There is no doubt about this assertion; International Monetary Fund (IMF) is adamant and committed about being an important entity on Nigerian economic and financial scene. IMF the self-appointed chief financial adviser to Nigeria has made its annual econometric forecast on country’s economy. IMF the bearer of the depressing news is predicting that Nigerian economy will slow down from its above 8 percent growth to 6.9 percent, thus resulting to a GDP lowered by 17.9 percent. Still on the bad news IMF said the economic slowdown will be accompanied with higher inflation.
IMF do not produce any commodity or provide a recognized service that contribute to growing of the country’s economy. Rather IMF officials have managed to have the ears of the managers of the economy simply on the ground that it is a global monetary and financial institute. But Nigeria must ask herself what has IMF done for them lately.
What has IMF done for Nigeria? That is an easy answer; lately IMF has advised Nigeria to devalue her currency, Naira, without giving a logical reason for the advice. For a currency that is already weakening by rising inflation to be devalued is for Nigeria to be inviting economic woes voluntarily. Nigeria with undiversified economy with crude oil as a major export to venture to the path of currency devaluation is trekking to road of higher inflation, higher prices of essential commodities and slows down of economic output.
IMF assertion and extrapolation on the Nigerian economy was not elaborated with a particular point of view, principle, proofs and genesis of the declaration. On what logic and economic basis are the elites of IMF making this forecast? This is not to cast a doubt or a shadow on their forecasting, but economics is not based on natural laws because it is a social science. In econometric forecasting nothing is written on stones due to the malleability of economic principle, therefore there is a quantifiable probability that IMF forecasting may not come true.
Nigerian economic and financial gatekeepers must take this with a grain of salt, as an opportunity to review their economic inventory and make necessary adjustments where needed. But one thing that they cannot afford to do is to swallow it as a given, without ready to make their research and analysis. Nigerians must not say ok! And sit down waiting for the rough times to come. The country must be pro-active and be charge of their economic destiny not waiting for IMF to tell what to do.
The point must be made perfectly clear that Nigeria should listen to IMF by separating the grain from the chaff. In some aspects of Nigerian economy IMF has some good points. In terms of cutting down on spending and slowing down on the excessive borrowing, there are truths to that. But in some cases when rising spending becomes inevitable as resources are being invested on the people with regards to providing education facilities and social infrastructures, then it will be a return that will eclipse the down side of increasing spending. There are investments on the society and the people that may have short term effects including budget deficits but at the long run it will aid to strengthen the nation by increasing productivity and wellbeing.
Instead of IMF over emphasizing about economic slowdown in Nigeria, it should also look at the positive development and growing maturity of the country. IMF can put more emphasis on the economic correlation between increasing investments and good elections. IMF can use their global megaphone and tell the rest of the world that credible election held in Nigeria shows stability and continuation, that Nigeria is truly ready to do business with the world. That can help to attract foreign investments thus averting economic slowdown.
IMF should and can significantly impact the country positively by counseling Nigeria on how energy conservation and its availability can help to checkmate inflation and trade deficits. When Nigeria has ample electric energy to operate their local industries that can ultimately aid to retard and stop excessive and unnecessary importations.
The point to be made is that IMF can go beyond the gateway of financial control. But also IMF can enhance its responsibility as a financial disciplinarian by becoming a cheerleader to a documented progress in a nation and that can in turn bring in goodwill and economic gains.