Economic report card
Achieving macroeconomic stability was the first objective of Nigeria's economic team, and in the past 18 months they have achieved significant progress across a number of areas – and that has not escaped the attention of the international community.
The IMF is certainly impressed. In its statement in late March, following the 2005 Article IV Consultation Discussions it said that "overall, policy performance in 2004 was commendable."
"The authorities' macroeconomic policy framework in 2005, which builds on the unprecedented achievements of 2004, is consistent with continued macroeconomic stability," it said. In 2004, policy implementation under Nigeria's National Economic Empowerment and Development strategy (NEEDS) signalled a clear break from past imprudent practices. The key objectives of the 2004 programme were achieved, namely to restore macroeconomic stability, enhance the predictability and transparency of policies, and reduce the economy's vulnerability to oil price shocks.
The macroeconomic figures are these: GDP is estimated to have increased by 6% – compared to a 5% target – and non-oil GDP by 7.5%. Prudent fiscal management – the 2004 deficit was no more than 2.1% of GDP – and savings by government of its oil revenue windfall have contributed to lower inflation (down from 24% to 10%, December to December), a stable exchange rate and a build up of international reserves to a hefty $21 billion, equivalent to up to six months' imports.