Wednesday, December 21, 2011

The IMF Warning for Nigeria...

As the Yoruba will say - "Ewu nbe l'oko longe, longe funrare ewu ni". Simply interpreted, it means there is problem in the horizon. Just this Tuesday, the IMF Managing Director Christine Lagarde was in Lagos talking to the leaders of industry in a Ministry of Finance/ NESG sponsored Roundtable. I was there, in Eko Hotel amongst many other captains of Industry.

In her informed views, which she termed as collective wisdom, there are great dangers in the horizon and except Nigeria take appropriate measures now, we are not immuned from the happenings in the European Economy which has the ability to be transmitted by such channels of contagion as (a) Trade; (b)Foreign Investment and (c) Remittances.

What should Nigeria do? She advised that Nigeria needs to tighten its budget and plug wasteful spending. Increase the external reserve, that has dwindled from the 2008 levels, especially through the Sovereign Wealth Bond.Nigeria is encouraged to balance its fiscal adjustments with the need to provide growth friendly policies to act as a catalyst for medium to long term sustained growth. All htese should be done in addition to bringing down inflation.

The IMF crystal ball predicts gloom for the global economy and unlike in the previous meltdown, the economic power houses of China, India and Brazil will not be available to act as buffer to the long persistnet resilience that may be witnessed.

For the detailed report, please visit