CONFIDENTIAL
                                                                                       EDS2005-1319
                                                                                       October 31, 2005
                                                                                          11:22:38 AM


Statement by Jiayi Zou, Executive Director for China
Date of Meeting: November 1, 2005

 Nigeria: Poverty Reduction Strategy Paper and Joint IDA-IMF Staff Advisory Note

   We welcome the opportunity to discuss Nigeria’s Poverty Reduction Strategy Paper and
   Joint IDA–IMF Staff Advisory Note. We generally agree with the priorities for strengthening
   NEEDS and its implementation, as identified by staff. We do support the view that NEEDS
   is a major first step forward in defining a credible agenda for economic growth and poverty
   reduction in Nigeria.

   It is impressive that Nigeria has made remarkable progress in improving governance and
   transparency, particularly fighting corruption. The Government started to implement the
   Extractive Industries Transparency Initiative (EITI), setting an example for the countries
   across the continent. The environment for doing business is also improving. Both Nigerian
   and foreign businesses are reacting positively to recent developments in the country. Foreign
   direct investment has been significantly increased, particularly in manufacturing, steel,
   construction and other sectors.

   Although Nigeria’s economic performance has improved significantly over the last two
   years, there are still daunting development challenges ahead. Nigeria has the third highest
   number of poor people in the world, only after China and India. More than two-thirds of the
   Nigerian people are poor, despite of this country is with vast potential wealth. However, if
   business as usual approach continues, the country is not likely to achieve the Millennium
   Development Goals.

   Given the large population and pervasive poverty, Nigeria’s needs for development financing
   still far outstrip its projected domestic financing potential. As a huge plan that touches almost
   all aspects of the Nigeria's economy, NEEDS will cost about $4.5 billion through 2007, much
   of which will have to come from outside the country. Additional international development
   financing is essential if the economy’s enormous infrastructure requirements are to be met
   and progress made in power, transport, education, health and safe water, etc.

   In risk analysis Staff correctly pointed out that institutional and technical capacity within the
   public service to implement and monitor the NEEDS should be strengthened. We support the
   recommendation that the government should strengthen its framework for generating,
   regularly updating and disseminating income and non-income poverty data and its capacity
   for poverty monitoring and analysis at the NBS. As it is highlighted that there is a strong
   need over a period of time for capacity-building, where we believe that the Bank should offer
   effective technical and financing supports.
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     We are pleased to see, as the largest country in West African Region, Nigeria is playing an
     important role in regional integration. NEEDS will promote programs that develop
     information and communication technology, tourism, and entertainment and financial
     services, and the Proposed trade policy reforms will aggressively promote exports and
     harmonize tariffs with regional trade organizations while protecting local industries. The plan
     also envisages developing a deep sea port, free trade zones, and a shipbuilding facility in
     order to boost coastal shipping, international trade, and regional integration. There is no
     doubt that the process of regional integration will also benefit all the participating nations in
     West Africa.

     To conclude, we reiterate our full support the Poverty Reduction Strategy Paper of Nigeria,
     and wish the Authorities and people of Nigeria every success in implementing the PRSP.




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