Why Nigeria’s economy is under severe economic stress – Christine Lagarde

By Joshua Amaugo January 13, 2016 13:06

Why Nigeria’s economy is under severe economic stress – Christine Lagarde

The Managing Director of the International Monetary Fund, IMF, Christine Lagarde, on Tuesday January 12th, 2016 described Nigeria’s economy as being under severe economic stress considering the consistent fall in oil prices at the international market which hovers around $28 to $30 per barrel with a future projection of $18 per barrel for the whole of 2016.

The IMF boss made this known at the wake of the controversy surrounding the missing 2016 budget submitted to the National Assembly by President Muhammadu Buhari.

Lagarde at a farewell symposium for the Governor of the Central Bank of France, Christian Noyer, in Paris said among the countries so far visited, Nigeria and Cameroon are among countries in the world that have been affected by the slump in oil prices.

“Many commodity exporting emerging and developing economies are under severe stress, and some currencies have already experienced very large depreciations.

“We have all seen it in Latin America, and I saw it first-hand last week in Nigeria and Cameroon – two countries that are hit hard by lower oil prices and domestic fragilities.

“So, where does this leave economic policy? And what can the other 15 per cent of the global population do for global growth and to help emerging and developing countries adjust to the new global environment?”

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“So, why focus on emerging and developing economies? It is worth remembering that these countries are home to 85 per cent of the world’s population.

“Today, emerging and developing economies account for almost 60 per cent of the global GDP, up from just under half only a decade ago.

“On current forecasts, the emerging world will converge on advanced economy income levels at less than two-thirds the pace we had predicted just a decade ago. This is cause for concern, clearly, the 85 per cent matter for the global economy.

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“I have many times called for economic policy upgrades in our member countries. But beyond putting individual countries’ houses in order, there is more that needs to be done. We need a policy upgrade at the global level,” the IMF boss said.

Meanwhile the nation’s foreign reserve has continued to stumble as it stood at $28.782bn on Monday, January 11, 2016, down from $28.895bn on January 8 and $28.931bn on January 7, according to the CBN data.

See: 2016 budget threatened, as foreign reserve falls by $92m

The Nigerian economy is currently struggling to find its footing as no concrete government policies have been put in place. However, the 2016 budget is expected to rejuvenate the economy if it is properly implemented in line with global best standards.