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Nigeria Rules Out IMF Loan Citing Increase In Non-oil Revenue

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The Nigerian government has ruled out getting a loan from the International Monetary Fund (IMF), saying the IMF loan may be unnecessary at this time when the country’s non-oil revenue profile was increasing.
The government said it would rather concentrate on developing home-grown solutions to its fiscal problems.
Minister of Finance, Kemi Adeosun, who disclosed this in an interview, said though the IMF loan is not bad, Nigeria does not need the fund’s borrowingprogramme and would rather pursue its own economic reform plan.
She said the federal government was aware that the IMF loan programme was a topic of “huge national debate,” but the country sees IMF as its last resort.
“For us, the IMF is really lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem, which is that major revenue source has lost so much value,” Adeosun told CNBC Africa.
The minister further pointed out that the government was already carrying out some of those reform programmes the IMF would have requested it to do.
“What IMF does for you is that it gives you programmes for reforms, we are already doing as much reform as any IMF programme would impose on Nigeria.
“Nigerians want to take responsibility for their future. We must have our home-grown, home-designed programme of reform, that Nigerians take ownership for, because they are painful reforms.
“When you go through this type of adjustment of your economy, these reforms are very painful, and they have to be home-grown. We have to take responsibility for this ourselves, so that when it succeeds, Nigerians would say; yes, we did this.
“I am not saying the IMF are bad, but I’m saying right now, we don’t see that need. We feel this is a problem Nigerians created and Nigerians will solve,” she explained.
Adeosun also told CNBC that Nigeria hoped to sign in the next few months a loan worth $1.3 billion from China’s Export-Import Bank (Exim) to fund railway projects in the West African nation.
LEADERSHIP recalls that Nigeria is in talks with the World Bank to secure a loan for which the financial body requested an economic recovery plan. The plan, according to government, is scheduled to be released this month.
Oil rises as OPEC aims for deeper output cuts
Oil prices rose more than $1 a barrel on Tuesday after OPEC said it was sticking to its agreement to cut production and hoped compliance with the deal would be even higher.
OPEC Secretary General Mohammad Barkindo told an industry conference in London that January data showed conformity from participating OPEC nations with output curbs had been above 90 percent and oil inventories would decline further this year.
“All countries involved remain resolute in the determination to achieve a higher level of conformity,” Reuters quoted Barkindo as having said at the conference.
Benchmark Brent crude oil LCOc1 jumped $1.13 a barrel to a high of $57.31 before easing to trade around $57.00 by 1455 GMT.
U.S. light crude CLc1 was up $1.00 at $54.40, having risen by about 0.5 percent in a shortened session on Monday because of a U.S. national holiday.
The Organisation of the Petroleum Exporting Countries and other producers outside the group agreed in November to cut output by about 1.8 million barrels per day (bpd) in an effort to drain a glut that has depressed prices for over two years.The cuts have spurred a speculative move into crude oil that has pushed prices toward the top of their recent ranges.
Money managers now hold the highest volume of net long Brent futures and options on record, InterContinental Exchange data showed on Monday, betting on higher prices to come as OPEC and other key exporters reduce production. [O/ICE]
Net long U.S. crude futures and options positions are also at a record high, U.S. data showed on Friday.[CFTC/]
“This prolonged and increasing overcrowding of speculative net longs should be a cause for concern,” said Jonathan Chan, an investment analyst at Phillip Futures.
“Should there come a time when these speculative positions decide to unwind, oil prices will be in for a significant correction.”
Despite signs that OPEC’s agreement is holding, inventory levels are still very high in many parts of the world.
U.S. crude oil and gasoline inventories soared to record highs last week as refineries cut output and gasoline demand softened. [EIA/S]
More evidence of the state of the U.S. oil market will come on Thursday when the U.S. Department of Energy publishes stocks figures. Those numbers could be a catalyst for a market move, said Carsten Fritsch, analyst at Commerzbank in Frankfurt. “Until then, lack of bearish news seems to be enough to push prices higher.”

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