Economic Policy of the Obasanjo Administration

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ECONOMIC POLICY
OF THE OBASANJO ADMINISTRATION
(For 1999 - 2003)
When this Administration took office in May 1999, it inherited an economy with the following characteristics: declining capacity utilization in the real sector, poor performance of major infrastructural facilities, large budget deficit, rising level of unemployment and inflation. In addition, the economy had lingering problems of import dependence, reliance on a single economic sector (oil), weak industrial base, low level of agricultural production, a weak private sector, high external debt overhang, inefficient public utilities, low quality of social services and unacceptable rate of unemployment.

[pic]Guiding Principles

Since its inauguration, the Administration of President Olusegun Obasanjo has been pursuing an economic policy inspired by the following guiding principles: [pic]The economy exists for and belongs to the people, and at all times the general well-being of all the people shall be the overriding objective of the government and the proper measure of performance. [pic]Given the state of the economy which is equivalent to national emergency, economic management shall involve total commitment of the leadership at all tiers of government, and the mobilization of the populace without creating a bloated government. [pic]Government shall be lean. efficient, honest, transparent, cooperative and friendly; operate on the basis of extensive devolution of power, and shall function mainly as a facilitator. [pic]Government's primary role shall be to ensure, in cooperation with the private sector, the urgent creation of adequate and efficient infrastructure, particularly of energy, telecommunications, water and financial services to bring about a positive and internationally-competitive environment for economic activities. [pic]Private enterprise, private effort, and non-governmental action shall play the major role in achieving the goals of the society and the derived targets of the government. [pic]Everything shall be done to foster a strong work ethic to drive productivity.

[pic]Type of Economy

Based on these guiding principles, the Administration shall operate an economy which is [pic]market-oriented
[pic]private sector-led
[pic]highly competitive, internally and globally, particularly in areas of comparative advantage [pic]technology-driven
[pic]broad-based
[pic]humane
[pic]open
[pic]internationally significant

[pic]Objectives

Given the poor state of the economy which it inherited, the Administration shall: [pic]Revive and grow Nigeria's comatose economy
[pic]Significantly raise the standard of living of the people. [pic]Put Nigerians back to gainful work and create new employment opportunities. [pic]Reposition the economy to participate beneficially in the global economy. [pic]Make Nigeria the hub of the West African economy.

[pic]Instruments

The instruments which the Administration shall use will include the following: [pic]Stabilized market-responsive exchange rate (within narrow bands with sufficient predictability) [pic]Reduced interest rates ( to reach single-digit as soon as possible) [pic]Reduced total tax burden (to a maximum of 30 per cent of corporate and personal incomes as soon as possible). [pic]Low Customs Tariffs, especially for production inputs (at less than 10 per cent, with built-in incentives for local producers). [pic]Shift in government expenditure structure in favour of productive, economic and social sectors. [pic]Ensuring steady and adequate fuel supply.

[pic]Rehabilitation and reconstruction of infrastructure, such as electicity, roads, water supply, and so on. [pic]Enhanced incomes for workers, particularly in the public sector. [pic]Significant poverty reduction.

[pic]Special focus on Education and Human Capital Development [pic]High priority to Agriculture, Manufacturing, Small/Medium Enterprises and the Informal Sector. [pic]Institutional rationalization of government.

[pic]Privatization....
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