IMF in Nigeria

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, arrived in Nigeria on Monday. During what will be a four-day visit, meetings with President Muhammadu Buhari, Minister of Finance Kemi Adeosun, and the Central Bank Governor Godwin Emefiele, as well as principal representatives of the National Assembly, civil society, business leaders and women, have already taken place.

Official agenda

The IMF is looking for an opportunity to strengthen the Fund's partnership with the largest economy in sub-Saharan Africa. Because of the impact of low oil prices there are possible economic challenges. The IMF had forecasted a 4% growth rate for Nigeria's Gross Domestic Product (GDP) in 2015, but in reality it was 2.25 percent lower than the planned projection.

The IMF head is expected to visit Cameroon after her visit to Nigeria. In Cameroon, Lagarde will meet President Paul Biya and his economic team. Also planned is a meeting with Finance Ministers from the six member countries of the Economic and Monetary Community of Central Africa (CEMAC), delivering a speech to the group on January 8.

A field for economic expansion

Africa is a focus of interest for many global actors. The U.S., China, and Gulf states have also invested in region. For example, in 2015 Kuwait funded about $4 billion to African countries for different projects. The 10th biennial U.S.-Africa Business Summit is planned for Feb. 2016 in Ethiopia. The U.S. government agency Millennium Challenge Corporation provided a $256 million grant for institutional reforms, infrastructure development and policy.

How it works

In the 90's, the IMF effected programs of structural adjustment in countries of Asia, Africa, Latin America and the former Soviet Union. As a result, economies of countries were destroyed and their sovereign debt increased several time over.

Now the IMF is working on a more "soft" way. As Lagarde said, the IMF will undertake a review and audit starting next week "to really assess whether the financing is in place... whether the debt is sustainable, borrowing costs are sensible and what must be put in place in order to address the challenges going forward".

After proposed programs are agreed to, they are usually signed between the IMF and the political elites of the target country. In the context of their conventional obligations, the political elites are often directed towards new opportunities to work directly for the IMF in the future.

IMF
Nigeria