It Should Be A Deliberate Strategy To Seek IMF Loan To Spurt Growth – Kalu Idika Kalu

Former Minister of Finance, Budget and National Planning Dr Kalu Idika Kalu has dismissed apprehensions about Nigeria borrowing from the International Monetary Fund, IMF saying that it is about the easiest therapy for Nigeria to bring out buried potentials in various sectors.

Speaking in an interview, Dr Kalu who served in the Ibrahim Babaginda military administration and famed for his IMF inclinations said that it was not a shame for the country to seek the help of the multilateral institution to rekindle growth.

GWG.ng reports that Kalu who was headhunted from the IMF by Babaginda was famed for his IMF therapies which the country adopted but without the loan following a national debate at the onset of the IBB regime.

“Given our level of income, given our potential that we have said over the years, that is the possibilities of creating wealth, what is important is not the issue of borrowing, but the kind of analysis that you have to bring to bear not only in terms of the overall programme and the balance of payment that you need to support the import content,” Kalu said in an interview on Arise News monitored by GWG.ng.

According to him once the fundamentals such as the interest costs,  grace period and the amortization period are well set out, “you can continue to borrow until you get to the point where the cost of borrowing begins to come close to the overall rate of return of the borrowing.”

“So, given the level of unemployment, given the work that we need to do in the oil sector, in the agricultural sector, in the manufacturing sector, name it, in fact we need to be funding our IT sector and the film industry who are always in need of the kind of funds that they need to grow.

“At the level of Nigeria we should not be talking about borrowing, we should be talking about why we are borrowing.”

He, however, faulted the borrowing on recurrent expenditure lamenting it as a distress to the heart.

“Certainly, having said that it is very distressing to be talking about borrowing to pay salaries.”

Asked whether Nigeria should swallow its pride and take an IMF loan, Dr Kalu said:

“I will never say swallow our pride. We are the ones in the deep waters. It is supposed to be part of your strategies. When we talk about IMF conditionalities the IMF is the first line of contact for developing countries because their funds are relatively low in terms of interest costs even though they are not long term but medium term.

“So as members you try to get that as much as possible, but never mind that in Nigeria we always look at it in negative terms to start talking about swallowing our pride. There should be no pride to swallow, it should be part of strategy. Actively seeking to get at soft terms in your first tranche before you start getting to the ADBs and the World Bank and the bilateral before you consider commercial loans.”

“So, it is a positive strategy to go borrow from the fund to make the most of what you can get back from the money you pay to the fund as members and you subscribe to helping other countries. So, why not put out fear from the public, in fact there is no pride to swallow, but it should be deliberate strategy.”

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