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Wednesday, 6 March, 2002, 16:25 GMT
Nigeria ditches IMF consultations
President Olusegun Obasanjo
Obasanjo says 'that's enough' to the IMF
Nigeria has ended informal consultations with the International Monetary Fund (IMF) in the interests of "political stability, democratic consolidation, credibility and accountability".

The question is, will they be able to have the level of discipline required to deal with creditors and all of those things without an IMF kind of pat on the back?

Pat Utomi
Lagos Business School
The country "does not wish to continue with arrangements where only narrowly defined macro-economic considerations come into play", Finance Minister Adamu Ciroma said in a statement.

Analysts say the move was made to ensure President Olusegun Obasanjo's government could deliver a vote winning budget ahead of elections next year.

The government said it would implement policies that better serve Nigerians.

The informal monitoring arrangement had been in place since the IMF approved an extension to a one-year standby loan in October.

Vote winner?

Pat Utomi of the Lagos Business School said the decision was to win votes but was unconcerned about its effect on creditors.

"On its own that decision is neither good nor bad," Mr Utomi said.

Itinerant worker in Lagos
Unemployment is the government's biggest challenge

"The question is, will they be able to have the level of discipline required to deal with creditors and all of those things without an IMF kind of pat on the back?," he said.

"The bottom line is that there are not too many people out there in the world who would like to see a crisis in Nigeria ... so even without an IMF facility, and if they are still earning enough from oil to do some basic servicing of debt and other bills, they should be OK," he added.

IMF approval of economic policies is necessary for foreign debt relief on about $30bn in loans, mostly from the Paris Club of creditors.

IMF 'ignores' achievements

President Obasanjo, who inherited an economy wrecked by 15 years of corrupt military rule in 1999, is expected to run for a second term in office.

He has been criticised for failing to end prolonged economic stagnation and create jobs for the millions of unemployed.

Rioters in Lagos
Lack of jobs is blamed for recent civil unrest

Joblessness is considered a major factor in ethnic and religious violence that has claimed more than 3,000 lives since Mr Obasanjo took office.

Mr Ciroma said the IMF had ignored clear and measurable achievements since Mr Obasanjo took office including its debt rescheduling accord with the Paris Club, a 200% expansion in electricity generation, deregulation of fuel marketing, improvements in water supply and telecommunications and the privatisation programme.

"Between 2000 and 2001 real GDP [gross domestic product] grew at a faster pace than at any time since 1991," he said.

The BBC's Dan Issacs
"Nigeria has got what it wanted out of the IMF and therefore no longer needed to maintain links with them."
See also:

16 Jan 02 | Business
Nigeria's economy dominated by oil
24 Aug 01 | Business
World Bank optimism on Nigeria
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