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Nigeria Is World’s 3rd Fastest Growing Economy – IMF

International Monetary Fund (IMF) has announced that Nigeria is the third fastest growing economy in the world after China and India, as a result of the growth of the nation’s economy from 6.9 per cent in 2009 to 7.4 per cent this year.

Meanwhile, Governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, has vowed that fraudulent directors of banks operating in Nigeria will go to jail.

Sanusi said this after he was presented with an award in the United States of America by Euromoney Institutional Investor Plc as an outstanding Central Bank Governor in sub-Sahara Africa in the Emerging Market.

The move is designed to sanitise the Nigerian banking industry of corrupt practices and encourage inflow of foreign direct investment (FDI) into the Nigerian economy.

Former Chief Executive Officer of Oceanic Bank International Plc, Dr (Mrs) Cecilia Ibru, sacked by the CBN last year after an indictment by the joint audit report of the apex bank and the Nigeria Deposit Insurance Corporation (NDIC), was sentenced to six months imprisonment on Friday by a federal high court in Lagos.

In the ruling of the court, she forfeited assets worth N191 billion after pleading guilty to a three-count charge of misappropriation of depositors’ fund.

Sanusi disclosed on Saturday in Washington DC, that the CBN had enough evidence to jail fraudulent bank directors that mismanaged depositors fund.

According to him, “I know what I saw in the report of weak banks investigated by our auditors from the first day and have no doubt these people would go to jail.

I have no doubt that everybody we are trying will go to jail.”

Sanusi explained that the sanitisation of the banking industry was not about individuals as the CBN continued with the legal process but was designed to ensure the safety of depositors’ fund.

He said: “A year ago, when we removed Mrs Ibru, the story was that it was not possible and that it would not last. When we started the trial, the story was that in Nigeria, it is not possible to jail a CEO.

The time that people who were rich and were connected would go free when they committed offence is now a thing of the past.”

Sanusi vowed that if any of the directors of banks in Nigeria should commit any offence, they will pay the price for it, no matter the level of connection and political influence.

“For the fact that Mrs Ibru today is convicted is a big lesson for the elite, the rich and the powerful people in Nigeria.

It is not perfect, it is not ideal but maybe I would have wanted more but in the circumstance, the Justice Ministry has done very well and the minister must be commended for holding firm on the trial,” he said.

“I think it is a good thing for the country.

It has shown that the way people think, that maybe because somebody is my friend or from one part of the country, will make them go free if they are caught, will no longer happen,” he added.

The Minister of Finance, Dr Olusegun Aganga, who described this rating by IMF as a good development at a time when the economies of the developed countries were contracting, said with new policies being initiated by the Federal Government, the economy would witness a turnaround in a very short time.

“What we need in Nigeria is continuity in policies and leadership to sustain the growth,” he advocated.

Speaking at a joint press conference with Sanusi at the World Bank/IMF meetings in Washington DC, Aganga said the economic prospect was bright because despite the fact that Nigeria was yet to take advantage of opportunities and resources available within the country, it achieved 7.4 per cent growth and 48 per cent increase in revenue in the first half of the year.

Among the advantages he identified were existence of 33 untapped solid minerals, steady increase in the oil revenue and 75 million telecommunic-ations subscribers.

“If we have continuity in policy, a lot will be done in the economy and we will do more as shown with the increase in oil revenue by 46 per cent during the first six months of 2010,” he said.

However, Dr Aganga said “the Federal Government requires N100 billion to finance infrastructure development for the next four years in order to add two per cent to the gross domestic product (GDP) of Nigeria.”

He made reference to the state of the manufacturing sector, where operators put 40 per cent of cost on power generation, saying, if infrastructure in Lagos and other places were upgraded, there would be a major relief across the country.

“This could be our decade. I am more excited about the country today than few years back,” Aganga said.

The finance minister, who also is the chairman of World Bank 2010 annual meeting, confirmed his push for Africa to emerge as the president of World Bank and Managing Director of the IMF.

“Of course and it is clear that since 1946, the president of the World Bank has always been from America and the MD of IMF is always from Europe .

We are all in agreement that it should change. The appointment to leadership positions should be open to all members, transparent and based on merit going forward. That is part of the reform.”

He added that he had been making the case to increase the quota of the constituency in Africa.

“Whatever we come out with, it is better that we protect the quota of low-income countries in Africa and small medium countries. That is important because it determines the aids to get and the voice in policy issues,” he assured.

Meanwhile, the CBN has raised concerns over the rate Nigeria’s foreign reserves is depleting, saying that plans are underway to slow the pace of spending from the reserves to defend the naira.

Sanusi told newsmen at the sidelines of the IMF and World Bank meeting, at the weekend, adding that the apex bank must make sure the Federal Government did not have access to “easy money” to continue its deficit spending habits.

A series of factors that had been driving the CBN to draw down its forex reserves in defense of the naira were winding down, as the bank reported that its forex reserves were down by 15 per cent from a year earlier at about $34.57 billion, including a seven percent decline in the last few weeks.

“I think we’ll see less spending, but I think the naira will remain stable,” Sanusi said.

The naira slid to a 13-month low in September amid strong local demand for the United States dollar by gasoline and rice importers.

Sanusi said the current exchange rate was not a level that needed to be maintained “at all costs,” adding that “in the short to medium term, we do believe we can maintain this range.”

It will be recalled that the CBN surprised analysts and investors, last month, by raising its benchmark interest rate by a quarter of a percentage point to 6.25 per cent.