|
Nigeria Balance of Payments
Nearly all of Nigeria's foreign exchange assets before
the
1970s were held in British pounds sterling. Under the
post-World
War II IMF modified gold exchange standard, which lasted
until
1973, sterling was a key currency in international trade.
A
country that accumulated sterling, as Nigeria did in the
twenty
years before 1955, mostly years of restrictions on
sterling
convertibility, essentially extended credit to Britain.
During
this period, Nigeria restricted nonsterling imports,
strengthening the balance-of-payments positions of the
sterling
area and Britain's international financial position.
From 1956 to 1965, Nigeria had a persistent merchandise
trade
deficit, which changed to a surplus in the period between
1966
and 1977 (including the 1967-70 civil war) with
petroleum's rapid
growth as an export commodity (see
table 15, Appendix). In
late
1977 and 1978, demand for Nigeria's low-sulfur crude
decreased as
oil became available from the North Sea, Alaska, and
Mexico, and
as global oil companies reacted to the less favorable
participation terms offered by the Nigerian government.
Except
for the period from 1979 to 1980, when oil shortages and
prices
increased, demand for Nigerian crude remained sluggish
until
1990. From 1978 through 1983 the trade deficit continued.
In
early 1984, the Nigerian government closed Nigeri's land
borders
and international airports for several days, replaced all
old
naira notes with new currency bills, and introduced tough
exchange-control regulations designed to reduce the
repatriation
of naira smuggled abroad and prevent future convertibility
to
other currencies.
From 1984 through 1986 and in 1990, Nigeria had
surpluses,
but not because of export expansion, but because an
economic
breakdown forced Nigeria to adopt severe import
restrictions.
Nigeria's structural adjustment under World Bank auspices
brought
some stability in the domestic and international economy
but at
the expense of falling real wages and decreased government
social
spending for much of the late 1980s.
Data as of June 1991
|
