Published On: Tue, Oct 11th, 2016

Nigeria looks unlikely to take IMF loan



LAGOS, (CAJ News) – ANALYSTS do not foresee the administration of President Muhammadu Buhari borrowing funds from the International Monetary Fund (IMF) despite the country’s economic predicament.

The sentiment comes after IMF managing director, Christine Lagarde, recently said at the annual meetings of the Fund and World Bank in Washington that concessional loans were available at zero interest rates.

The offer might be tempting for Nigeria, which is going through a recession and its economy performing at its worst in years.

“Nonetheless , we do not think that this will be the first Nigerian government to borrow from the Fund,” First Bank of Nigeria stated in its markets update.

“Resistance was ideological when structural adjustment was central to IMF policy in the 1980s and 1990s, but has become more an issue of purported sovereignty.”

The financial firm noted Nigeria had IMF credit agreements in the past, the latest being a stand-by in August 2000, but never drawn upon them.

FBN argued the conditionality attached to an IMF loan was seen as more onerous than that in a credit from other multilateral agencies.

“Exchange-rate policy and retail pricing of fuel are two contentious areas,” FBN stated.

“The FGN has this year devalued and raised the ceiling for petrol (gasoline) prices. It acted in both cases not out of conviction but because there was no longer an alternative.”

CAJ News

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