OPINION: IMF Chief, Christine Lagarde's visit to Nigeria is both Timely and Necessary. By Abdulmumin Yinka Ajia

Date: 2016-01-06

In the light of recent public commentaries by concerned Nigerians regarding Christine Lagarde's visit to Nigeria, I would like to say as a Nigerian trained economist that there is absolutely nothing wrong in the visit, I would also add that the visit couldn't have come at a better time - especially given the present acute financial distress occasioned on the one part by the crash in oil prices and on the other by the stripping of national assets and outright theft of public funds by the ruling elites from the major political parties over the last 16 years.

In spite of my position, I acknowledge the skepticism prevalent in emerging markets towards the IMF. This skepticism has been on going over the last 45years since the collapse of the Bretton - Woods system and the emergence of a more assertive IMF. There have been and still ongoing a dichotomy between the major economic powers that are behind the IMF and the periphery economies of the emerging markets that are sometimes recipient of IMF interventionist policies. Despite this schism, the IMF is not totally useless and as the global lender of last resort, its intervention while sometimes a bit hard for emerging market politicians to swallow are actually on further scrutiny sound and achievable initiatives.

When emerging markets face a balance of payment crises and the IMF intervenes, it is important that the government bureaucrats charged with the task of negotiating a fair deal with the IMF technocrats are up to speed with the issues involved.

The most glaring failure of IMF intervention in Nigeria till date has to be Babangida's structural adjustment program (SAP) of 1986. Let us note however that during the same period, other emerging markets of the time like Singapore and other Asian tiger economies equally applied SAP and came out economically stronger, it is obvious that the failure of SAP in Nigeria is actually more of Babangida's duplicity than IMF's role in crises resolution.

This is not to suggest however that the IMF is completely without fault, after all, since its inception shortly after World War II, the IMF has undergone a number of reforms and many of these reforms came about because emerging markets insist to be treated fairly as they restructure their balance of payment issues and debt during a crisis.

Nigeria is not an island unto itself and we need to continuously partner and dialogue with other nations and global institutions. The current IMF's intervention in Nigeria while it may not be the overall answer to our economic dilemma, it is yet a right step in the right direction; I am confident that under the leadership of President Muhammadu Buhari, Vice President Yemi Osinbajo, Finance Minister, Kemi Adeosun, the cerebral Babatunde Raji Fashola, the equally cerebral AbdulRahman Dambazzau and a plethora of egg heads in and out of government associated with this administration, Nigeria can get a fair interventionist deal from the IMF.

Abdulmumin Yinka Ajia is of the Department of Global Leadership, College of Business, Indiana Institute of Technology, Fort Wayne, Indiana, USA. The writer can be reached at abdulajia@yahoo.com, follow me on twitter @AbdulAjia

 


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