IMF leader addresses Nigerian National Assembly
Initially, Lagarde highlighted the nation's peaceful election, calling it a "democratic transition between two civilian governments. It was a strong sign of Nigeria’s commitment to democracy, to a new Nigeria."
Lagarde addressed the nation's reaction to falling oil prices, the tightening of the global economy, geopolitical tensions and faltering economies.
"All this has come at a time when Nigeria is facing an urgent need to address a massive infrastructure deficit and high levels of poverty and inequality," Lagarde said. "So Nigeria faces some tough choices going forward."
According to Lagarde, the ability of the Nigerian people to adapt will help them be an example to other nations on the continent moving forward.
"I firmly believe that Nigeria will rise to the challenge and make the decisions that will propel the country to greater prosperity," Lagarde said. "And let me assure you that, as you go forward, as you develop your story, the IMF will support your efforts."
Still, LaGarde cautioned that the IMF predicted a slow economic recovery in 2016 for Nigeria, Africa and the world.
"Emerging markets, which propelled global growth after the 2008 global financial crisis, have slowed; advanced economies are still recovering from the impact of that crisis; and financial markets remain volatile," she said. "In fact, both at the regional and global level, growth is affected by three major economic transitions."
LaGarde stressed the importance of private sector investors to Nigeria's economy.
"With U.S. interest rates expected to continue to rise, albeit slowly, the likelihood of capital outflows will increase and exchange rate pressures could mount as investors re-assess their appetite for risk," Lagarde said. "More broadly, Sub-Saharan Africa is also facing spillovers from geopolitical factors, including the fight against Boko Haram."
Unfortunately, LaGarde said the threat of terrorism will remain.
"The threat of terrorism is very real and never far from our minds," she said. "Having been in Paris during the November attacks, I know firsthand the sorrow that so many Nigerians carry in their hearts. In this region, terrorism not only takes a human toll, but it also makes public finances more fragile."
LaGarde encouraged Nigerian officials to make conservative decisions about borrowing during 2016.
"Nigeria’s debt is relatively low at about 12 percent of gross domestic product (GDP)," she said. "But it weighs heavily on the public purse."
Domestic businesses should be a focus, LeGarde suggested.
"Think of the growing number of innovative startups — from fashion to software development — that are promoting Brand Nigeria," she said. "Indeed, the growth in services to about half of Nigeria’s output is a testament to the transformation that has begun, and which needs to continue."
Health care will also be a continued concern.
"Maternal mortality is relatively high because of limited access to health care," LaGarde said. "Many women and children are dying every day simply because they cannot get to medical facilities fast enough."
LaGarde concluded by saying Nigeria is "embarking on a new journey."
"Nigeria is looking ahead, while drawing strength from its assets: the richness and diversity of its culture, the ingenuity of its people and the belief in a better future," she said. "Today, policymakers have the opportunity to address near-term vulnerabilities and medium-term challenges with resolve, resilience, and restraint. Today, the 'Giant of Africa' is walking with a spring in her step, inspiring others in the region and across the world."