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Nigeria Briefing Paper

Nigeria briefing paper copyright 2005 by college

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Unformatted text preview: Obasanjo is attempting to address some of the challenges highlighted by the IMF, but balancing long-term economic logic with immediate social needs has been a challenge. Nigeria Briefing Paper Copyright © 2005 by College Board. All rights reserved. Available at apcentral.collegeboard.com. 29 Currently, the oil sector provides 20 percent of gross domestic product, 95 percent of foreign exchange earnings, and approximately 65 percent of budget revenues. The combination of high population growth rates and government inattention to the agricultural sector has transformed Nigeria from a net food exporter to a country that must import food to meet local needs. A major debt-restructuring deal was recently reached with the Paris Club, with $1 billion promised from the IMF contingent upon economic reforms (many of which were presented by the organization in 1986!). The current external debt hovers around $30 billion, with approximately 60 percent of the population below the poverty line, and per capita GDP estimated at $900. In an effort to maximize Africa’s ability to influence the global marketplace, Obasanjo has worked with his counterparts from South Africa (President Thabo Mbeki) and Algeria (President Bouteflika) to create the New Partnership for African Development (NEPAD). The goal of NEPAD is to promote development on the continent by encouraging good governance, ending civil war, promoting foreign investment, liberalizing trade, and increasing foreign aid from advanced industrialized countries. Major Public Policy Challenges For the Fourth Republic to survive or, more optimistically, flourish, Nigeria’s elected leaders face a myriad of economic and political challenges that will require a gradual and deliberate transformation bold enough to champion real change, but mindful that the military has the potential to return to power if given the opportunity. The future of this West African country hangs on this precarious balance! Nigeria Briefing Paper Copyright © 2005 by College Board. All rights reserved. Available at apcentral.collegeboard.com. 30 Economic and Political Reform In order to promote and sustain political and economic reform, the government needs to substantially reduce the endemic corruption that permeates the public and private sectors. The government needs the revenues lost to corruption, and financial transparency is essential for increased foreign direct investment in the country. While it is unrealistic to expect the government to withstand the shock of severe austerity measures such as those initially promised by Babangida, progress needs to be made in this regard. This will require tough but fair negotiations with the IMF that minimally meet the goals of the donor community (which maintains a dominant voting position in the IMF), while attending to the basic social service needs of the Nigerian people, many of whom rely on government intervention in the form of subsidies and tariffs. With over 60 percent of the population at or below the poverty line, and many more dangerously close to the precipice of poverty, poverty alleviation is a priority for the government. Access to quality health care and education is crucial...
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