Not a few Nigerians might have gotten goose pimples when the news hit the airwaves that the Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, was coming to Nigeria.
Before the news broke out, there was downturn in Nigeria’s economy due to persistent fall in oil prices in the international market.
Nigeria, which has, over the years, mainly depended on crude oil revenue, was being threatened by the oil prices that crashed from over $100 per barrel to about $34 per barrel as at mid-last week.
The dwindling revenue has also adversely affected projections in the Federal Government’s 2016 Budget proposal currently before the National Assembly.
Since its inception, the IMF has played major roles in the financial crises of some of its member nations, especially the oil shock of the 1970s and the debt crisis of the 1980s, which resulted in sharp increases in IMF lending.
In the 1990s, the transition process in Central and Eastern Europe and the crises in emerging market economies led to further increases in the demand for IMF loans.
Deep crises in Latin America and Turkey kept demand for IMF loans high in the early 2000s while IMF lending also rose in the late 2008 in the wake of the global financial crisis.
The N6.08 trillion 2016 Budget proposal presented by President Muhammadu Buhari last month, which tends toward deficit, according to the Minister of Budget and National Planning, Udoma Udo-Udoma, will be partly funded by improved taxes management and loans.
Speaking with State House correspondents on how 2016 Budget will be funded after the Federal Executive Council (FEC) meeting approved the Medium-Term Expenditure Framework (MTEF) last month, Udo-Udoma said: “We will get the funding from two sources. We are looking at increasing our non-oil revenue; we are trying to get more money from the various government agencies, policing their collection and trying to get more money from them.
“We will also look at keeping down our recurrent budget, which means we are looking at savings that we can make from overheads.
“We will look at the efficiencies from our revenue collecting agencies such as the Federal Inland Revenue Service (FIRS), in terms of company income tax, in terms of Value Added Tax (VAT), and then the difference, we will have to borrow.
“But the level of borrowing that we anticipate and we are projecting will be well within the maximum that we allow, which is three per cent of the Gross Domestic Product (GDP), because we want a prudent budget, we want a credible budget. So, we are working on that now.”
Probably because the minister did not specify then whether the borrowing will be within the country or from outside the country, those Nigerians alarmed by Lagarde’s visit to Nigeria likely linked the visit to moves for Nigeria to access IMF loan.
Their fears were aggravated by the past sad stories of some developing countries that had problems in repaying such loans and meeting IMF conditionality.
Allaying the fears after meeting President Buhari at the Presidential Villa, Abuja last Tuesday Lagarde categorically declared that she was not in Nigeria to negotiate for IMF loan for the country.
Stressing that her visit was routine and centred on technical discussions, she said: “Our technical discussions will continue and to those of you who wonder why the IMF Director is visiting Nigeria, it is precisely to discuss these new objectives, these reforms agenda that have been identified and supported by the President and also to appreciate the impact that it will have on neighbouring countries because
when a country large as Nigeria, anything that it decides, any hardship that it faces will have consequences around it and that is what our research and analytical work is demonstrating.”
With the determination and resilience by President Buhari and his team, she noted that Nigeria does not currently need IMF programme.
Despite her remarks, some doubting Thomases feared that the matter may become like the popular Nigeria’s saying “the more you look, the less you see.”
But the President, in a statement by his Special Adviser on Media and Publicity, Femi Adesina, has helped to throw more light on the discussions at the closed-door meeting.
As if fore-closing any idea of IMF loan, the statement said the President, during the meeting, told Lagarde that Nigeria will look inward to overcome its economic challenges.
The President, however, said his administration will welcome technical support and expertise of the IMF on plans to diversify the Nigerian economy.
Nigeria, definitely, cannot afford any facility that will worsen its economic situation in the long run.
Tougher times for MDAs
Tougher times appear to be awaiting government’s revenue generating ministries, departments and agencies (MDAs).
Dictates of the current economic realities will not allow businesses to be conducted ‘as usual’ in the MDAs.
Before now, the government agencies whose salaries, overheads and capital expenditure are paid by the Federal Government were expected to generate operating surplus and credit 80 per cent of the income to the Consolidated Revenue Fund (CRF).
But the government has discovered that many of the agencies have never credited anything to the CRF and never generated any operating surplus.
To this end, the government has announced measures to strictly monitor the MDAs in the face of the falling oil prices in the international market towards plugging leakages and boosting government revenues.
Apart from those generating revenues in dollar now to be made to remit same to the government in dollar denomination, free spending of incomes have also been stopped.
As part of the decisions taken at last Wednesday’s Federal Executive Council (FEC) meeting, the government also has set up efficiency unit to look into how money is spent and the savings.
The MDAs will now have to submit budget for approval before spending any revenue generated.
The ministers supervising such revenue generating boards were also reminded during the last FEC meeting of their responsibilities in the matter under the Fiscal Responsibility Act (FRA).
Strategies should be put in place now to check any new ways the civil servants and their heads could exploit to beat the new order.
It is hoped that government’s new moves along with other measures will help to sanitise the system, provide more revenue for 2016 Budget and reshape the Nigerian economy.
Nigerians on the streets, no doubt, have no business with suffering given the natural and human resources God has endowed the country with.
