ABUJA (Reuters) – The head of the International Monetary Fund endorsed Nigeria’s efforts to tackle corruption on Tuesday while saying it needed to reduce its reliance on oil, sharp falls in the price of which have crippled its economy.
After meeting President Muhammadu Buhari, IMF managing director Christine Lagarde also called for greater flexibility in Nigeria’s exchange rate regime, fuelling speculation that a devaluation of the naira may be imminent.
The central bank has resisted calls by investors to devalue the naira, which has been allowed to fall about 20 percent since the start of 2014.
Measures imposed by the central bank to restrict access to foreign exchange have been backed by Buhari. But they have proved to be unpopular with investors and highlighted Nigeria’s dependence on crude oil exports, which account for more than half of state revenues.
The IMF head, who said she was not in Nigeria to negotiate a loan, backed what she called Buhari’s “very important” fight against corruption and said the president’s reform push could have a positive impact across West Africa.
“His determination to bring about transparency and accountability at all levels of the economy were very important agenda items,” Lagarde told reporters at the presidential villa in the capital Abuja.
Buhari was elected in March after campaigning on a promise to clamp down on the endemic corruption that has left many in Africa’s biggest economy mired in poverty despite its enormous energy wealth.
In December he announced a record budget for 2016, forecasting a doubling of the deficit to 2.2 trillion naira ($11 billion) and a tripling of capital expenditure intended to help the country adjust to the downturn in oil, which has lost around two-thirds of its value since mid-2014.