Analysis: IMF wants eye on Nigerian budget - United Press International

By CARMEN GENTILE
UPI Energy Correspondent
PORT HARCOURT, Nigeria, Nov. 28 (UPI) -- Nigeria should keep a close eye on its multibillion-dollar oil industry if it wants to preserve its increasing, albeit still fragile, economic growth, according to the International Monetary Fund.

"An immediate challenge is to manage Nigeria's oil revenues and saving to preserve macroeconomic stability," said the IMF in a statement released after Monday's meetings with Nigerian Finance Ministry officials in the capital, Abuja.

The international lenders noted that Nigeria's strategy proposing "spending levels that can be absorbed by the economy while allowing room for infrastructure investment" would allow Nigeria's economy to continue growing as long as federal government spending did not exceed its budget.

The IMF's call for restrained spending poses a particular challenge for Nigerian President Umaru Yar'Adua, particularly in the oil-rich yet mostly impoverished Niger Delta.

Earlier this month in his first budget proposal as president, Yar'Adua said the Nigerian government would allot $20 billion for security in the delta, where armed gangs and militants have caused the country's oil output to drop by 20 percent to 2 million barrels per day.

Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. But high unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered some of the region's youth and incited them to take up arms. Full Story