allAfrica.com: Nigeria: Economic Reform is On Course, Says Obasanjo (Page 1 of 3)

Nigeria may be the giant of Africa and the world's sixth biggest exporter of crude oil but news on its economy is rarely reassuring. In recent years, daily reports have lamented rising inflation, a weakening foreign exchange rate and sluggish agricultural and industrial performance, even in sectors forecast to improve. Repeated shortages of petroleum products cause disruption and anger across the country and the government has barely managed to hold its own against organised labour's highly successful national strike on fuel prices and demands over pay.

In 1999, the new government of President Olusegun Obasanjo promised major political and economic reforms. For the mass of Nigerians, the key element was the promise to create two million jobs but these failed to materialise. In fact the Manufacturers Association of Nigeria reported last month that in 2001 more than 100,000 jobs in industry were actually lost, although that figure halved to 50,000 in 2002. In August this year, the National Association of Chambers of Commerce in Industry, Mines and Agriculture (Naccima) said it believed unemployment in Nigeria now stood at 70%.

Now over three months into his second term, President Obasanjo is under pressure to deliver what went unachieved in his first term. His economic team led by chief Economic Adviser Prof. Charles Soludo and Finance Minister Dr. Ngozi Iweala-Okonjo have launched the New National Economic Empowerment Development Strategy (NEEDS). Among many other things, the new plan aims to boost GDP's growth rate from around 3% to over 5%, to establish stable interest rates, reform the over-manned public services, better manage the country's massive foreign debt and its repayment, privatise key state-managed operations such as hotels, banks and utilities like the telecommunications giant, Nitel, and deregulate the petroleum industry's marketing and distribution structures. While few dispute that the plan's provisions are sorely needed, there is some scepticism that promises not kept in the past will be fulfilled this time.

While in New York for the UN General Assembly, President Obasanjo spoke to AllAfrica's Akwe Amosu on the struggle to get economic reform underway, and added his thoughts on Charles Taylor, the Liberian peace process and Robert Mugabe's chances of being invited to the forthcoming Commonwealth Summit.

Your administration recently racked up 100 days. What have you been able to achieve so far?

A hundred days in the life of a government that has four years is too short a time to be talking about achievement. But for me, what is important is that we have determined what our orientation will be, what our programme will be, so we now have a road map to take us through the next four years, a road map which subsequent administrations in Nigeria can follow. To me that is more important than saying what I have achieved.

The new economic plan sets out some pretty major goals, moving to 5% growth, stabilising exchange rates, inflation and so on; how soon will Nigerians see some signs that it's working and what will they be?

Well the reforms we are talking about are many but they are all interrelated and they are being coordinated. Let me take one, for instance - Monetisation, which means that [recipients of state salaries] will now be given money for the benefits they used to receive in kind - houses, cars, and suchlike. That will reduce a lot of waste and we have started that - we've done it with members of national assembly, with the political appointees, and we are now doing it with the civil servants. That, to me, is important. Also elimination of subsidy - deregulation is the word people prefer - deregulation of the downstream of the oil sector is going ahead apace,

Some people say, "but many of these are things you said you were going to do in the first term!" Are the critics unfair to ask why it has taken so long to get things like privatisation underway?"

Well privatisation is not a once-and-for-all thing. There are so many things to privatise and we have privatised some of them - some of them we have not achieved as much success as I would have wanted to achieve. But privatisation will not even end with my administration four years from now, it should be a continuous process.

We are trying to privatise the telecommunications. I believe to the extent that we now have GSM in private hands and all that - you can say that we have privatised that to a large extent. We will privatise the power sector which is divided into three, the generation, the transmission and the distribution. We are privatising the distribution first and I believe we will privatise to a large extent before the end of this year.

So to those who are criticising... we are doing what we say we will do. We have privatised the hotels and the banks, by and large; not all of them - I think there are still one or two hotels to be privatised but we have privatised a substantial lot of them; we've done the banks except one which we still have to do. So I'm satisfied, generally; we could have moved better, for instance, in the case of Nitel, we thought we'd privatise that but that is still to be privatised; but we did the dockyard and that type of thing so we're going on.

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