The US yesterday urged the incoming administration in Nigeria to cooperate with the International Monetary Fund (IMF), ensure transparency in politics and eliminate graft to ensure economic development.

"Macroeconomic policy will require re-engagement with the IMF.

That re-engagement should start at the beginning of the new administration," US ambassador to Nigeria, Howard Jeter, said in a speech at a US-Nigeria Chamber of Commerce luncheon.

President Olusegun Obasanjo, who came to power in May 1999, was last month re-elected in a poll which was slammed by local and international observers as fraught with electoral malpractice.

Participation in IMF programme will provide the framework for difficult macroeconomic reforms that will send a clear message to the international and domestic investors and to foreign governments that Obasanjo's government is committed to growth with equity, the US diplomat said.

Nigeria last year rejected IMF economic reform programmes, saying that they were inconsistent with the aspirations of citizens and capable of increasing their economic hardships.

The envoy also spoke of the need for the new administration to review exchange controls to encourage manufacturing, agriculture and exports.

He further called on government to de-regulate the price of domestic fuel to encourage importers of refined petroleum products and investments in the petroleum sector.

"While the fuel price subsidy is popular, it is a drain on the health and future prospects of the Nigerian economy," he stated.

On the issue of corruption, the envoy said that there are two steps not yet taken by the Nigerian government in the fight against graft.

These are making government more transparent and encouraging greater civil society participation in decision-making about the use of public resources.

Global corruption watchdog Transparency International recently rated Nigeria, Africa's most populous country, as one of the two most corrupt nations in the world. – Sapa-AFP.