Economy of Nigeria - Economic Assistance

Economic Assistance

As of October 2005, World Bank assistance to Nigeria involved 19 active projects with a total commitment value of about US$1.87 billion. Since Nigeria joined the World Bank in 1961, the World Bank has assisted it on 120 projects. In October 2005, the International Monetary Fund approved a two-year “policy support instrument” designed to promote the growth of the non-oil sector and to reduce poverty.

The United States assisted with Nigeria's economic development from 1954 through June 1974, when concessional assistance was phased out because of a substantial increase in Nigeria's per capita income resulting from rising oil revenue. By 1974, the United States had provided Nigeria with approximately $360 million in assistance, which included grants for technical assistance, development assistance, relief and rehabilitation, and food aid. Disbursements continued into the late 1970s, bringing total bilateral economic assistance to roughly $445 million.

The sharp decline in oil prices, economic mismanagement, and continued military rule characterized Nigeria in the 1980s. In 1983, USAID began providing assistance to the Nigerian Federal and State Ministries of Health to develop and implement programs in family planning and child survival. In 1992, an HIV/AIDS prevention and control program was added to existing health activities. USAID committed $135 million to bilateral assistance programs for the period of 1986 to 1996 as Nigeria undertook an initially successful Structural Adjustment Program, but later abandoned it. Plans to commit $150 million in assistance from 1993 to 2000 were interrupted by strains in U.S.-Nigerian relations over human rights abuses, the failed transition to democracy, and a lack of cooperation from the Nigerian Government on anti-narcotics trafficking issues. By the mid-1990s, these problems resulted in the curtailment of USAID activities that might benefit the military Government. Existing health programs were re-designed to focus on working through grassroots Nigerian non-governmental organizations and community groups. As a response to the Nigerian military government's plans for delayed transition to civilian rule, the Peace Corps closed its program in Nigeria in 1994.

In response to the increasingly repressive political situation, USAID established a Democracy and Governance (DG) program in 1996. This program integrates themes focusing on basic participatory democracy, human rights and civil rights, women's empowerment, accountability, and transparency with other health activities to reach Nigerians at the grassroots level in 14 of Nigeria's 36 states.

The sudden death of General Sani Abacha and the assumption of power by General Abdulsalami Abubakar in June 1998, marked a turning point in U.S.-Nigerian relations. USAID provided significant support to the electoral process by providing some $4 million in funding for international election observation, the training of Nigerian election observers and political party polling agents, as well as voter education activities. A Vital National Interest Certification was submitted to Congress in February 1999 by President Clinton to lift restrictions on U.S. Government interaction with and support to the Government of Nigeria.

Since that time, USAID has supported Nigeria to sustain democracy and to improve governance by providing training on the roles and responsibilities of elected officials in a representative democracy for newly elected officials at the federal, state, and local levels prior to their installation in May 1999 and assisting with conflict prevention and resolution in the Niger Delta, civil military relations, civil society, and political party development. In the economic area USAID supports programs in strengthening economic management and coordination, encouraging private sector development and economic reform, helping Nigeria reap the benefits of AGOA, improved agricultural technology and marketing and smallscale and microenterprise development. In addition, health assistance, focusing on HIV/AIDS, nutrition, and immunization, education, transportation and energy infrastructure, are priorities for bilateral assistance.