current economic challenges.

Lagarde stated, “The IMF remains available to all its members; so, the moment we are asked to help, we’ll do the best we can to help. Both countries, Azerbaijan and Nigeria, have been hard hit by the oil price decline shock, because their economies depend heavily on oil exports, both in terms of trade, and in terms also of revenue.

“When you lose a lot of that, because the price decline was about 70 per cent, then clearly it puts the economy under shock.”

READ: IMF chief tells lawmakers the Fund does not back FX curbs

She observed that Nigeria is not poised to solving its economic issues, while comparing its resolve with Azerbaijan which happens to be doing much better.

She said, “Policies adopted by the two are different. Azerbaijan has certainly taken a good fiscal approach, is reassessing spending, is really trying to restore its position, and it is also using the exchange rate as a buffer.

READ: IMF chief tells lawmakers the Fund does not back FX curbs

“Nigeria is not there, and we certainly hope that in terms of identification of fiscal resources, removal of oil subsidies, she can do with an exchange rate policy that is sensible, in the sense that it is not going to waste reserves.

“We have in particular indicated that a persistent pegging of the naira would not be such a good idea. So, they have to adopt their policies, they have to adopt their model, and if they need IMF’s help, we’ll be ready to help. No question about that, and no stigma associated with it. They are clearly a victim of an external shock, and they have to face a response, which is a national response to that situation.”

Nigeria will be hopeful that its current measures to tackle economic issues pays off.