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Sunday 10 January 2016

IMF Lagarde abandons Nigeria

Latest developments show that the noose is tightening around Buhari and his government, and that the contraption called Nigeria is dying faster than a great number of people think. Developments, both economic and political, show that the country is seriously being squeezed out of existence. But unfortunately for Nigerian people; the government is rather deceiving them with its anti-corruption scam rather than telling them the truth about the state of their country’s economy.
Nevertheless, the truth will soon hit them like thunder when they realized the real reasons why International Monitory Fund (IMF) Managing Director, Christine Lagarde, visited their country. Then, they would realize that she did not visit to discuss Nigerian economy or for a loan programme for their dying country. They would know that Lagarde’s major reason for visiting was to repatriate funds of foreign airline operators in Nigeria (mostly European), whose funds were trapped in the country.
When she spoke, her words were explanatory enough if Nigerians were attentive enough to understand. “Let me make it clear that I’m not here, or is my team here to negotiate a loan with conditionalities, we not programming negotiations” she said.
Honest words! She was rather in Nigeria for something more important to her country, France; and to other western Countries operating flights in Nigeria. However, most expectedly, many Nigerians might not have understood her words or its implications.
Her coming was necessitated, especially, by Nigeria’s new policy on foreign exchange transfer, which came on stream with the coming of Muhammadu Buhari as Nigeria’s President, and which made it impossible for many foreign airlines to access their funds in Nigeria. At the end of 2015, the funds had risen to stand at a whopping sum of about $470 Million. Buhari’s government feared that removing such huge amount from Nigerian economy would deal a heavy blow on the country’s foreign reserve and finally drag the country to its knees. As a result, his government held unto the money.

It is interesting to note that this new policy was unilaterally foisted on the country by Buhari who had become the sole policy formulator and executor for the Central Bank (Godwin Emefiele, the supposed Central Bank Governor, has long become just a figure head). As a matter of fact, Buhari is today the official Minister of Petroleum, but unofficially the Governor of the Central Bank and the Minister of Economic Planning.
The policy was targeted at Biafrans who had upped the tempo of their agitation to exit from Nigeria. It was meant as a reprimand and to dissuade them from going further with their quest. But Buhari and his fellow Islamists in the Nigerian government did not know that it would affect the country’s economy so negatively because of the key roles Biafrans play in the Nigerian economy. Before the last quarter of last year, carriers in Nigeria have been complaining about the stifling policy that Buhari introduced. By October, they actually started restricting fares in some areas of the country, which caused fare hikes.
Perhaps, by the time Nigerians realized all the foregoing, then they might be able to understand that Lagarde, and the IMF she heads, were not interested in putting any fund as loan into the Nigerian economy. She was cagey enough in delivering her message to the people during the visit, because she knew very well that Nigeria was a dying, if not a dead case. She had said: “Frankly, given the determination and resilience displayed by the presidency and his team, I don’t see why an IMF programme is going to be needed.”
She followed it up with several other challenges to the Nigerian economy topmost of which is “insecurity and regional tensions”, which she said were building up very fast. By making that assertion, she was indirectly speaking about Biafra that is on the threshold of exiting from the expired contraption. She understood the huge and unprecedented demonstrations Biafrans have been staging at home and across the world. She knew many countries have taken notice and are discussing the issues earnestly.

Who then would put his/her money in an economy of such uncertainty; splintering in conflicts and tension? The most rational thing would be to try and get out fund in such an economy before it collapses. Now, by not pledging any loan for Nigeria, Lagarde did very well for her employers. It then means she heeded the several warnings Biafrans have been giving to the world on the dangers of investing in Nigeria, or granting loans to a country that is existing illegally, having expired since 2014.
It was obvious how irked the Senate President, Bukola Saraki, was about the whole development when he called for the relaxation of the Buhari’s new policy. He used the opportunity to canvass for low interest loans because, according to him, “this is an area where we need the financial support and technical assistance of IMF”.
But that was not why Lagarde visited Nigeria.

By Tim Tochukwu

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