NIGERIA

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Development Challenge Other Donors FY2001 Program / Activity & Budget Information Summary Tables Program Summary Work Force Data Program/Sector Summary USAID Search: Nigeria Previous Years' Activities 2000, 1999, 1998, 1997 04     Introduction Nearly a year after inaugurating a democratically elected president and national, state and local representatives, Nigeria is slowly emerging from fifteen economically devastating years of a corrupt military dictatorship. The new millennium brought new hopes for the civilian government as it faces a delicate period of political transition. The stakes are high; Nigeria's regional neighbors, the international donor community, and the Nigerians themselves are all watching. Engagement and partnership are replacing sanctions and isolation as Nigeria slowly rises to reclaim its leadership position in Africa. Despite its endowment of resources and its enormous potential for economic growth, Nigeria remains one of the poorest countries in the world. With an estimated population of 106 million, Nigeria is Africa's most populous nation. Its gross domestic product (GDP) growth rate of 2.3% in 1998 has not kept pace with its population growth rate of 3% per annum. Notwithstanding these shortcomings, Nigeria is critical to U.S. regional economic and political goals. It is of great strategic importance to U.S. national interests as the fifth largest supplier of oil imports and is expected to supply an increasing share of oil imports to the U.S. in the coming years. With an annual GDP of $50 billion, Nigeria is Africa's second-largest economy, the second-largest U.S. trading partner in the region, and a huge potential market for American products. Current U.S. investments in Nigeria are estimated at $8 billion. The State Department has declared Nigeria one of four focus democratic transition countries, intending to direct a broad range of U.S. Government resources toward promoting democracy and maintaining stability in Nigeria. Nigeria also plays an important role as peacekeeper in the region and exerts major political and economic influence. Targeted U. S. assistance during this transition continues to support the objectives of positive and broad-based political and economic change in Nigeria. The Development Challenge The current administration in Nigeria faces a daunting task of balancing the Nigerian people's expectations of immediate improvement in the provision of social services, resolving regional and internal conflicts, redressing the inequitable distribution of power and resources, reducing endemic corruption and mismanagement, and addressing human rights abuses. The potential derailment of democracy is real, as Nigeria has major religious, ethnic, economic and security flash points. The politically destabilizing adoption of Sharia law by one state in the north which others are threatening to follow, the weekly and deadly ethnic-based riots in several states, grinding poverty, and the general insecurity and lawlessness throughout the country are examples of the challenges facing the new government. While military rule is largely discredited due to the excesses of previous regimes, and military leaders claim little interest in intervening in civilian government, the transition to democratic rule is by no means secure. Much remains to be done to shore up Nigerians' confidence that the current regime can and will fulfill their needs and expectations. Nigerians clearly do not want a return to the depredations of military rule, but they must see concrete results on many fronts soon or their faith in the new dispensation may quickly wane. USAID's assistance to Nigeria at this critical juncture is intended to bolster democratic governance, as well as expand the democratic dividend that will build confidence in the capacity of the new government to deliver on citizens' basic needs. In prior years the USAID program was curtailed because of narcotics de-certification and political sanctions. Activities were restricted to health, child survival, HIV/AIDS, population and support to local advocacy groups. They were administered by non governmental organizations (NGOs) and the United States Information Agency (USIA). The certification waiver issued in 1999 allowed the U.S. Government to work directly with the Nigerian government. USAID's transition strategy, approved in September 1999, and extending through December 2001, addresses key transitional issues. USAID is undertaking to help the Nigerian government to develop the ability and credibility of governing and judiciary institutions; oversee the military in line with the principles of democratic governance; be open to and inclusive of civil society input; reduce endemic corruption; promote private investment and the growth of the agriculture sector; reform the education system; and strengthen the commitment to increase the delivery of critical health, population, and social services. The strategy also emphasizes the provision of technical assistance, analysis and assessments, training, and capacity building to establish consensus for real change. Additionally, USAID will assist the new government to consult effectively with its constituents and civil society. USAID will exploit U.S. comparative advantage by building on existing programs and successful experiences and by drawing on the expertise of a broad range of private voluntary organizations (PVOs). In order for the U.S. to provide a full range of assistance for the next eighteen months and beyond, Nigeria will need to demonstrate concrete and tangible interest in economic reform and a willingness to tackle narcotics trafficking and transnational crimes. Nigeria must also demilitarize its society and economy by liberalizing and decentralizing control, opening up the decision-making process and allowing competition and incentives to work within a supportive legal structure. Other Donors As a result of the return to democracy, many donors have resumed or increased their assistance programs to Nigeria. Many are currently involved in updating their knowledge base and assessing their respective comparative advantage in delivering development assistance. The World Bank, European Commission (EU), Britain, Canada and Japan have launched a series of studies and assessments on the problems, issues and development assistance needs of the Nigerian economy. The UN agencies expect to continue with existing programs. All donors are concerned about Nigeria's massive debt problem and the need for the government to undertake significant economic reform measures. All eyes are on Nigeria and how macro-economic problems are handled and the response to the IMF's Staff Monitored Program. Most donors have declined to forgive Nigeria's debt but have offered rescheduling of payments instead. Efficient donor coordination is still problematic for Nigeria. The geographical separation between Lagos and Abuja hampers frequent donor coordination. The Japanese International Coordination Agency (JICA), the Canadians, the UK, the World Bank and EU have all met with USAID officials on an informal basis which is resulting in adequate information sharing at this stage. The Government of the Federal Republic of Nigeria (GFRN) has established a National Planning Commission with the purpose of coordinating donor assistance. Country Background Information Resources   CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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