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Measurement Issues in Poverty
No full textThe paper defines poverty as certain disabilities such as the inability to participate with dignity in society. It also demonstrates that in measuring poverty, emphasis should not be mainly on income or consumption, hut that cognizance should be taken of social, economic and basic infrastructures as well as environmental factors. The paper farther mentions some inherent problems in measuring poverty such as conceptual and data problems. Once these problems are overcome, a simple head count could provide an insight into poverty measurement. J11e depth and severity of poverty can be determined by the P-Index which captures the number of the poor, the poverty gap and income distribution below the poverty line. The paper concludes with recommendations on how to overcome the problems and i1111ir111·e the measurement of poverty in Nigeria
Interest rate policies in ECOWAS countries: a comparative analysis.
No full textThis paper reviews the experiences of developing countries in the management of interest rates, with emphasis on ECOWAS countries. While the Anglophone countries have adopted independent interest rate policies overtime, the Francophone members of the West African Monetary Union (WAMU) have shared similar experiences-a common currency (the CFA franc),a central bank (BCEAO) and common monetary policies. The paper is divided into four parts, in part I, it examines the roles of, and factors affecting interest rates. The part II highlights the characteristics of interest rates in developing countries and requirements for a successful interest rate reform. Part III reviews the experiences of selected ECOWAS countries-Nigeria and Ghana in the Anglophone zone, as well as Cote d\u27 Ivoire and Senegal in the Francophone zone. Finally, part IV offers some concluding remarks
Management of foreign exchange: a peep into the next decade.
No full textThe paper examines the management of the foreign exchange in Nigeria the next decade. The paper is structured into four main sections after these introductory remarks. section 1 discusses some conceptual issues such as:-foreign exchange versus external reserves, objectives of reserve management, strategies employed in managing the reserves and techniques for reserve management. section 11 discusses tools of reserve management the third section provides some thoughts as to the direction of foreign management in the next decade. section IV summarises and concludes the paper
The Iron and the Steel Industry in Nigeria: An Assessment of Performance
No full textThe iron and steel industry is considered to play an important role in the process of rapid development and attainment self-sufficiency in the industrial sector. This paper assesses the performance of the Steel industry in Nigeria against the effective utilization of available manpower, raw material and energy resources in the country as well as the domestic technological capabilities. unfortunately, these endowments have not been optimally utilized in the planning and implementation of the steel project with result that the import components of production remain very high. Based on the declining trend in operations of the existing plants, the paper concludes that the iron and the steel industry in Nigeria is still extensively under-developed and has failed to make appreciable impact on the economy despite huge investment by the Government. The paper, therefore, suggests the adoption of mini-steel production concept and the improvement of domestic production technology
Seasonal Adjustment of Naira Exchange Rate Statistics 1970-1995
No full textThis paper uses a current statistical approach to examine and adjust the seasonalities in the Naira exchange rate statistics, vis-a-vis the U.S. Dollar and the pound sterling for a period of twenty-five (25) years. Such study is necessary as it helps to understand the behavioural pattern of a trend in an attempt to predict the future. An investigation like this also helps to expose both the short and long run tendencies of a series which may require urgent or new policy measures to be taken sooner than expected. This paper reviews the regimes of exchange rate under the period, the series of fluctuations in the trends; their causes and all the measures taken so far in an attempt to achieve stability for the Naira. To further enhance realization of the policy objectives in this direction therefore, the paper suggests some policy measures that could assist in minimizing the distortions in the Naira exchange rate system caused by various factors such as political, sociological and economic forces
Central Bank of Nigeria Statistical Bulletin June 1997
No full textFinancial data is compiled from financial statements and balance sheets, which are designed to meet legal and administrative requirements rather than economic analysis needs. The Finance and Accounts Department prepares the CBN accounting balance sheet data for the Research Department to compile the CBN analytical accounts. However, major revisions were made due to imprecise definitions, improper classification, inadequate sectorization, inaccuracies, irregular valuation procedures, and errors in data compilation on foreign assets. The Computer Services Department uses high-level computing to generate both summary and detailed analytical balance sheets based on the end-month BANKOS 302 of the CBN, Lagos branch. The consolidation of accounts of monetary authorities and deposit money banks produces monetary survey accounts. Monetary authorities usually accommodate deposit money banks\u27 liquidity needs through direct loans and advances or discounting and rediscounting their financial claims. Monthly interest rate returns are used to compute weighted average lending and deposit interest rates. Clearing House statistics show the number and value of cheques cleared within the commercial banking system, reflecting the volume of transactions in the system.
Public sector indicators include revenue, expenditure, and public debts of the Federal, State, and Local Governments. Revenue includes current receipts from oil and non-oil sectors, taxation, and grants. Expenditure is classified into recurrent and capital. External figures are converted to naira using the annual average exchange rate of the particular year. Debt conversion is a key aspect of the program, with tables showing the total number and values of applications received from Nigerians and foreigners on a yearly basis since 1988. The total amount offered for redemption is explained by the average discount rates. Promissory Notes are legal certificates of indebtedness issued by the Central Bank of Nigeria and the Federal Ministry of Finance to Nigeria\u27s creditors. Restructured debts are matured debts whose obligations cannot be fulfilled, and refinanced debt involves liquidating an existing loan with a new facility obtained from the same or different sources. Par Bonds carry the face value of the security instrument, with interest paid on the par value or face value.
The System of National Accounts (SNA) is a comprehensive set of macroeconomic accounts, balance sheets, and tables based on internationally agreed concepts, definitions, conventions, classifications, and accounting rules. It provides a comprehensive accounting framework for economic analysis, decision-making, and policy making. The compilation of the National Accounts statistics presented in this Bulletin follows the same principles. Table C.1.1 includes Gross Domestic Product, Gross Fixed Capital Formation, Private Consumption Expenditure, Government Consumption Expenditure, Gross Consumption Expenditure, and Gross National Savings. GDP at Current Factor Cost equals GDP at Current Market Prices less indirect taxes net of subsidies. Gross Fixed Capital Formation is expenditure on fixed assets, while Gross Capital Formation is the total change in the value of fixed assets plus change in stocks. Agricultural crops are defined in terms of staples and other cash crops, with livestock and livestock products excised from agriculture into a separate subgroup called livestock. Electricity generation and consumption are also included in Table C.1.9. Table C.1.10 is derived from data on agriculture, livestock, fish, and forestry from the Federal Officer of Statistics (FOS) agricultural survey reports. The first CPIs were computed separately for the Federal and Regional Capitals, but the Federal Bank of Nigeria (CBN) collaborated with FOS to improve the consistency of the CPIs. The Consumer Expenditure Survey (CES) was reviewed in 1957 to provide a single national CPI based on prices of commodities purchased and consumed by a representative set of households in selected centers from all over the country. The CPI adopted 1975 as the ruling base year, and the mean expenditures were revalued to account for time lag. In conclusion, the SNA provides a comprehensive accounting framework for economic analysis, decision-making, and policy making.
The external sector of the Nigerian economy has experienced significant changes, including the rapid depreciation of the naira, accumulation of payments arrears, and external debt problems. These changes are captured in the Balance of Payments (BOP) Statistics, which is a systematic record of economic and financial transactions between residents and non-residents. The BOP records transactions in goods, services, and income, changes in ownership, and claims on and liabilities to the rest of the world. Transactions involving payments by non-residents are classified as Credit entries, while those involving payments by the country to non-residents are Debit entries. The BOP Table D.2.1 carries the BOP Table from 1970 up to 1994 and is divided into five sub-sections: current account, capital account, net errors and omissions, exceptional financing, and change in reserves. The method of BOP compilation has been reviewed four times, and the fifth edition has been prepared to encompass both balance of payments flows and stock of external financial assets and liabilities. The Current Account is divided into visible and invisible sections, with visible accounts consisting of exports and imports, while invisible accounts include services and income accounts. Unrequited transfers are a unilateral transfer by the reporting economy to the rest of the world without asking for an equivalent value, classified as private or official. The fifth BOP Manual breaks down unrequited transfers into current and capital accounts, recording changes in a country\u27s foreign assets and liabilities, capital movements, and international investment positions. Capital can be long-term, private, or public. Portfolio investment focuses on appreciating instruments, safety, and capital gains. Capital movements can occur between a reporting economy and the rest of the world through foreign loans and investments, or by recovering loans and investments. Credit entries and debit entries are included in the capital account. The double-entry accounting system ensures equal debits and credits for every transaction, but this may not always be the case. Errors and Omissions balance differences between debits and credits in the current and capital accounts. Nigeria\u27s foreign exchange and exchange rate management has evolved from an officially pegged exchange rate system to a market-determined system
The State of the Nigerian Petroleum Industry: Performance, Problems and Outstanding Issues
No full textThis paper examines developments in the Nigerian petroleum industry in view of its prominent role in the economy and notes outstanding issues and other relevant policy implications. The paper also discusses the industry\u27s organizational and operational structure and assesses its performance in terms of production, local consumption and exports of crude oil and refined products as well as oil revenue. Major findings are that although the sub-sector continues to account for the bulk of federally-collected revenue, the growth in crude oil output, average crude export volume as well as refined petroleum products consumption have been declining, while the performance of the refineries has been sub-optimal. Identified contributory outstanding constraints include public control of the industry and lack of autonomy for the NNPC; inefficiency in production and distribution; cash .flow problems and low level of investment. The paper suggests the privatisation of the refineries, depots and pipeline operations as well as the design of appropriate incentives to promote greater s:vnergy between multinational and indigenous operators
Problems and prospects in agricultural financing in Nigeria under economic deregulation.
No full textThe paper focus on the government economic deregulation in Nigeria in 1986 which was discussed in sections. Section I of the paper reviews the trends in the agricultural finance sector before and during SAP. The perspectives of agricultural lending under deregulation is discussed ln section II. Section III analyses the formal and informal credit to agriculture, and section IV reviews the policy implications/solutions of deregulation under agricultural financing, while section V concludes the paper
On Early Warning Models for the Identification of Problem Banks in Nigeria
No full textThis paper proposes alternative early warning models which could be helpful in identifying problem banks in Nigeria. The models rely on the /ogit-analytic technique and the use of financial ratios derived from the monthly returns the licensed banks render to both the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC). The two separate models, each developed for commercial and merchant bank, are more efficient in that they drastically reduced the mis-classification errors inherent in other failure prediction models developed in the past. To illustrate the applications of the models for policy, an appraisal of the financial condition of all the reporting commercial and merchant banks in the third quarter of /995 was performed. Apart from identifying all banks that were already known to be distressed by the regulatory authorities, the results also revealed that some banks require urgent attention in order to prevent them from becoming problem banks
Promoting the Flow of Investment Resources into Nigeria\u27s Petroleum Industry
No full textThe objective of the paper is to review the investment climate and policy incentives designed for the Nigerian oil industry with a view to evaluating how supportive they have been in terms of attracting investment funds into the sector. The industry has grown over the years to become the backbone of the economy. Given its strategic role, recent revelations of possible distress in the sector attributable to fast declining investment expenditure, deserves analysis and remedial actions. The investment needs of the industry are massive. A survey of the. sector shows that there is a large resource gap between its needs and utilized funds. This has been traced to some inhibiting _ factors such as depressed profit margins, Government’s inability to discharge the cash call obligations, inadequate participation of Nigerians enterprises in the industry, community disturbances and poor enabling environment. As remedies to these problems, the paper recommends measures to shore up profitability, prompt discharge of cash call obligations and reduction of Government involvement in financing oil operations; strict enforcement of regulations on pollution and provision of basic infrastructure to the oil communities as safeguards against community disturbances; and creating an enabling investment environment through the restoration of law and order