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                            FEDERALREPUBLIC OFNIGERIA
                                CHAIRMAN'S SUMMINGUP

                               Poverty Reduction StrategyPaper
                        and Joint World Bank-IMF Staff AdvisoryNote

                      Meeting of the Board of ExecutiveDirectorsof IDA
                                      November 1,2005

        The ExecutiveDirectorsconsideredthePovertyReductionStrategyPaper(PRSP)                  -
National EconomicEmpowermentandDevelopmentStrategy                (NEEDS)- prepared bythe
Federal Governmentof Nigeria, and the Joint  IDA-IMF Staff Advisory Note.

        DirectorsnotedthechallengeofpreparingaPRSPinNigeria'sfederalcontext,and
commended the authorities for its effort to articulate a coherent and comprehensive vision for
economic growth and poverty reduction. Directors broadly agreed with the three pillars of the
PRSPandwelcomed the focus on reforming government given the country'slonghistoryof
economicmismanagementanddeep-rootedcorruption.Therewasbroadagreementwiththe
PRSP's emphasis on an inclusive growth strategy through prioritization of development       of the
non-oilsector.Directorsnoted,however,that       to be successful,suchastrategywouldrequire
much more effortto improve the investment climate, including governance and institutionsat the
state level. In this context, Directors
                                     calledaccelerating
                                          for         reformscustoms,
                                                             in      tax
administration, and the power sector.

        Directors welcomed the preparation by state governments of individual State Economic
EmpowermentandDevelopmentStrategiesconsistentwiththecountry'sPRSPandurgedthe
Federal Governmentto help states build their capacityto fully implement these state-level PRSPs.
Theyemphasized the need to strengthencoordinationofreformeffortsamongthevarious
government entitiesand levels.

        Directors stressed the importance of a good baseline to allow the Government to track
progressonbothincomeandnon-incomedimensionsofpovertyandtheachievement                      of the
MDGsin     Nigeria. In this connection,theywelcomedthe           recent completionofaLiving
Standards Measurement Survey(LSMS) which forms a credible baseline, and suggested that the
authorities ensure moreregularmonitoringofpoverty.SomeDirectors                also remarked on
importanceofstrengtheninggovernmentcapacityforpovertymonitoring,includingonnon-
income dimensions of poverty.

        Directorsagreedthatimplementation        of thereformstrategyhasbeenimpressive,
especially in the area of macroeconomic policies, and in the fight against corruption. Directors
urgedthe authorities to strengthentheinstitutionalframeworkforsustainablemacroeconomic
management by moving aggressively to adopt key pieces of fiscal management legislation, and
further strengthening transparencyofoilrevenuesmanagement.         In addition,moreprogressis
needed in budgetpreparation,presentation,monitoringandreporting.            In order to yieldthe
desired impact on poverty, Directors urged preparation of more concrete and fully costed sectoral
strategiesin line with the broad thrust and objectives
                                                    of the PRSP.

        Finally, Directors highlighted the importanceof ensuring broader and deeper stakeholder
participationintheimplementationandnextupdateoftheNEEDS.                  On thelatter,Directors
looked forwardto periodic updating.