Nigerian economic plan will sidestep difficult choices

Significance

Recently, the IMF published its annual country surveillance report on Nigeria, which warned of serious consequences from “insufficient” policies proposed in the government’s newly launched economic policy framework, the Economic Recovery and Growth Plan (ERGP). With only two years left in the current administration, the four-year plan faces significant implementation risks. Persistent policy incoherence raises doubts about the political will to repair the country’s ailing economy.

Impacts

• The government’s plan to increase foreign borrowing from 16% to 40% of total debt will make exchange rate liberalisation more difficult.
• Data discrepancies between the ERGP and the IMF’s report could further damage the credibility of the government’s economic team.
• A comprehensive new Niger Delta peace plan would make raised oil production targets achievable.