Record low oil prices continued to wrack Nigeria’s sagging economy as President Muhammadu Buhari was holding talks Tuesday with the International Monetary Fund to discuss potential solutions. Ahead of the meetings, the managing director of the group that works to stabilize international currencies said she anticipated constructive discourse with the Nigerian leader, who was elected in March in part on his promises to revive Africa’s largest economy.
“I look forward to productive meetings with President Buhari and his colleagues as they address important economic challenges, most importantly the impact of low oil prices,” Christine Lagarde said in a statement Monday ahead of her trip from Washington, D.C., to Abuja, Nigeria’s capital.
Lagarde’s apparent optimism belies Buhari’s resistance to IMF calls to devalue Nigeria’s naira currency — a tactic that has helped other African nations cope with economic stress. Instead, the former military ruler has proposed a record budget for the 2016 fiscal year, while Nigeria’s central bank has tried to prop up the failing naira to stem market panic. But economic analysts and policy experts predicted Buhari will eventually relent and allow the naira to weaken to absorb the impact of plunging oil prices and other external shocks to the economy before it can recover.
“We are expecting a devaluation of the naira. It’s a matter of when and it’s a matter of how it’s going to be devalued,” said Martina Bozadzhieva, head of research for Europe, Middle East and Africa at Frontier Strategy Group, a global research and advisory firm headquartered in Washington that specializes in doing business in emerging markets.