Press Release No. 05/110

Press Release: Statement by IMF Managing Director Rodrigo de Rato at the Conclusion of His Visit to Nigeria May 17, 2005

May 17, 2005

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Abuja:

"I am happy to have had the opportunity to visit Nigeria again on this my third visit to Africa as the Managing Director of the International Monetary Fund. It was my privilege to meet with President Olusegun Obasanjo and his economic team, Ministers of Finance of the Communauté Économique et Monétaire de l'Afrique Centrale (CEMAC) region, and with President Omar Kabbaj of the African Development Bank (AfDB). I have had the honor of addressing a symposium on capacity building for achieving the Millennium Development Goals in Africa. I also had the opportunity to see the valuable work in training and rehabilitating the desperately poor undertaken by the Bwari vocational rehabilitation center.

"In my discussions with the President Obasanjo, I was gratified by the positive sentiment toward the IMF's work in Nigeria and that—in his view—the Fund had played a positive role in supporting Nigeria's reform efforts. The President also requested the Fund to continue to play this role in the period ahead. I told the President that I continue to be impressed by the Nigerian government's strong commitment to comprehensive economic and social reforms. And I commended the President for the prudent management of the economy in 2004 under his leadership. Fiscal restraint, along with a tight monetary policy and improved terms of trade, have helped strengthen Nigeria's external position and restore macroeconomic stability.

"The President and I also had a wide-ranging exchange of views on issues confronting the African Union.

"From my discussions today, I was pleased to learn that the authorities intend to execute fiscal spending so as to maintain macroeconomic stability, which will require careful monitoring and a high level of coordination and discipline.

"We noted that more of the burden of keeping inflation under control falls on the Central Bank of Nigeria (CBN). The CBN should implement a monetary program consistent with its disinflation objectives and allow short-term interest rates and the exchange rate to adjust as needed.

"Regarding debt relief from the Paris Club, the President is hopeful a mutually agreeable solution that is satisfactory to Nigeria would be reached soon. I noted that Nigeria's strong economic performance augurs well for reaching such a solution, and that the IMF would be prepared to provide an assessment letter to this effect, if requested by the Paris Club.

"I am pleased that I could return to the AfDB Annual Meetings today after having been a Governor of the Bank and having had the honor to host the first meeting of the AfDB outside Africa in Spain, in 2001. In my keynote address to the Bank earlier today, I spoke of three areas that merit particular emphasis in terms of future capacity building: public resource management, financial system development, and trade reform.

"In my meetings with the CEMAC ministers, we discussed the critical importance of strong institutions to economic development and growth, both in developing and implementing home-grown economic polices. The IMF is committed to further capacity building in Africa in our core areas of expertise. Several CEMAC ministers raised the desirability of a technical assistance center in the CEMAC region. I noted that the discussion today was an important input for the forthcoming deliberations in the Fund on the future of regional technical assistance centers in the light of budgetary constraints."