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Tag: IMF

  • IMF to Nigeria: Revise exchange rate policy to qualify for $1.4bn loan

    IMF to Nigeria: Revise exchange rate policy to qualify for $1.4bn loan

    Nigeria’s quest to secure a $1.4billion loan from the international funding agencies may be hindered, if the country fails to buy-in to reforms being pushed by the International Monetary Fund (IMF), a report has indicated.

    The IMF, Reuters said, is expected to warn Nigeria that its economy needs urgent reform, saying a failure to imbibe the measures, could delay talks over $1.4 billion in international loans. The global financial institution, is expected to warn Nigeria that its economy needs urgent reform, according to a report seen by Reuters that could delay talks over $1.4 billion in international loans.

    The Washington-based fund will urge Nigeria, a major oil producer, to introduce immediate changes to its exchange rate policy, saying the nation’s recent reform plan is not enough to drag Nigeria’s economy out of recession, the report, billed for release on March, 29, said.

    “Much more needs to be done,” the IMF said in the document, written after a final meeting between its representatives and top officials in Abuja before the fund issues its verdict on Nigeria’s economy next week.

    “Further actions are urgently needed,” it said.

    The report – from the fund’s acting secretary and addressed to members of its executive board – is set to form part of the IMF’s verdict, although Nigeria can request alterations. Three people familiar with the negotiations said it would send an important signal to institutional lenders.

    The World Bank has been in talks with Nigeria for a loan of at least $1 billion for more than a year and the African Development Bank (AfDB) has $400 million on offer, but discussions have stalled over economic reforms. Nigeria is seeking the funding for infrastructure investment and to help plug an expected record deficit in this year’s budget as it boosts spending to try to end a recession.

    “The tone of the IMF will be critical in terms of signaling,” said one of the people familiar with the negotiations, who spoke on condition of anonymity because they were not authorised to speak to media.

    Two of the people with knowledge of the loan talks said the lenders were unlikely to withhold funding entirely.

    President Muhammadu Buhari has rejected a devaluation of the Naira and backed curbs imposed by the Central Bank that force firms to buy dollars needed for imports for a premium on the black market.

    Nigeria has at least five exchange rates – the official one, a rate for Muslim pilgrims travelling to Saudi Arabia, one for school fees abroad and a retail rate set by licensed exchange bureaus.

  • Recession: NLC urges Fed Govt to shun IMF

    Recession: NLC urges Fed Govt to shun IMF

    The Nigeria Labour Congress (NLC) has urged the Federal Government not to seek solution to the recession from the International Monetary Fund (IMF).

    It warned against resorting to other external institutions for help, arguing that the solutions to the challenges could be found in this country.

    During the National Delegate Conference of the National Union of Civil Engineering Construction, Furniture and Wood Workers (NUCECFFWW), its President, Comrade Ayuba Wabba, said  for the country to be restored to growth path, the government should design policies that would bring back industries, create jobs, revive electricity and revalue the currency.

    He emphasised the need for the government to encourage the growth of the informal sector, resume local production of petroleum products, develop solid minerals and tourism, among others.

    “We do not need any lecturing from the IMF or any external institutions to do this. We have vibrant and experienced experts that can develop policies on these. Indeed, the government should, as a matter of urgency, convene a conference on the economy or assemble an all-inclusive team to develop an economic recovery framework that is people driven and people focused,” he said.

    He argued that the recession was not only a result of corruption but the continued adoption of policies imposed by neo-liberal institutions against the wishes of Nigerians.

    Wabba appealed to federal and state  governments to save the construction industry from collapse by paying the debts owed contractors.

    He said the construction industry was inactive because of the refusal or inability of governments to pay for jobs done and mobilise contractors for new jobs.

    “In view of the considerable harm and pain this has brought upon everybody in the chain, especially workers, I would want to use this opportunity to call on federal and state governments to without further delay, pay their debts to both local and international contractors. I have no doubt this will stimulate the economy in no small measure,” he said.

    Wabba called on members of the union to continue to support the  leadership of the union, saying that without their support, the leadership would not  be able to contribute effectively to the promotion and defence of workers’ rights as well as the advancement of good governance.

    “Do not allow yourselves to be distracted by those who seek to weaken us by attempting to divide our ranks. Be focused and remain committed to the struggle we know!  I urge you to continue to remain faithful to the historical tasks that your union is known for by way of actively participating  in action/activities that will ensure positive change; people driven governance and national progress,” Wabba added.

  • Economy coming out of recession – Presidency

    The Presidency on Tuesday reacted to the review of the economy by the National Bureau of Statistics (NBS), saying the report indicated that the economy was coming out of recession.

    “There are now indications that the Nigerian economy is well on its way out of recession considering the 2016 overall and last quarter Gross Domestic Product reports,’’ the Presidential Adviser on Economic Matters, Dr Adeyemi Dipeolu, said in a statement.

    A review of the recent GDP figures released by the NBS shows a contraction of -1.30 per cent in the fourth quarter of 2016, translating into an estimated economic growth rate of -1.51 per cent for the full year.

    Dipeolu said the Nigerian economy actually performed better overall last year as the growth rate was higher with a contraction at -1.5 per cent than the -1.8 per cent predicted by the IMF.

    He said the report had raised the hope that Nigeria was gradually coming out of recession with the improving trends in several key sectors of the economy including agriculture and mining.

    The presidential aide said the Buhari administration was also hopeful that with the series of ongoing engagement with the oil-producing communities of the Niger Delta, the increased oil production output would be sustained.

    He added that the ongoing implementation of the Social Investment Programmes and significant infrastructural spending of the Federal Government would spur a positive multiplier effect on the Nigerian economy.

    He said same effect was expected from the possible early legislative passage of the 2017 budget.

    “The Buhari administration will not relent in its determined effort and its comprehensive approach to bring about the full recovery of the Nigerian economy and set it on a solid path of sustainable growth.

    “Our work continues and we renew the pledge to do it with diligence, and the firm commitment it deserves,’’ he said.(NAN)

  • Reps, IMF meet over recession, 2017 budget

    The International Monetary Fund (IMF) and the members of the House of Representatives meet on Thursday over the biting economic recession and the 2017 budget.

    The IMF team led by Mr. Amine Mati, Senior Resident Representative, African Department, during an interactive session with the joint House Committee on Finance, Appropriation and Aids, Loans and Debt Management, expressed its readiness to provide necessary support for the ailing Nigerian economy.

    Mati said the IMF conducts annual economic assessment for all member countries to look at the challenges and assess the economic situation.

    He said: “We discuss with the governments what are their policy initiatives. We actually discuss with all stakeholders, which is why it is  important to come and talk to you, the Senate, civil societies, private entities, banks, financial and non-financial entities to try to get a sense of what is happening in the economy and try to assess the situation, discuss the outlook and then have some policy recommendations for discussion.

    “This is an assessment that is done every year. We are trying to finish this mission next week and then hopefully present the report to our board on March 24 and then the report will become public.”

     

     

  • IMF, World Bank obsolete, says Okonjo-Iweala

    IMF, World Bank obsolete, says Okonjo-Iweala

    Nigeria’s two-time Finance Minister, Dr. Ngozi Okonjo-Iweala,  yesterday said the World Bank and the International Monetary Fund (IMF) were no longer ‘fit for purpose’.

    Speaking at the World Economic Forum in Davos, on the theme: Who can lead a Multipolar world?, she called on the Bretton Woods institutions to adapt to the new world and prepare for the realities of the future.

    She said: “Coming on to the economic institution, I think if we didn’t have them, the global institutions will need to invent them; we still need those institutions, but the problem is that now they are not fit for purpose.

    “They are not following the changes that are  happening faster. One, on the different economic shares, two, one the fast move of knowledge and technolog; the fact that the world and the workplace is changing very fast.

    “We need a global covenant system that would help  developing countries also adapt faster. So it is anomalous not only in terms of the leadership  of the institution, but also in terms of the shares of different countries in these institutions.

    “You cannot have a situation where smaller European countries have a greater share in, say, the World Bank or the IMF than China or India.”

    The former vice-president of the World Bank was joined by the Dean of the Lee Kuan Yew School of Public Policy of the National University of Singapore, Kishore Mahbubani,.

    Mahbubani, who spoke before Okonjo-Iweala, called on the United Nations (UN) to evolve and change its structure, which was built 70 years ago.

    He said: “The West believes it can continue to dominate. My favourite example, Ngozi, hope you don’t mind me saying this, is that the Europeans believe that the head of the IMF must be European, and the head of the World Bank must be American. Excuse me, those rules were made in 1945, in a different world.

    “You still haven’t had a single Asian or African run these places, clearly these rules are out of date…and that is the core of the problem we face.

    “The composition of the UN Security Council: One of the most provocative things I say is that the United Kingdom (UK) and France are only member of the Security Council only because they won World War II in 1945. Surely it is time for UK and France to make way for India, or Brazil or Nigeria.”

    When it was her turn to speak, Okonjo-Iweala said: “Just to follow up on what Kishore just talked about. If you look at the fact, in terms of contribution to economic growth, emerging countries are contributing more than 50 per cent to global growth.

    “President Xi said it, China alone is contributing 30 percent. The global south is playing a very important role already, the frustration is that these role is not being recognised.

    “There has been evolution of systems to move us from a system of the G-7 to G-20, but even the G-20 leaves out significant important countries. We need a global covenant system that recognises the contribution of developing countries in a much more robust way.”

    She said the systems needed to be adjusted, so that countries could feel an ownership of these institutions. She also said the institutions themselves needed to be adjusted to recognise that knowledge is moving really very fast.

  • I was removed in 1985 for ignoring IMF, World Bank advice- Buhari

    I was removed in 1985 for ignoring IMF, World Bank advice- Buhari

    President Muhammadu Buhari on Friday recalled reasons for his removal as military Head of State in 1985.

    According to him, his refusal to adhere to an advice from the IMF, World Bank to devalue the naira and increase prices of fuel and flour, led to the coup against him.

    Buhari spoke on Friday night when he was hosted in Abuja by the Army at the Guards Brigade Regimental Dinner and presented with the captured Boko Haram flag.

    ” I refused and gave my reasons and the next thing I knew I was removed and detained for three and half years.

    “As a civilian president I will do my best and I’m telling you all these because you are part of the leadership of this great country and God willing we will remain great.”

    President Buhari, who narrated his early military life in Abeokuta and subsequent redeployment to Zaire (now Congo), said he was almost killed while on duty even before getting his first salary as an officer.

    He said stated he was conversant with the problems of the military having spent over 25 years in the service.

    President Buhari has challenged the Nigerian Army to ensure the unity of the country despite what he described as “political madness in the North East, the Niger Delta or in the East” of the country.

  • IMF approves renewal of New Arrangements to Borrow

    IMF approves renewal of New Arrangements to Borrow

    The Executive Board of the International Monetary Fund (IMF) has approved the renewal of the New Arrangements to Borrow (NAB) for a five-year period starting November 17, 2017.

    The NAB is a set of credit arrangements between the IMF and 38 member countries 1 and Institutions, including a number of emerging market countries. The NAB is used in circumstances in which the IMF needs to supplement its quota resources for lending purposes. Once activated, it can provide supplementary resources of up to $255 billion to the IMF.

    It is also meant to forestall or cope with an impairment of the international monetary system or to deal with an exceptional situation that poses a threat to the stability of that system.

    The NAB entered into effect on November 17, 1998 and has been renewed continuously, with the current five-year NAB period ending on November 16, 2017. The approved renewal of the NAB, together with the IMF membership’s commitments to bilateral borrowing  will help maintain the IMF’s lending capacity and provide confidence that the IMF will continue to address the needs of its membership.

    Most resources for IMF loans are provided by member countries, primarily through their payment of quotas. In addition, borrowing provides a temporary supplement to quota resources and has played a critical role in enabling the Fund to provide exceptional financial support to its members during the global economic crisis. Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds.

    Among the leading contributing nations and institutions in SDR millions Special Drawing Rights), are  Japan, 33,500; USA, 28,202; UK, 9,479; DeutcheBundesbank, 12,850, Italy, 6898, Saudi Arabia, 5,652 and China, 15,860.

     

  • Recession: Senate seeks more support from IMF

    Recession: Senate seeks more support from IMF

    The senate yesterday solicited more support and closer partnership with the International Monetary Fund (IMF), in efforts to address its economic challenges.

    Deputy Senate President, Ike Ekweremadu, made the appeal when he received, on behalf of the Senate President, Bukola Saraki, a delegation of the African Department of the IMF, which paid a courtesy visit to the Senate.

    He thanked the IMF officials for their support to Nigeria, and said the country needed more support and collaboration of the IMF particularly at this challenging period in the nation’s history.

    He said: “The IMF has shown keen interest in the development of Nigeria. We believe that we need greater collaboration at this time of our challenges and we also believe that whatever support and technical assistance we are going to get will be tailored to our own needs, which is also peculiar to us, because every country has its own challenges and peculiar circumstances.

    “We believe that working together and taking cognisance of our peculiar circumstances, we will be able to find solutions to our problems. We will work together to build a country where food, shelter and other basic needs are affordable for all.”

    The new Director, African Department, IMF, Mr. Abebe Selassie, said he was in Nigeria to have a firsthand assessment of the country and to discuss the economic challenges.

    He reassured the Senate that the global body would work hand-in-hand with the country to address the nation’s economic challenges.

     

  • IMF sees sub-Saharan Africa’s economic growth lowest in 20yrs

    •Seeks urgent action for rebound

    The International Monetary Fund (IMF) yesterday called for prompt policy action to secure economic  rebound and growth in sub-Saharan Africa. It warned that the continent was set to witness its lowest growth level in more than two decades.

    According to its October 2016 Regional Economic Outlook for sub-Saharan Africa titled: Multispeed Growth, average growth in the region was projected to be just 1.4 per cent—well below population growth, and in sharp contrast to the high growth rates of recent years.

    Its Director, African Department, Abebe Aemro Selassie, said the slowdown reflects two broad factors.

    He said: “The external environment facing many of the region’s countries has deteriorated, notably with commodity prices at multi-year lows and financing conditions markedly tighter. In addition, the policy response in many of the countries most affected by these shocks has been delayed and inadequate, raising uncertainty, deterring private investment and stifling new sources of growth.”

    Mr. Selassie , however, cautioned against a swing from the strong optimism of recent years to excessive pessimism today.

    He said: “The fuller picture is one of multi-speed growth, with the aggregate growth number masking considerable diversity across the region. Indeed, most non-commodity exporting countries—representing close to half of the countries in the region—continue to perform well, with countries such as Côte d’Ivoire, Ethiopia, Senegal, and Tanzania foreseen to continue to grow at more than six per cent. Most commodity exporters, however, are under severe economic strain.

    “In particular, the near-term prospects have worsened significantly in oil exporters in recent months, as the pain from the initial oil price shock is now spreading to the entire economy, and the slowdown risks becoming deeply entrenched. Conditions in many non-oil commodity exporters also remain difficult, including in South Africa where output expansion is expected to stall this year.”

    Looking ahead, Mr. Selassie noted that a modest pick-up in economic activity is likely, provided strong policy action is taken. “Subject to reforms being initiated quickly in the coming months, growth would recover close to three per cent in 2017. But to make this happen, the hardest-hit countries, especially oil exporters, need to act promptly.

  • IMF: Nigeria’s economy overtakes South Africa’s, Egypt’s

    IMF: Nigeria’s economy overtakes South Africa’s, Egypt’s

    A new report from the International Monetary Fund (IMF) has projected Nigeria as Africa’s biggest economy, in spite of its current challenges.

    Nigeria is placed ahead of South Africa and Egypt which are second and third respectively.

    In August, Nigeria was reported to have lost its position as Africa’s biggest economy to South Africa, following the recalculation of the country’s Gross Domestic Product (GDP).

    But the IMF’s World Economic Outlook for October, puts Nigeria’s GDP at 415.08 billion dollars, from 493.83 billion dollars in 2015, while South Africa’s GDP was put at 280.36 billion dollars, from 314.73 billion dollars in 2015.

    According to the report, Egypt’s 2016 data is not available, but its 2015 size remained at 330.159 dollars while that of Algeria, one of the largest economies on the continent, is put at 168.318 billion dollars.

    The United States, China and Japan maintain their spots as the largest economies in the world, ahead of Germany, United Kingdom and France.

    According to a review in September, the current economic recession will outlast 2016, with a Gross Domestic Product (GDP) contraction of 1.7 per cent.

    The IMF had predicted that Nigeria’s economy would grow away from a recession in 2017.

    The country last witnessed a recession, for less than a year, in 1991, and experienced a prolonged one that started in 1982 and lasted until 1984.