MEMORY LANE... Interesting read. BUHARI AND THE NIGERIAN ECONOMY BUHARI made it clear to all that IMF was never up for consideration and therefore not even an option. He inherited huge debt from Shehu Shagari and so tried out the IMF route but to his shock they wanted to bring Nigeria to her knees. IMF laid down rules upon rules coupled with the huge debt the government would acquire afterwards. Some of them are as follows, The government must remove its subsidy on petroleum (which currently GEJ would gladly implement). Nigeria must curtail its expenditure. The Nigerian Government must rationalize its tariff structures. It must put a freeze on its wages. It must put a total end of non-statutory transfers to State governments. The Federal Government must at least institute a 30% raise on interest rates—Buhari’s administration resisted this because the decline in its revenue earnings and its debt obligations made it almost impossible to raise interest rates without triggering inflation. AND THE BIG ONE: The IMF demanded a minimum of 60% devaluation of the Almighty Naira then. Buhari refused. The implication of devaluation was that Nigeria would pay more to import lesser quantity of goods than it did prior to any devaluation. It would also export the same amount of oil it exported before any devaluation and derive lesser revenue than it received before any devaluation. The impact of these debt payments would have harsher effect on the citizenry if the naira was devalued...
Posted on: Tue, 09 Dec 2014 07:38:20 +0000
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