tax evasion, slow progress in diversifying the economy, high unemployment levels, and vulnerability to shocks and insecurity (mainly in the oil sector). In addition, the private sector faces the challenges of high interest rates, poor physical infrastructure, and a burdensome administrative and institutional environment. 3.21 Implementation of government policies has increasingly become more open, transparent and predictable. This is mainly due to the adoption of the Medium-Term Expenditure Framework (MTEF), the Medium-Term Sector Strategy (MTSS) and the Fiscal Strategy Paper. The budget has also been made more accessible to the general public. 3.22 Significant progress has been made in strengthening the legal and institutional framework for sound public finance management. The introduction of the MTEF; the Cash Management Committee (CMC); the revenue-sharing formula between federal, state and local governments; and improvements in the procurement process have largely promoted the prudent management of public finances. However, performance at state and local government levels still remains inadequate. 3.23 Corruption and fraud are rampant in Nigeria and continue to concern most stakeholders. The incidences of corruption and money laundering in the public sector are believed to be very high. Fighting these economic ills seems to have been a priority for the federal government since 1999. This is shown by the introduction of numerous legislative reforms and initiatives to combat corruption and money laundering. However, anticorruption agencies are hampered by significant capacity constraints in their attempts to tackle these problems effectively. The challenge to take the anticorruption war to the state and local government levels remains. 3.24 Nigeria appreciates the critical role that regional integration plays to promote trade, international competitiveness and development. Its participation in ECOWAS, the AU and NEPAD is seen as important for achieving this goal. The challenge remains to progress more rapidly towards full integration, especially in some of the ECOWAS targets. 3.25 Nigeria has undoubtedly made significant progress in the areas of macroeconomic stabilisation and growth since 1999. Challenges, however, remain. The APR Panel recommends that Nigeria consolidate its efforts to diversify the economy so as to reduce the impact of shocks, to encourage development led by the private sector, to improve infrastructure, to create an environment conducive to business development, to reduce youth unemployment, to rationalise and transform the civil service, and to combat corruption more decisively and aggressively. 3.3 Corporate governance 3.26 Nigeria’s vast size, abundant resources, large population, strong human resource base and significant earning class suggest that there would be opportunities for private-sector development. However, as is the case with many African countries, Nigeria has systemic governance problems and capacity constraints. These problems have led to limited economic growth 9