To address numerous economic problems in Nigeria, government introduced series of comprehensive economic reform packages. Among the major elements of the economic reform packages were the maintenance of prudent macroeconomic policies, with recent fiscal policy focusing on increasing the quality and efficiency of spending through the rationalization and privatization of public enterprises, and deregulation of the downstream oil sector. However, not much progress has been achieved due to several inconsistencies in the conception and implementation of the economic reform programme. Experience has shown that the success of any programme depends, to a large extent, on how adequately its policies are formulated, analysed and implemented. However, the challenge facing economic management in Nigeria is inadequate capacity to appropriately develop and effectively implement good economic policies. To ensure effective policy design, analysis and implementation, economic planners, policy analysts, budget officers and economic managers need to understand the basic analytical concepts in macroeconomics and be adequately equipped with the knowledge of tools and techniques for macroeconomic analysis and management as a prerequisite for the application of macroeconomic policy instruments.