Nigeria's economic ambitions burn fiercely.

 
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'Bold' is a word one sees frequently when reading about progress in the Nigerian economy. The references are mostly to the government's plans to attack a wide variety of problems the country faces.

And even a casual glance at the graph above shows that something is happening in Nigeria-something that appears to be beginning to tame the destructive high rate of inflation and inflation's equally dangerous volatility.

The graph shows the monthly percentage changes in Nigeria's consumer price index. Changes are measured against the same month in the previous year (year-on-year, in other words.)

The wild swings of 2003 through 2005 were not repeated in 2006. Of itself, this is a major achievement for a government that was all but written off by the international financial press just a year ago. According to International Monetary Fund (IMF) statistics, growth in the annual rate of inflation in Nigeria for 2006 should fall below double digits for the first time since 2001. The IMF says 2006 inflation will post an annual increase of 9.4 percent, and inflation in 2007 will grow 8 percent.

For Nigeria's beleaguered consumers, the respite from unpredictable inflation is welcome, but not so familiar as to build confidence.

On January 19, 2007, the IMF published a thorough review of Nigeria's economy and discussed prospects for 2007. The document is at pains to compliment the government on its many initiatives, but the language consistently betrays IMF anxiety that the government's spending plans may derail the good work already done.

Some of the same disquiet appears in press reports about Nigeria's prospects in 2007. Of particular concern is the violence in the Niger River delta region.

Reports also mention the 2007 elections and the economic instability that could result. In its report, for example, the IMF cautioned that spending during the run up to...

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