President Goodluck Jonathan interpreted for Nigerians what the visit of his latest guest meant. One would have thought the task was for the guest, Christine Lagarde. She is the Managing Director of the International Monetary Fund (IMF). And she is well-known in Nigeria. At least many learned that a woman took over the headship of the Fund after Dominique Strauss-Khan, the former Head, was sent packing. Strauss-Khan was not a favourite of most African nations when he arrived office in November 2007 anyway. They cried that with the coming of another candidate from Europe as the Fund's boss, nothing had changed and nothing would change in the way that institution was managed. It was not the only problem Africans had with the man at the time; they wondered why a man who did not come with saintly credentials got the job in the first place. Now that Strauss-Kahn is gone with his integrity much battered than when he arrived, Lagarde, the former French Finance Minister, has taken over, and Nigeria's President, Dr. Goodluck Jonathan, was her latest high-profile host.It was a well-thought out, carefully-planed itinerary that Lagarde had. It could not but be. A fellow woman, and Nigeria's Finance minister, Dr. Ngozi Okonjo-Iweala, is here, of course. Cerebral as ever, and a known woodwork among international monetary institutions, she must have made the coming of the IMF boss smooth. So Lagarde got to see Nigeria's most prominent citizens, one after the other, and in a matter of hours. There was a meeting with the president, and the Finance Minister was in attendance. And there was another meeting with the Senate President, Senator David Mark, as well as a separate one with the Speaker of the House of Representatives, Aminu Waziri Tambuwal. Each of them had a message for the guest. 'I believe the present IMF is different,' the president probed, prompting an answer from his Finance Minister later on. And he had moved on to give an interpretation of what he thought the visit signposted; it was a sign that Lagarde believed in the effort of the current administration to transform the nation's economy, while he also expressed hope that 'we can work together constructively.'IMF has actually changed completely from what it used to be, Okonjo-Iweala would say later on, confirming the president's belief, while she recalled that Lagarde's visit was the first to Africa since she assumed duty at the IMF headquarters. The Fund now allows nations to build their own capacities while it provides support; the Fund expects nations to seek its assistance. If any seeks, it will find. If it does not, the Fund keeps its hand to itself. 'And as for Lagarde coming to pay homage to Nigeria's leadership first, it is because she is impressed with the march the nation is making towards economic recovery and stability', the Finance Minister submitted.Mark, direct and no-nonsense as ever, counseled Lagarde: 'Her Fund was known for prescribing pills that would not heal peculiar economic illness on the African continent; her Fund should from now on prescribe pills for economic recovery that reflect peculiar conditions on the continent'. As for Speaker Aminu Tambuwal, he wanted Lagarde to consider Nigeria for a seat in its Governing Council. Obviously, everyone Lagarde met was appropriately impressed that she came, and some officials made most of it ' It's a recognition that Nigeria is a powerhouse, one pointed out. But it is crucial to pay attention to what Lagarde said when she was in town before her views are submerged by those of government officials who have always desired praises for their policies from outside the shores of the country. For one, those who see all the world and see it as whole from their high-rise offices need to be taken serious, and views that are on the opposing end of what officials here express, even more so. While Lagarde said the feedback she had received from the IMF team which recently undertook a review of the Federal Government's economic programme was 'very positive,' she also made some strong comments. And it is that angle to the visit that the president with his men - and his women - need to take to heart.Lagarde had looked in the direction of Europe that she knew so well and gave Nigeria warnings. She should be able to use Europe as an example because she had seen it holistically from her position, and she was once one of Europe's Finance Ministers until she came to IMF months back. She called for safeguard measures in Nigeria in the light of what happened in the 2008 economic and financial crises and the current crisis in Europe. What's the problem with Europe, and why is Lagarde concerned' Why does she think nations like Nigeria should be wary'The European Union (EU), wants to overturn the challenge of large government debt burdens in many of its member states. Greece is the foremost culprit. That Southern European country has a net debt that is way higher than 140 percent of Gross Domestic Product - Forty percent is red light. Greece's economic growth potential is poor, but it has a very large public sector to support. Any semblance with Nigeria' Now, it does not appear as if Greece will be able to make all its debt payments when they are due. This worries other indebted EU members such as Portugal, Ireland, and now, Spain and Italy. The thinking is that a debt default is inevitable, whatever may be done. The EU and the IMF have been working together to avoid even a temporary default. They have offered loans to Greece with the understanding that it makes huge cuts in government spending. There has been another round of financing lately, still with skepticisms though. The EU has been trying to find some other ways to reduce Greece's debt burden in the form of buying its bonds at a discount. This will affect bond holders negatively and so it is actually a default by another name, although it can potentially stem a situation where the indebted country totally stops paying those it owes.But fear mounts that Europe's debt crisis would yet spill more, a situation that could cause the breakup of the currency union. So many EU members have called for European Central Bank to change the bank's charter and declare itself a lender of last resort to all EU members. The only problem is that Germany has said No, and it's economic muscles and financial power puts it in a situation to say no. The problem thus lingers. That is the situation in Europe, and it made Lagarde counsel Nigeria to fortify itself, meaning there is need to save more, cut back on government spending in favour of capital expenditure, in favour of economic growth.It should be noted that what Okonjo-Iweala has been saying since she returned for the second time is not different from this. Lately, the minister said if the government could cut back on recurrent expenditure, bringing it to at least less than 70 percent of the budget, then it would have achieved a lot. Yes, externally, Nigeria's debt is about 20 percent of the GDP which experts say is still favourable. But domestic debt is something else. It accounts for over 80 percent of the country's latest figure of $40 billion debt. That's still a lot of fund considering the fact that debt servicing comes under the recurrent expenditure table that is as high as 72 percent of the annual budget.There is no doubt that Lagarde had seen the worst of Europe as it unfolded. That means, more than she said in the course of her visit to Nigeria, she knew how hard-hit the EU members that had lost the capacity for self-propelled economic growth are. She might not have come here just to shower encomiums, but more importantly, to give a warning. In that case, if there is anyone leaders here should take serious over a spiralling recurrent expenditure and total lack of fiscal discipline, it is this woman whose good offices they would ultimately need in negotiating another round of debt forgiveness by the time the nation overspent its resources like it is has happened in Europe.'Ajibade is a Communications Consultant. tunjioa@yahoo.com
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