IMF disagrees with Buhari, insists on currency devaluation

The International Monetary Fund (IMF) has once again called on the Nigeria government to devalue its currency (Naira) by adjusting the official exchange rate of N199 to a dollar to a more market determined exchange rate.

The Washington-based body said in a statement on Wednesday that Nigeria’s economy was suffering from the impact of a sharp decline in oil prices, adding that naira devaluation is a necessity.

“Nigeria is facing the impact of a sharp decline in oil prices. Eliminating existing macroeconomic imbalances and achieving sustained private sector-led growth requires a renewed focus on ensuring the competitiveness of the economy”

However, IMF’s position differs from that of president Mohammed Buhari, who has insisted that Nigeria would not devalue its currency.

A former Secretary-General of the Commonwealth of Nations, Emeka Anyaoku, has warned that naira devaluation could trigger an economic disaster for the country, urging Buhari not to yield to pressure to devalue the currency.

IMF statement was released after its 2016 Article IV mission to Nigeria.

The body noted that the team met with Vice president Yemi Osinbajo, Minister of Finance, Kemi Adeosun, Minister of Budget and Planning, Senator Udo Udoma and the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele.

IMF Managing Director,Christine Lagarde during her visit to the country in January had called on the Nigeria government to devalue its currency in order to address important economic challenges most importantly the impact of low oil prices.

According to the fund, foreign exchange restrictions introduced by the CBN to protect reserves have impacted significantly on segments of the private sector that depend on adequate supply of foreign currencies.

Anyaoku said those calling for official devaluation of the naira need to come up with a good answer to Nigeria’s current problematic situation with its currency.