FROM THE OFFICE OF PUBLIC AFFAIRS

April 21, 2004
JS-1448

Secretary Snow’s Welcoming Remarks
U.S. – Nigeria Bilateral Dialogue
Washington, DC

It is a pleasure to welcome you all here.  We are honored to have such a large, distinguished delegation from Nigeria and I hope today can be a day of constructive, frank discussion among long-time friends. We have gotten to know the minister, and like many others, we have been impressed with her energy and commitment to stimulating broad-based economic growth.  We hope that in some small way, our meeting today is helpful as you move ahead with your reform agenda. 

The revival of this discussion demonstrates that much has changed since 2000 when the U.S. and Nigeria met in what was then called the Joint Economic Partnership Committee (JEPC).  At that time, expectations were high as the new democratically-elected government of President Obasanjo had ended a long period of military leaders.  There was hope that economic reform would quickly take root and a new era of growth, economic freedom and poverty reduction would take place.   The expectations may have been too high, but in any case, they were far from met.  While some steps were taken to introduce transparency and accountability, little change was seen in budgeting practices, contract awards, monetary policy, privatization, or public service reform.  Nigeria and the IMF terminated their Stand-by Arrangement, and Nigeria was moved to the low-case lending scenario at the World Bank.  The JEPC was short-lived.

Today, those of us gathered here have an opportunity to change the course of Nigeria’s economic development. The economic team from Nigeria has demonstrated that this is not business as usual.  This uniquely qualified economic team has already charted that medium-term course by developing the Nigerian Economic Empowerment and Development Strategy (NEEDS). 

In less than a year, you put forward to Parliament a coherent budget which begins a process of making spending more orderly and  ultimately reduces deficits and promotes macroeconomic stability.  You have taken steps to improve transparency, by posting the monthly budget allocations for the 36 states on your website so that state governments can be held accountable for the funds received from the federal government. You have promulgated the Fiscal Responsibility Bill.

And you are tackling one of the most challenging sectors, the oil sector.  The encouragement of more and better audits in the oil sector, work to lift price caps on gasoline prices, and the plan to open a unit in the Finance Ministry to model the oil revenue flows are all important positive steps forward.  And last but not least, you have renewed relations with the international financial institutions and bilateral allies, including with the Paris Club.  We applaud you for your efforts and look forward to marking further progress in these critical areas. 

Behind all these noteworthy accomplishments, there are challenges on the road towards economic reform, growth and poverty reduction.  You have inherited a heavy legacy, the result of years of mismanagement, corruption and fiscal irresponsibility.  Skills are weak. Institutions lack capacity. Corruption has become a norm.  Gas lines stretch for miles in one of the richest oil states in the world. The government is seen as one of the few employers in the country.  HIV/AIDS rates have increased and Nigeria has the most HIV-carriers in the continent.  Investors are still staying away due to the volatile macroeconomic environment.  Subsidies and trade barriers have distorted markets and kept inefficient producers afloat while punishing other potential producers.   The reforms you have initiated have upset many people who benefited from the old way of doing things.  One can imagine that there will be many who will resist change. 

We want to help you reinforce the message to the critics and doubters that the path forward cannot be reversed.

As the NEEDS demonstrates, Nigerians recognize the steps necessary to stimulate growth, develop the private sector and build a dynamic economy.  We hope that the US and other donors can be constructive and supportive in that process. I know I speak for my colleagues here when I say that the US is committed to supporting your efforts.

We hope this meeting will help us find ways to support and strengthen the accomplishments and tackle those obstacles which are inhibiting Nigeria’s economic potential.  I wish the participants here a constructive conference and look forward to hearing about how we can work together to move Nigeria’s reform efforts forward.