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Towards Improved Competitiveness of the Economies of the West African Economic and Monetary Union
No full textAs is well known, a monetary union with a common currency confers on its members the advantage of fixed exchange rate and consequent relative price stability. While these advantages held sway up to the mid-1980s in the case of the seven member countries of the CEA franc zone in West Africa, the vulnerability of the zone to external shocks became manifest from the second half of the 1980s. Fairly persistent overvaluation of the CEA franc over time had weakened the competitiveness of the export sector leading to several economic problems including domestic and external debt arrears, capital flight, and negative growth rate. Efforts to correct the distortions in the economies witnessed the implementation of stabilization and structural adjustment measures successively. However, the poor performance record led to a decisive fifty per cent devaluation of the CFA franc in January 1994. It was believed that this action, along with complementary monetary, fiscal, and structural reform measures in each member country, and the transformation to an economic and monetary union, would restore competitiveness and self-sustaining growth. Accordingly, a general post-devaluation assessment which was undertaken showed that in many countries, inflation moderated, real GDP grew slightly, export competitiveness was restored while ‘flight capital returned. The study concludes that despite the gains made by the WAEMU countries, the challenges ahead need to be well focussed such as a greater drive for improved government revenue, need to return to international creditworthiness, and the need to move towards market-based instruments of monetary control
Central Bank of Nigeria Statistical Bulletin, December 1995
No full textFinancial data is compiled from balance sheets and financial statements, which are primarily designed for legal and administrative purposes rather than economic analysis. The Finance and Accounts Department prepares the CBN accounting balance sheet data for the Research Department, using the monthly return of Assets and Liabilities and the summary trial balance as benchmarks. The Financial Statistics Office compiles the analytical CBN balance sheet without major reclassifications or rearrangements. The consolidation of accounts of monetary authorities and deposit money banks produces monetary survey accounts. Deposit money banks are highly prone to volatility and fragility, making them subject to regulations and supervision. Clearing house statistics show the number and value of cheques cleared within the commercial banking system, reflecting the volume of transactions. Public sector indicators include revenue and expenditure of the Federal Government.
This research provides a summary of the total number and values of applications received from Nigerians and foreigners since the program\u27s inception in 1988. It also shows the total amount offered by the programme for redemption on a yearly basis, with average discount rates indicating the highest and lowest discounts offered at each auction. Debts cancelled out of auction are processed without auctions made through bidding, granted only in rare cases to meet the expedient financial needs of benefitting organizations. Promissory notes are legal certificates of indebtedness issued by both the CBN and the Federal Ministry of Finance on behalf of the Federal Government of Nigeria to Nigeria\u27s Creditors. Restructured debts are matured debts that could not be fulfilled, and new arrangements are typically entered into with creditors. Refinanced debt involves liquidating an existing loan due for maturity with a new loan obtained from the same or different source of credit. Par Bonds carry the face value of the security instrument irrespective of any premium or discount that the instrument may be accorded in the market. The System of National Accounts (SNA) is a consistent, coherent, and integrated set of macro-economic accounts, balance sheets, and tables based on internationally agreed concepts, definitions, conventions, classifications, and accounting rules. The table includes Gross Domestic Product, Gross Fixed Capital Formation, private consumption expenditure, government consumption expenditure, gross consumption expenditure, and gross national savings.
It goes further to present agricultural crops, electricity generation, and consumer price indices (CPIs) for Nigeria. Agriculture is defined in terms of staples and other cash crops, with staples including cereals, starchy roots, sugar, pulses, edible oil crops, nuts, fruits, vegetables, wine, cocoa, tea, coffee, livestock, and livestock products. Livestock and livestock products are excluded from agriculture. The tables are derived from data on agriculture, livestock, fish, and forestry from Federal Office of Statistics (FOS) agricultural survey reports. The first CPIs were computed separately for the then Federal and Regional Capitals, but the CBN and FOS felt the separate indices had some disadvantages. The Consumer Expenditure Survey (CES) was reviewed in 1957 to reflect the need for a single national CPI based on the prices of a union market basket of commodities purchased and consumed by a representative set of households in selected centers for all over the country. The CPI adopted the 1975 base as the ruling base year for indices from 1976 to 1988. However, the CPI is continually updated and rebased, with the Consumer Expenditure Survey of 1980/81 updating the base period to 1985 values. The 1985-based CPI has been restructured to indicate commodity groups such as medical care, health services, recreation, entertainment, education, and cultural services, which were not classified when the 1975 base was used.
International Trade Statistics (ITS) measure the quantities and values of goods that move into or out of a country, affecting its stock of goods. They are compiled from Customs Bills of Entry, which indicate the quantities and values of goods imported into or exported out of the country. ITS can also be derived from foreign exchange transactions. The Standard International Trade Classification (SITC) format presents ITS in six main groups: Food and Live Animals, Beverages and Tobacco, Crude Materials, Mineral Fuels, Animal and Vegetable Oils, Chemicals, Manufactured Goods, Machinery and Transport Equipment, Miscellaneous Manufactured Articles, and Miscellaneous Transactions Unclassified. The Balance of Payment (BOP) compilation captures changes in international economic transactions between residents and non-residents, including the provision and receipt of real resources, changes in ownership, and unrequited or unilateral transfers. The BOP table from 1970 to 1994 is divided into five sub-sections. The Current Account is divided into two main sections: visible and invisible. The visible accounts for tangible goods, such as exports and imports, which are recorded as credit or debit entries. The invisible section includes services and income accounts, which include freights, insurance, and other distributive services involved in international transportation. Credit entries are made when freight charges are collected by domestic airlines and shipping companies, while debit entries denote payment by residents to foreign airlines and shipping companies for the same services. The Investment Income aspect of the invisible accounts refers to accrued income on existing foreign financial assets. The third sub-account, unrequited Transfers, is a unilateral transfer from the reporting economy to the rest of the world without asking for an equivalent value. The balance on the Current Account consists of these three separate sections. The capital account records changes in a country\u27s foreign assets and liabilities through various capital movements and investments. Capital movements may take place between a reporting economy and the rest of the world by infusion of new loans and investments into the reporting economy by foreigners. However, this equality could be defective as often either debit or credit is understated
Central Bank of Nigeria Statistical Bulletin, June 1995
No full textFinancial data is compiled from balance sheets and financial statistics, which are designed for various logistical and administrative requirements rather than economic analysis. Final data compilation involves aggregating the financial system\u27s accounts to discern macroeconomic tendencies. The Finance and Accounts Department prepares the CBN accounting balance sheet data for the Research Department, using the monthly return of Assets and Liabilities (BANKOS 324) as a benchmark and the summary trial balance (BANKOS 302) as a source for detailed information. The Financial Statistics Office consolidates the accounts of monetary authorities and deposit money banks, producing monetary survey accounts. Deposit money banks are highly prone to volatility and fragility, making them susceptible to regulations and supervision. Clearing house statistics show the number and value of cheques cleared within the commercial banking system. Public sector indicators include revenue and expenditure of the Federal Government.
This research presents the Gross Domestic Product (GDP), Gross Fixed Capital Formation, Private Consumption, Gross Consumption, and Gross National Savings. GDP measures the total final domestic output of goods and services produced by residents, including indirect taxes net of subsidies. Gross Fixed Capital Formation measures the total change in value of fixed capital excluding stocks at current prices. Private Consumption Expenditure is the market value of all goods and services purchased or received as income in kind by households and non-profit institutions. Gross National Savings show the amount of domestic and foreign investment financed from domestic output, including public and private savings. Agricultural crops are classified according to the United Nations Food and Agricultural Organization (FAO) Production Year Book, which includes cereals, starchy roots, sugar, pulses, edible oil crops, nuts, fruits, vegetables, wine, cocoa, tea, coffee, livestock, and livestock products. Livestock and livestock products are excised from agriculture into a separate subgroup called livestock. Electricity generation and consumption are derived from data on agriculture, livestock, fish, and forestry from the Federal Office of Statistics (FOS) agricultural survey reports. The Consumer Price Indexes (CPIs) are designed to measure changes in the level of retail prices paid by consumers. The first CPIs were computed separately for the then Federal and Regional Capitals, but the National Consumer Expenditure Survey (CES) was revised in 1957 to reflect the need for a single national CPI based on the prices of a union market basket of commodities purchased and consumed by a representative set of households in selected centers across the country.
The Nigerian economy has experienced significant changes in recent years, including the rapid depreciation of the naira exchange rate, accumulation of payments arrears, and rescheduling of external debt obligations. These changes are captured in the Balance of Payments (BOP) compilation, which is a systematic record of economic transactions between residents and non-residents. The BOP Table from 1970 to 1994 is divided into five sub-sections, including current, capital, net errors and omissions, exceptional financing, and change in reserves. The IMF has reviewed the method of BOP compilation four times, with the fifth edition expanded to include both balance of payments flows and stock of external financial assets and liabilities. Nigeria\u27s foreign exchange rate management has also undergone transformation, transitioning from an officially-pegged system to a market-determined system. International trade occurs between a country\u27s residents and the rest of the world, and is divided into three sections: the Current Account, the Capital Account, and the Reserve. Transactions involving payments to a country by foreigners are classified as Credit entries, while those involving payments by the same country to other foreigners are Debit entries. The Balance of Payments records these transactions for a specific period. The Current Account is divided into three major sections: visible, invisible, and unrequited transfers. The visible accounts for exports and imports, while the invisible accounts for services and income. Credit entries are made when freight charges are collected by domestic airlines and shipping companies, while debit entries denote payments by residents to foreign airlines and shipping companies for same services. Unrequited transfers are unilateral transfers from the reporting economy to the rest of the world without asking for an equivalent value. The Capital Account records changes in a country\u27s foreign assets and liabilities through various capital movements and investments. Capital movements may take place between a reporting economy and the rest of the world by infusion of new loans and investments into the reporting economy by foreigners. However, this equality could be defective as often either the debit or credit is understated. Errors and Omissions arise as a balancing item, as the difference between the two accounts can lead to errors in the balance of payments
Human Development Report 1994 by the United Nations Development Programme (UNDP), New York
No full textThe central focus of the UNDP 1994 Human Development Report on sustainable human development makes its review essential due to the current global concern on sustainable economic development. The 1994 UNDP Human Development Report is divided into five major chapters. Chapter one defines the universalism of life claims and emphasizes the need for strategic planning towards sustainable human development. Chapter two highlights four essential characteristics of the new dimensions of human security, names two main components of human security and identifies eight threats to human security. Chapter three discusses disarmament in industrial and developing countries and the future of world disarmament. Chapter four proposes a new design for development co-operation including proposed institutions for the 21st century. Finally, chapter five revisits the human development index which was brought into lime light in 1990
Debt, adjustment and economic liberalization in Africa by E. Wayne Nafziger: review
No full textA review of the article Debt, Adjustmentent, and Economic Liberalization in Africa article on adjustment lending (AL), structural adjustment programmes (SAPs) and the role of the Bretton Woods institutions would be useful to policy makers in sub-Saharan Africa, Nigeria inclusive, in formulating and executing economic reform programmes
Eradication of Banking Malpractices in Nigeria: Will Law Alone Succeed?
No full textThe place of banks in the economic life of any nation is so strategic that every effort is made by the appropriate national authorities to regulate and effectively supervise banking business. This objective is often achieved through the mechanism of laws designed to purge the banking system of diverse frauds, and malpractices. This paper presents a general compendium of the socio-economic, as well as the cultural background that foster and sustain banking frauds and diverse malpractices in Nigeria. This is followed by an analysis of the various types of malpractices prevalent in the banking system, among which are malpractices by bank employees, those by outsiders (non-bank employees), and those committed by banks themselves as corporate bodies. A deontic consideration of the legal and institutional framework for the prevention, and control of banking malpractices is undertaken. The current laws on banking embody reasonably adequate provisions for the regulation of banking business in Nigeria . . However, it is revealed that legislation alone cannot achieve a clean banking system for Nigeria. The larger interest of trade, commerce, and economic prosperity demand that a clean, stable, and viable banking industry be preserved through a combination of legislative and institutional methodologies, as well as social activism, and attitudinal change in the citizenry. This new order will ensure that economic criminals will no longer be glorified over their ill-gotten wealth. The paper concludes with an attempt at articulating a prescriptive stance promotive of certain policy ends in the realisation of the objective of a clean banking system
The Challenges for Economic Management in Nigeria
No full textThe paper undertakes a critical evaluation of economic management strategies and associated programmes in Nigeria in the last twenty-five years in the context of its overall goals of increased prosperity for the populace, equitable distribution of achieved prosperity and sustaining the levels of living standards. The findings indicate negative outcomes in respect of these basic objectives. The paper then identifies some critical areas of economic management that have constrained full commitment to the pursuit of the primary goals as a result of which some policy recommendations are proposed. These include the need for macroeconomic stability, reduction and rationalisation of public - sector role in the economy, enhanced role for the private sector, intensified diversification of the economy, radical reform of external trade policy, promotion of political stability and the adoption of a comprehensive approach to national economic management
Intersectoral Financing in Nigeria, 1989 - 1992
No full textPolicy changes following the Structural Adjustment Programme (SAP) have had remarkable effects on the movement of funds between major sectors of the economy. The behaviour of economic aggregates over the period 1989 - 1992 showed that large transactions occurred in government debt instruments, the domestic loans and advances market and currency and deposits of financial system. Fund flowed from the households sector to the Federal Government and business sectors. The financial sector re/arms, including the interest rates deregulation, resulted in domestic savings exceeding capital formation, and contributed to the expansion in money supply. Lending activity of the banking system showed a fluctuating cycle, but with the business sector receiving the major ~hare, and on its heels, the financial institution and the government sectors. Movements in foreign exchange were directly related to events in the international oil market
The structure of Nigeria\u27s external trade: a focus on exports
No full textThis paper examines the factors constraining the growth of non-oil exports with a view to suggesting solution to redress the situation. In order to execute the task effectively, the rest of the paper is divided into four parts. Part two provides the macroeconomic background to export trade in Nigeria and reviews external trade policies that have been put in place by government. In part three, the issues involved in export promotion, financing and marketing are highlighted, simultaneously an x-ray of the institutional structure on which the sector relies. In part four, the authors analyse the impact of policies on the structure of Nigeria\u27s external trade, while part five contains the concluding re-marks
Central bank autonomy: historical and general perspective.
No full textThe issue of central bank autonomy is as old as central banking. This paper further reinforces the view that the debate is a continuous one, particularly in the present circumstance of the Central Bank of Nigeria\u27s history. Central bank autonomy is often discussed in the context of the functions it performs. Some of the functions are statutory, non-statutory and developmental. Usually such functions include serving as fiscal agent to the government, lender of last resort for private financial institutions during emergencies, and a regulator and supervisor of the financial system. As the principal public sector agency charged with the execution of a country\u27s monetary policy, however, the Bank can encounter a number of conflicting objectives. It must weigh long range economic growth against control of inflation and external balance. It is almost always under economic and political pressure to emphasize some goals at the expense of others in the formulation and conduct of monetary policy. The extent to which the Central Bank accommodates this pressure can depend greatly on its institutional independence. Independence of a central bank has always been discussed in the context of autonomy from governments. This is because there has always been some relationship between governments and central banks. Governments set in motion the setting up of central banks. Central banks are created by legislation and they derive their powers from such legislation. The government relies on the central bank to perform certain specialized functions on its behalf and provide certain services for the government. In such a situation, central banks cannot be completely separated from their countries government. In our comparative study of central bank independence, congnisance must be taken of the history and the ever-changing policy environment arising from changing or challenging economic developments