The International
Monetary Fund was conceived at the Breton woods conference in 1944. It was
formally established on December 27, 1945 with a total number of 44 nations.
The nations comprises mostly of investor European countries, US, Japan, Canada
and a few Latin America countries. At the time IMF was being established
by
these countries the world had just ended the 2nd world war. The IMF
was therefore established to create the foundation for a stable post war
reconstruction
Monetary Fund was conceived at the Breton woods conference in 1944. It was
formally established on December 27, 1945 with a total number of 44 nations.
The nations comprises mostly of investor European countries, US, Japan, Canada
and a few Latin America countries. At the time IMF was being established
by
these countries the world had just ended the 2nd world war. The IMF
was therefore established to create the foundation for a stable post war
reconstruction
Objectives
of IMF
of IMF
1.
To promote international monetary corporation through a permanent
institution that provides the machinery for construction and collaboration on
international monetary problems
To promote international monetary corporation through a permanent
institution that provides the machinery for construction and collaboration on
international monetary problems
2.
To facilitate the expansion and balanced growth of international trade and to contribute
thereby to the development of productive resources of all members
To facilitate the expansion and balanced growth of international trade and to contribute
thereby to the development of productive resources of all members
3.
To promote exchange stability and to maintain order exchange arrangement
among member nations
To promote exchange stability and to maintain order exchange arrangement
among member nations
4.
To give confidence to members by making the funds and resources
available to them under adequate safeguards thus providing them opportunity to
correct maladjustments in their balance of payments without resulting to
measures destructive to national and international prosperity
To give confidence to members by making the funds and resources
available to them under adequate safeguards thus providing them opportunity to
correct maladjustments in their balance of payments without resulting to
measures destructive to national and international prosperity
5.
To act as a forum for the division and resolution of international
financial problems
To act as a forum for the division and resolution of international
financial problems
6.
To supervise an international financial code of conducts governing
member nations exchange rate policies
To supervise an international financial code of conducts governing
member nations exchange rate policies
How
IMF obtains its income
IMF obtains its income
·
Subscription: subscription of member nations ,the capital requirements
of the fund are met from the subscription of the member nations
Subscription: subscription of member nations ,the capital requirements
of the fund are met from the subscription of the member nations
·
Loans: the activities of IMF empowers the organization to borrow from
commercial banks, central banks and to give member nations financial support in
form of:
Loans: the activities of IMF empowers the organization to borrow from
commercial banks, central banks and to give member nations financial support in
form of:
¯ Special drawing rights
¯ Direct loans
Problems
of IMF
of IMF
1.
Shortage of international liquidity – the demand of member nations
outstretches supply of funds. IMF therefore rations the loan to go round.
Nigeria is said to owe huge debt to IMF and other western financial bodies to
the bodies to tune of 32 billion dollars as at early 2004
Shortage of international liquidity – the demand of member nations
outstretches supply of funds. IMF therefore rations the loan to go round.
Nigeria is said to owe huge debt to IMF and other western financial bodies to
the bodies to tune of 32 billion dollars as at early 2004
2.
Strong conditionality – the IMF always spell strong and stringent
conditionalities on monies and loans to borrowing nations. It was perhaps this
factors that made the Babangida junta to throw open to the nation a debate
whether we should accept or reject the IMF loans but characteristics of his
Maradonic dribbles the man later took the loan through the back door even when
Nigerians has said no to it.
Strong conditionality – the IMF always spell strong and stringent
conditionalities on monies and loans to borrowing nations. It was perhaps this
factors that made the Babangida junta to throw open to the nation a debate
whether we should accept or reject the IMF loans but characteristics of his
Maradonic dribbles the man later took the loan through the back door even when
Nigerians has said no to it.
3.
Lack of flexibility in exchange rate
Lack of flexibility in exchange rate
4.
Unnecessary interference in monetary and financial affairs of member
nations
Unnecessary interference in monetary and financial affairs of member
nations
5.
Inadequate process for adjusting to balance payment disequilibria
Inadequate process for adjusting to balance payment disequilibria
Contributions
of IMF to Small Business Enterprises in Nigeria
of IMF to Small Business Enterprises in Nigeria
¯ IMF ensures convertibility of currencies
¯ The stringent conditionalities that IMF always put
forward to member nations wishing to borrow from the fund have helped Nigeria
to live within the limited available resources and to develop her small scale
enterprise
forward to member nations wishing to borrow from the fund have helped Nigeria
to live within the limited available resources and to develop her small scale
enterprise
¯ IMF has contributed immensely to the economic
development in Nigeria through the SAP programme. Although like every brilliant
idea of IBB, the SAP programme haven worked fairly well in other countries, was
a huge failure in Nigeria due to very bad implementation. And today the SAP failure
still hangs on the necks of IBB and chief Olu Falae as an ignoble chain
development in Nigeria through the SAP programme. Although like every brilliant
idea of IBB, the SAP programme haven worked fairly well in other countries, was
a huge failure in Nigeria due to very bad implementation. And today the SAP failure
still hangs on the necks of IBB and chief Olu Falae as an ignoble chain
¯ IMF has been assisting Nigeria to pay our foreign
trading partners in foreign currencies.
trading partners in foreign currencies.
