Draft Ministerial Press Briefing note on the Outcome of the 2019 Annual Meetings of the International Monetary Fund and the World Bank Group in Washington DC, United States.
Good Morning Distinguished Ladies and Gentlemen of the Press. It is my privilege to address you this morning on the outcome of the 2019 Annual Meetings of the International Monetary Fund and the World Bank Group.
The major highlights of the discussions in the various meetings are as follows:
Since the last meeting in April, the global economy has experienced a synchronized slowdown with growth weaker than expected in about 90 countries. Growth is projected to slow down from 3.6 percent in 2018 to 3.0 per cent in 2019. This is the weakest over the last decade. Main triggers of the global slow down includes; the trade tensions leading to the disruption of global value chains, entrenched policy uncertainty, rising debt concerns, looming crisis in Brexit and adverse geopolitical developments. We therefore called for continued momentum from trade truce to trade peace that will enhance macroeconomic stability;
- For the EMDEs, we noted the implications of the slowdown of systemic countries like China, India, Brazil, Turkey on the commodity exporters like Nigerian and South Africa among others and we called for strong momentum in structural reforms, well calibrated deployment of fiscal policies to stimulate productivity and the pursuance of tight monetary policies to ensure price stability;
- At a Joint Meeting of the International Monetary and Finance Committee and the G20 Countries convened to discuss the issue of ‘IMF Resources and Governance Reform’, I spoke on behalf of our 23 member countries. While supporting the approach that would maintain the Funds current resources envelope including by doubling the New Arrangement to Borrow (NAB) and the extension of the Bilateral Borrowing Arrangements (BBA), we expressed our disappointment for lack of adequate support for a quota increase during the 15th General Review of Quotas. We also underlined the need for a recommitment to address long standing governance reforms under the 16th General Review of Quotas;
- At the IMFC Plenary, I issued a statement on behalf of Africa Group I Constituency on the priorities of our countries and how the current global slow down has impacted our economies. I also drew the attention of the International community to our peculiarities of higher interest rates and high returns in the face of global ‘lower for longer rates’ and called on the investing public to consider investing in our constituent countries where returns are high. I urged the Fund to consider proffering country specific policies that will address the issue of high interest rates in our countries ;
- At the Commonwealth Finance Ministers meeting, we discussed the issue of debt and called for responsible lending and borrowing on all sides but more importantly, debtor nations should have a comprehensive debt management strategy that is based on realistic debt data;
- At the DC, where I represented Nigeria, Angola and South Africa, we discussed the World Bank Group strategic vision for our countries. In particular, the Jobs and Economic Transformation Agenda (JETS) of the World Bank was unveiled. Specifically, we African Governors called on the Bank Group to help address the challenges of Jobs and economic transformation in our region;
- We also examined the outcome of the World Development Report 2020- an Annual Flagship Report of the World Bank. The report finds that the rise of trade and global value chains (GVCs) accelerated economic growth and poverty reductions in the 1980s and 1990s. But growth slowed considerably in the aftermath of the financial crisis of 2008. Also, GVC growth has been concentrated in machinery, electronics, transportation, and in regions specializing in those sectors. Meanwhile, Sub-Saharan Africa (SSA) has played a minor role in the GVCs with participation limited to exports of raw materials and minerals. However, countries in SSAs can still benefit from GVCs by having appropriate policies to attract FDIs (e.g. political stability, favourable business climate and investment promotion)
- G24 – At the G24 meetings, I spoke among others on the negative impact of the existing international corporate tax rules on our fiscal revenues and commended OECD for their on-going initiatives to ameliorate the problems and called for more information to help assess available options in a more pragmatic manner;
- At the African Group I Constituency Meeting of the IMF, I presented my statement to the International Monetary and Finance Committee (IMFC) on behalf of the 23- member group. In my comments on the main Policy Dialogue Paper on ‘Fiscal Policy Responses to Managing Climate Change and Natural Disasters in SSA’ presented to the group, I also informed Governors about a new Portal on Disaster Relief developed by the Commonwealth Secretariat of which member countries could explore and benefit from in the event of natural disaster. I also informed them about the regional stabilization project to help address climate change in the four countries of the Lake Chad Region comprising, Cameroon, Niger, Nigeria and Tchad. I equally underscored the imperative of recharging the Lake Region to restore livelihoods of the population that has been adversely impacted by the drying up of the Lake Chad.;
- Climate Finance Summit, we discussed the increasing threat to the global community by climate change and the need for countries to mainstream climate financing in their budgets and also ensure the meeting of the Nationally Determined Contribution targets;
- Roundtable on Lake Chad Region; we participated in the meeting of the four (4) countries bordering Lake Chad convened by World Bank African Regional Vice-Presidency to find ways of reducing the fragility through the WBG Regional intervention. At the end of the meeting, we were able to include Nigeria in the phase 1 of an integrated project that will address some of the drivers of fragility. This is a major accomplishment because, the operation for the other three countries is far advanced in terms of design. A mission is due to visit Nigeria soon to discuss with the North East Development Commission and Ministry of Humanitarian Affairs to flesh out the details.
- United Kingdom: We met with the UK Minister of State for International Development and also participated in the UK Investment Summit to explore further areas of cooperation. I am happy to announce the willingness of UK Authorities to support our infrastructure financing through the possible issuance of jollof bonds. Already, a working group is being set up to work on Naira denominated, internationally traded bonds. CBN is leading this effort. We would explore all options on this at the next UK Investment Summit in January 2020;
- Island of Jersey: We also met with the representatives of the Island of Jersey. We explored areas of mutual cooperation including the possibility of signing an Agreement on ‘Avoidance of Double Taxation’ as well as asset repatriation;
- I also met with the President of the Islamic Development Bank where we discussed the impending mission, to Nigeria, in November 2019 that will put together a Strategic Framework to lay out the partnership and cooperation between Nigeria and the Group. We also discussed other issues on the Nigerian Portfolio with the Group.
- Other Bilateral – We also held productive bilateral meetings with JICA and Deutsche Bank on existing areas of cooperation and on how to attract additional investments into the country;
- We had very productive meetings with the World Bank Group Country Power Sector Team on Nigeria for the PSRP wherein we received an update on the outstanding issues covering sustainable fiscal support, policy and regulatory environment, operational efficiency and infrastructure investment possibly under a programmatic approach. We identified the imperative of solving two critical problems, i.e. operational efficiency and revamping the associated infrastructure in the power sector to ensure the overall success of the interventions in the power sector. I made two sets of requests namely:
Technical Assistance from the Bank to implementing agencies such as NERC on PIP Review, business continuity regulations, and TA to the Federal Ministry of Finance to help in the assessment of Contingent Liabilities in the power sector and options for dealing with them;
Financing of between US$1.5 billion to US$4 billion for the Power Sector.
The World Bank indicated its readiness to provide the TA in the near-term and the funding in a programmatic manner.
I have other important meetings lined up later today with the President of the World Bank Group – David Malpass, Managing Director of the IMF – Kristalina Georgieva and the Meetings of the Africa Caucus with the Heads of the two Bretton Woods Institutions.
I will stop here and call on the CBN Governor for his own intervention.
Zainab Shamsuna Ahmed
FEDERAL MINISTRY OF FINANCE
October 20, 2019