Four issues dominated Obasanjo's second presidential term: economic reform leading on to debt relief, a new attempt to use oil resources to modernise national infrastructure, implementing the principles of the new African Union, and controlling the outcome of the 2007 election. Economic policy was certainly more successful than during his first term. The core of his reform programme was a National Economic Empowerment and Development Strategy (NEEDS), which itself grew out of a National Economic Agenda (2003–2007) prepared towards the end of his first term as the draft of the Poverty Reduction Strategy Paper that the IMF required from governments before entering negotiations. Its preparation was mainly the work of Obasanjo's Chief Economic Adviser, Charles Soludo, an economist from the University of Nigeria who had been a consultant to the IMF and the World Bank, working under the supervision of the Economic Management Team headed by Okonjo- Iweala. During the second half of 2003 and early 2004, their draft was discussed with Nigerian economists and interested groups, whose input is obscure, before the President launched NEEDS as official policy on 29 May 2004, taking the political responsibility for it because he believed that successful implementation of inevitably unpopular policies required the technocrats to be sheltered from political pressures.

NEEDS blamed Nigeria's failure to achieve development since the mid 1970s, despite oil export earnings of about $300 billion, on ‘decades of corruption and mismanagement especially during the military administrations. The old development models of import substitution industrialization … and statism whereby government assumed the dominant role as producer and controller in the economy produced perverse incentives, inefficiencies and waste.’