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FG should make refineries, oil assets work for Nigerians-IMF

*Insists on tight monetary policy, structural reforms

By Emeka Anaeto and Babajide Komolafe, in Bali Indonesia

International Monetary Fund (IMF) has called on the federal government to make the nation’s refineries and oil assets work for the benefit of Nigerians.

The Fund also called for adoption of tight monetary policy, structural reforms and measures to boost the nation’s non oil revenue.

A picture taken on September 16, 2015 shows workers trying to tie a pipe of the first refinery in Nigeria, which was built in 1965 in oil rich Port Harcourt, Rivers State. The Port Harcourt refinery is Nigeria’s oldest, built in 1965, nine years after crude was first found under the marshy soil and creeks of the delta, where the Niger river meanders to the Gulf of Guinea. Refineries in nearby Warri and Kaduna in the north central region were built in the years that followed, while a new plant was added to the same site in Port Harcourt in 1989. In recent years, however, it became a byword for corruption, a murky, state-run body where billions of dollars in revenue apparently disappeared. AFP PHOTO

Managing Director, IMF, Miss Christine Lagarde, made this call addressing the press at the ongoing IMF/World Bank annual meetings in Bali Indonesia.

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Expressing her delight at the appointment of another female Finance Minister for Nigeria, Lagarde stressed that the federal government needs to increase non-oil revenue, noting that the country’s domestic revenue which is currently at 5.0 percent of Gross Domestic Product (GDP) is lower that what is required to address the socioeconomic problems plaguing the country.

She said: “Thank you very much. First,a point of observation. I am delighted that Nigeria has appointed, yet again, a female Finance Minister, and I welcome the meeting that I will have with her. But if she was to ask me, what is our policy recommendation?

“I would certainly start with a tight monetary policy, higher non‑oil revenue mobilization. I remind you—you know that probably inside‑out—that domestic revenue mobilization is 5 percent of GDP in Nigeria, and that is just way too low, relative to where Nigeria should be in order to address the issues of health, education, proper social spending on the people, and particularly the young people of Nigeria.

“That would certainly be a very strong recommendation that I would give her. And structural reforms that would probably include really making sure that the refineries and the oil equipment that is available in Nigeria works well and works for the benefit of Nigeria. That would be my recommendation.”

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Responding to the likely spill over of the trade war between the United States and China on Nigeria, Lagarde said: “In terms of spill overs, this is work that is constantly underway. It is to be found, if you will, in the Article IV that we produce under our bilateral surveillance. It is a tricky question because you have spill overs that are produced in very circumvallated ways and not just a direct spill over. But we are doing this exercise on a country by country basis, very often taking scenarios and hypotheticals that either are proven true or hopefully will be proven wrong.”


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