Nigeria goes for homegrown alternative

[Sabri Oncu <soncu@xxxxxxxxxxx>]

IMF Endorses Nigeria Decision
Wed Mar 6, 5:19 PM ET
By GILBERT DA COSTA, Associated Press Writer

ABUJA, Nigeria (AP) - The International Monetary Fund (news - web
sites) endorsed Wednesday Nigeria's decision to pull out of an
informal monitoring arrangement with the fund, citing the
troubled country's inability to meet key targets.


An IMF mission has been in Nigeria since Feb. 27 to review recent
developments and to assess the economic outlook for 2002.

Despite some progress in reducing inflation in the last few
months, an IMF statement said key macroeconomic targets had been
missed.

Under current circumstances, there was also a risk government
spending in 2002 would be "very high," the statement said.

"In light of these risks, the IMF staff mission agreed that it
would be prudent for the government not to commit to policies
that could prove difficult to fully implement," the IMF said.

It did not elaborate, and officials could not immediately be
reached for comment.

Finance Minister Adamu Ciroma cited the country's "political
fragility" when he announced Tuesday that the government did not
want to "continue with arrangements where only narrowly defined
macroeconomic considerations come into play."

He said Nigeria was instead embracing "a homegrown alternative"
and would seek the IMF's technical expertise, among others, in
devising such a program.

President Olusegun Obasanjo had asked the IMF and World Bank
(news - web sites) for support in rebuilding Nigeria's troubled
economy after 15 years of corrupt military rule.

A one-year standby agreement between Nigeria and the IMF expired
last October, and an informal monitoring arrangement has been in
place since then.

Last year, the IMF said the government needed to rein in public
spending and tighten monetary policy if it hoped to qualify for
future installments of its loan program.