HISTORIC PRESS RELEASE : Gordon Brown Seeks Partnership with Nigeria to Assist Reform [May 1999]

The press release issued by HM Treasury on 4 May 1999.

Chancellor Gordon Brown has pledged UK Government support for reform in Nigeria, but said Nigeria must demonstrate real commitment to economic and institutional reform. Economic Secretary Patricia Hewitt gave further details of the assistance that could be made available at a conference on Nigeria today.

Gordon Brown set out his plan in a letter to the Nigerian Finance Minister, Mallam Ismaila Usman, following their meeting at the IMF and World Bank Spring meeting in Washington last month. He said that Nigeria had a unique window of opportunity to accelerate the process of economic and institutional reform, and outlined a new package of measures to support Nigeria’s efforts.

Mr Brown said:

“I have offered the UK’s support to Nigeria on a wide range of issues in order to help build a stable platform upon which reform can be based.

“A clear commitment to openness, transparency and good financial management are essential parts of the reform process, and will be seen by the international community as major steps on Nigeria’s reform path.”

The UK aims to help Nigeria to build a stable platform upon which reform can be based, by:

• pro-actively seeking support for an IMF funded programme for Nigeria in the autumn and a quick return to World Bank lending;
• arguing for a permanent IMF monitoring mission at the Ministry of Finance and Central Bank to instill international confidence in the progress of reform;
• building support for a rescheduling of Nigeria’s substantial Paris Club debt, which amounts to $20 billion;
• advocating a partial debt cancellation, subject to the successful completion of funded programmes and reforms, and a debt sustainability analysis showing that Nigeria’s debt burden is unsustainable;
• sending a Treasury debt team to Nigeria in the autumn to assist in preparing their bid for debt rescheduling at the Paris Club, together with a team to provide advice on privatisation.

DFID are also providing technical assistance to the Nigerian government in the area of debt management, in addition to their significant aid programmes in the areas of health, water, education and rural livelihoods.

This assistance is offered on the basis that Nigeria demonstrates a real commitment to reform. The first step must be getting back on track with the current IMF Staff Monitored Programme (SMP) and regularising their position with the Paris Club in order to prepare for a debt rescheduling once a funded IMF programme is established.

Nigeria needs to rebuild its financial and economic reputation by moving towards greater openness and transparency. Progress in this regard will seen by the international community as major steps on Nigeria’s reform path.

A permanent IMF monitoring mission at the Ministry of Finance and Central Bank would help to ensure cooperation and would contribute to international confidence in the progress of reform. Independent audits of the Central Bank and Nigerian National Petroleum Corporation (NNPC) would be valuable in demonstrating this new commitment to sound financial management

These measures, along with early steps to tackle corruption, will be essential in building investor confidence in Nigeria.

Speaking at the FT Nigeria conference in London today, Patricia Hewitt said:

“This Government believes that poverty and social exclusion must be tackled worldwide as well as at home. This is a moral duty, fully in line with the humanitarian instincts which the people of the UK display when confronted with the plight of people in desperate need.

“Our joint aim with the Nigerian government must be no less than the elimination of abject poverty and social exclusion amongst the Nigerian people. Nigeria must take the lead, but we will support them as a partner in this effort alongside the rest of the international community.

“It is absolutely essential that Nigeria makes significant and rapid progress on economic and institutional reform. It is Nigeria’s responsibility to lead on undertaking reform itself.

“Assistance from the international community will only be of benefit in the context of wide ranging reform, undertaken by Nigeria itself. This must encompass not just economic and institutional restructuring, but also the introduction of anti-poverty policies and efforts to build public support for reform.”

The assistance is offered on the basis of continuing commitment to economic and institutional reform on the part of Nigerian government and its successors. The UK and international assistance will be effective on the basis of the Nigerian government’s commitment to economic and institutional reform continuing and accelerating leading to Nigeria’s international credibility being restored.