Christine Lagarde, the Managing Director of the IMF was in Nigeria. The last time the global financial intervention agency, IMF beamed its gaze on Nigeria (1985-6), was to convince government to embark on financial reforms including devaluation of the naira. I have heard many commentators lament that Nigeria's economy is in dire straits similar to the situation in the mid-1980s compelling then army general, Muhamadu Buhari to oust the democratically elected government of Shehu Shagari, which was accused of gross irresponsibility in governance.
In light of the centrality of the need to seek alternative means of generating revenue since robust oil income has become elusive, it behooves government to enlighten Nigerians, who are wary of foreign loans, by making a connection between TSA and IMF, which I reckon is expected to render technical assistance to Nigeria in the implementation of the TSA and facilitate more efficient and effective tax collection to boost government’s revenue earning capacity which is quite commendable.
Viewed from the prism of the stance of Nigerians against IMF loan during the reign of army general, Ibrahim Babangida, which toppled General Muhamadu Buhari's regime some 30 years ago, a thorough understanding of the role of IMF in Nigeria by members of the public cannot be taken fore-granted. Keep in mind that IBB initiated a public debate on whether Nigeria should take IMF loan or not, resulting in Nigerians opting to say a resounding no to IMF and yes to a home grown Structural Adjustment Program, SAP in 1986.
Arising from the above, the inherent social value accruable from articulating clearly the presence of IMF in Nigeria needs not be overemphasised. Minister of Economic Planning, Udoma Udo Udoma, responsible for crafting the budget, has affirmed the rough road Nigerians are bound to travel economy-wise in 2016 and beyond, just as finance minister, Kemi Adeosun, charged with managing the economy, has also asked Nigerians to brace up for the grit and grind on the road ahead which will not be lined with petals and roses.
As evidence of their plan to rely on borrowed funds, they have factored into their whooping N6.1 trillion budget proposal to National Assembly, about N1.9 trillion or approximately 30% of the total budget to be sourced from loan. Whether the credit facility would be from the IMF or regular local and international financial institutions like investment bank, Goldman Sachs etc is yet to be determined as neither the planning or finance ministers have offered explanations.
However, the existence of some critical economic and social development enablers in Nigeria makes the prospects of the nation's economy surviving the global commodity price crash possible by leveraging on credit, provided the borrowings are properly applied in job creating and revenue yielding projects.
Such growth fundamentals are (1) abundant natural assets - sixth largest oil producer in OPEC (2) 60% of population are youth and therefore of productive age with capacity to be translated into veritable workforce (3) burgeoning middle class and as such, large consumer market with potential robust purchasing power (4) new government with huge appetite for change and therefore without inhibition for reforms (5) lack of or decaying infrastructure therefore a huge opportunity for international investors to stake their funds in new roads, electricity, power, agriculture, housing and transport infrastructure with verifiable and rapid return on investments (6) stable democracy that has transited peacefully from one ruling party to another without the much anticipated violencece.etc
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