Okonjo-Iweala, IMF chief: US budget row may hurt NigeriaVISIT NATION NEWS FROM the International Monetary Fund (IMF) meeting in Washington yesterday came a warning that the budget row in the United States (US) may hurt Nigeria if it deepens.
Minister of Finance and Coordinating Minister of the Economy Dr Ngozi Okonjo-Iweala and IMF Managing Director Christine Lagarde said the consequences of the row would be dire for Nigeria and other countries which rely more on foreign trade for sustenance.
They spoke at separate meetings at the on-going IMF/World Bank meeting.
Dr Okonjo-Iweala, who addressed the world press with the Secretary-General of Commonwealth, Kamalesh Sharma, and the Prime Minister of St. Kitts, Densil Douglas, on the outcome of the Commonwealth Finance Ministers’ Meeting, said what was happening in the US could create uncertainty for people in developing and emerging countries. The face-off, she said, could affect Nigeria’s $500million Bond and the Euro Bond, adding that if the crisis lingers, it would also affect interest rates.
She said there was need for a stable and regulated international system, adding that the US government’s budget debate and the debt must be “urgently “resolved so that we can have stability in our financial system.”
Earlier, Lagarde said the US government’s shutdown, if not quickly solved, would create volatility and uncertainty in the rest of the world, warning that Nigeria, as an oil exporting country would be affected. “The shutdown will affect price of oil, and because Nigeria is an oil exporting country, she’ll be affected.”
While admitting IMF’s constraints in intervening in the face-off between President Barack Obama and Congress, she urged the parties to put their house in order because “the failure to raise the debt ceiling will cause severe damage to the US economy, as well as have global consequences.”
She said was not for the IMF to interfere, adding: “we look at the economic consequences of actions taken elsewhere, we engage in dialogue and look at the potential risks.
Mrs. Okonjo-Iweala, who spoke on a wide range of issues on the outcome of the Commonwealth Finance Ministers’ Meeting, said the body was considering looking inwards in sourcing for funds to address some of the region’s development concerns.
She said there was need for Domestic Resource Mobilisation, adding that such efforts would require, in the case of Nigeria, the strengthening of tax collection.
She said the Federal Inland Revenue Service was doing a great job in this regard, stressing that there was need to do a proper audit on whether companies that provided for tax in their books duly remitted such to the government as required.
On the Petroleum Industry Bill (PIB), she said its passage would provide an environment for the oil companies to operate in a more certain and clear terms of engagement, arguing: “Even if it is not perfect, it will provide an environment for our oil companies to have more certainty. I know the oil companies don’t like it too much because the fiscal regime is tougher on them in that PIB than what they had before, but we are urging them to support it, so that we get it through, and then later on, we can begin to amend, but the way we have it now, we really need it to go through.”
She said the PIB’s passage would enable the government to commercialise the Nigerian National Petroleum Corporation (NNPC), and make the sector to be more transparent.