Nigeria's economic moves
Regarding the article ``Nigeria's New Leader Turns Back the Clock on Market Reforms,'' Jan. 12: The measures announced in this year's budget speech by Nigerian head of state Gen. Sani Abacha are not intended to abandon market reforms. They are designed to solve the immediate problems of the economy and make free-market reforms possible and beneficial to Nigerians and their trading partners. These problems include an intolerable budget deficit; decline in output caused by high interest rates; stagnation of employment; undervaluation of the local currency, the naira; and consequent inflation fueled by an increase in the money supply.
It is not true that ``a ban was set on movement of foreign currency into Nigeria.'' The government has merely decided that foreign exchange transactions should be carried out through the Central Bank or its agencies to neutralize the activities of speculators who lodge large amounts of naira in savings accounts to earn interest, in some cases at the rate of 60 percent. In view of this, it has become necessary to lower the interest rate to between 12 and 15 percent. This would also make it easier for prospective investors to obtain credit on easy terms to expand economic activities, provide employment opportunities, and increase production.
Other steps being taken to address the problems include decreasing government expenditure, enhancing revenue generation, reducing the budget deficit, providing financial incentives to productive projects, and improving infrastucture. Zubair Mahmud Kazaure, Washington Nigerian Ambassador to the US
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