Abstract

It became clear to Nigeria’s economic policymakers that short-run stabilization measures and increased regulation were not appropriate responses to deep-seated impediments to growth. After considerable popular debate, the Babangida Government adopted in June 1996 a comprehensive structural adjustment program (SAP) that signaled a radical departure from previous adjustment efforts. It emphasized reliance on market forces and deregulation. The SAP was originally intended to last for two years, but was extended when it was realized that implementing many of the reforms required more time. However, toward the end of 1990, the Government began to retreat from the basic reforms of the initial program, and much of the momentum of the reform effort had been lost by then. Nigeria’s adjustment efforts were supported by three stand-by arrangements with the Fund, but the Government decided not to use the Fund’s resources (Box 3). The World Bank also supported the adjustment program through a US$450 million trade policy and export diversification loan.

Experience with Structural Adjustment
  • Adamson, Yahya K., 1989, “Structural Disequilibrium and Inflation in Nigeria: A Theoretical and Empirical Analysis of the Causes and Effects of Inflation in a Developing Economy,Center for Economic Research on Africa, Research Publication No. 89.5 (Upper Montclair, New Jersey: Montclair State College, Center for Economic Research on Africa).

    • Search Google Scholar
    • Export Citation
  • Aigbokhan, Ben E., 1991, “The Naira Exchange Rate Depreciation and Domestic Inflation,The Indian Journal of Economics, Vol. 71 (April), pp. 50717.

    • Search Google Scholar
    • Export Citation
  • Asogu, J.O., 1991, “An Econometric Analysis of the Nature and Causes of Inflation in Nigeria,Central Bank of Nigeria Economic and Financial Review, Vol. 29, No. 3 (September).

    • Search Google Scholar
    • Export Citation
  • Central Bank of Nigeria, 1993, The Central Bank of Nigeria Statistical Bulletin (June).

  • Darrat, Ali F., 1985, “Monetary Explanation of Inflation: The Experience of Three Major OPEC Economies,Journal of Economics and Business, Vol. 37 (August), pp. 20921.

    • Search Google Scholar
    • Export Citation
  • Ekpo, Akpan H., 1992, “Unemployment and Inflation Under Structural Adjustment: The Nigerian Experience,East Africa Economic Review, Vol. 8 (December), pp. 10213.

    • Search Google Scholar
    • Export Citation
  • Engle, Robert F., C.W.J. Granger, and 1987, “Co-integration and Error Correction: Representation, Estimation and Testing,Econometrica, Vol. 55 (March), pp. 25176.

    • Search Google Scholar
    • Export Citation
  • Engle, Robert F., C.W.J. Granger, and eds., 1991, Long-Run Economic Relationships, Readings in Cointegration (Oxford; New York: Oxford University Press).

    • Search Google Scholar
    • Export Citation
  • Granger, C.W.J., 1986, “Developments in the Study of Cointegrated Economic Variables,Oxford Bulletin of Economics and Statistics, Vol. 48 (August), pp. 21328.

    • Search Google Scholar
    • Export Citation
  • Hendry, David F., 1986, “Econometric Modelling with Cointegrated Variables: An Overview,Oxford Bulletin of Economics and Statistics, Vol. 48 (August), pp. 20112.

    • Search Google Scholar
    • Export Citation
  • Ikhide, Sylvanus I., 1993, “Financial Liberalization and the Inflationary Process: Is There a Link in Adjusting Developing Countries?Rivista Internazionale di Scienze Economiche è Commerciali, Vol. 40 (February), pp. 15770.

    • Search Google Scholar
    • Export Citation
  • Khan, Mohsin S., Malcolm D. Knight, and 1991, “Stabilization Programs in Developing Countries: A Formal Framework,in Macroeconomic Models for Adjustment in Developing Countries, ed. by Mohsin S. Khan, Peter J. Montiel, and Nadeem U. Haque (Washington: International Monetary Fund), pp. 3885.

    • Search Google Scholar
    • Export Citation
  • Lahiri, Ashok K., 1991, “Money and Inflation in Yugoslavia,Staff Papers, International Monetary Fund, Vol. 38 (December), pp. 75188.

    • Search Google Scholar
    • Export Citation
  • Ojameruaye, E.O., 1988, “Analysis of the Determinants of the General Price Level in Nigeria,Research for Development, Vol. 5 (January), pp. 8096.

    • Search Google Scholar
    • Export Citation
  • Pinto, Brian 1989, “Black Market Premia, Exchange Rate Unification, and Inflation in Sub-Saharan Africa,World Bank Economic Review, Vol. 3 (September), pp. 32138.

    • Search Google Scholar
    • Export Citation
  • World Bank, 1993, “Nigeria—Structural Adjustment Program: Policies, Implementation, and Impact,Report No. 12366-UNI (Washington: World Bank, October).

    • Search Google Scholar
    • Export Citation
  • World Weatherdisk Associates, 1994, World Weather Database (World Weatherdisk Associates).

  • Banerjee, A., Dolado, J.J., Galbraith, J.W., and Hendry, D.F. 1993, “Co-integration, Error-Correction, and the Econometric Analysis of Non-Stationary Data,Advanced Texts in Econometrics (Oxford: Oxford University Press).

    • Search Google Scholar
    • Export Citation
  • Dotsey, Michael 1988, “The Demand for Currency in the United States,Journal of Money, Credit, and Banking (February).

  • Engle, Robert F., and Granger, C.W.J. 1987, “Co-integration and Error Correction: Representation, Estimation and Testing,Econometrica, Vol. 55 (March), pp. 5176.

    • Search Google Scholar
    • Export Citation
  • Engle, Robert F., and Granger, C.W.J. eds., 1991, Long-Run Economic Relationships, Readings in Cointegration (Oxford: New York: Oxford University Press).

    • Search Google Scholar
    • Export Citation
  • Granger, C.W.J., 1986, “Developments in the Study of Cointegrated Economic Variables,Oxford Bulletin of Economics and Statistics, Vol. 48 (August), pp. 21328.

    • Search Google Scholar
    • Export Citation
  • Granger, C.W.J., and Paul Newbold, 1986, Forecasting Economic Time Series (Orlando: Academic Press).

  • Harris, Richard I.D., 1995, Using Cointegration Analysis in Econometric Modelling, (Englewood Cliffs, New Jersey: Prentice Hall/Harvester Wheatsheaf).

    • Search Google Scholar
    • Export Citation
  • Hendry, David F., 1986, “Econometric Modelling with Cointegrated Variables: An Overview,Oxford Bulletin of Economics and Statistics, Vol. 48 (August), pp. 20112.

    • Search Google Scholar
    • Export Citation
  • Ikhide, Sylvanus I., 1993, “Financial Liberalization and the Inflationary Process: Is there a Link in Adjusting Developing Countries?,Rivista Internazionale di Scienze Economiche é Commerciali (February).

    • Search Google Scholar
    • Export Citation
  • Johansen, Soren, 1988, “Statistical Analysis of Cointegration Vectors,Journal of Economic Development and Control, Vol. 12 (June-September), pp. 23154.

    • Search Google Scholar
    • Export Citation
  • Johansen, Soren, 1991, “Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models,Econometrica, Vol. 59 (November), pp. 55180.

    • Search Google Scholar
    • Export Citation
  • Kallon, Kelfala M., 1992, “An Econometric Analysis of Money Demand in Ghana,The Journal of Developing Areas (July).

  • Khan, Moshin S., and Malcolm D., Knight, 1991, “Stabilization Programs in Developing Countries: A Formal Framework,in Macroeconomic Models for Adjustment in Developing Countries, ed. by Mohsin S. Khan, Peter J. Montiel, and Nadeem U. Haque (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Kremers, J.J.M., Ericsson, N.R. and J. Dolado, 1992, “The Power of co-integration Tests,Oxford Bulletin of Economics and Statistics, Vol. 54, pp. 32548.

    • Search Google Scholar
    • Export Citation
  • Lahiri, Ashok K., 1991, “Money and Inflation in Yugoslavia,Staff Papers, International Monetary Fund, Vol. 38 (December), pp. 75188.

    • Search Google Scholar
    • Export Citation
  • Laidler, David E.W., 1993, The Demand for Money: Theories, Evidence and Problems (New York: Harper Collins College Publishers).

  • Moser, Gary G., 1995, “The Main Determinants of Inflation in Nigeria,Staff Papers, International Monetary Fund, Vol. 42 (June), pp. 27089.

    • Search Google Scholar
    • Export Citation
  • Ojameruaye, E.O., 1988, “Analysis of the Determinants of the General Price Level in Nigeria,Research for Development (January).

  • Oresotu, F. O., and Charles N. O. Mordi, 1992, The Demand for Money Function in Nigeria: An Empirical Investigation, Central Bank of Nigeria Research Department Occasional Paper No. 3 (July).

    • Search Google Scholar
    • Export Citation
  • Reinhart, Carmen M., 1995, “Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries,Staff Papers, Vol. 42 (June), pp. 290312.

    • Search Google Scholar
    • Export Citation
  • Tseng, Wanda and Robert Corker, 1991, Financial Liberalization, Money Demand, and Monetary Policy in Asian Countries, IMF Occasional Paper 84 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • Tseng, Wanda Khor, Hoe Ee 1994, Economic Reform in China: A New Phase, IMF Occasional Paper 114 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation
  • World Bank, 1993, “Nigeria-Structural Adjustment Program: Policies, Implementation, and Impact.Report No. 12366-UNI (October).

  • Anwar, S., 1985, “Export Functions for Pakistan: A Simultaneous Equations Approach,Pakistan Journal of Applied Economics, Vol. 4, No. 1, pp. 2934.

    • Search Google Scholar
    • Export Citation
  • Arize, A., 1988, “Modelling Export Prices and Quantities in Selected Developing Economies,Atlantic Economic Journal, Vol. 16, No. 1 (March), pp. 1934.

    • Search Google Scholar
    • Export Citation
  • Arize, A., 1989, “The Demand and Supply for Exports in Nigeria in a Simultaneous Model,The Indian Economic Journal, Vol. 35, No. 4 (April-June), pp. 3343.

    • Search Google Scholar
    • Export Citation
  • Artus, J.R., 1970, “The Short-Run Effects of Domestic Demand Pressure on British Export Performance,Staff Papers, International Monetary Fund, Vol. 17, pp. 24775.

    • Search Google Scholar
    • Export Citation
  • Balassa, B., 1989, Economic Incentives and Agricultural Exports in Developing Countries,in The Balance between Industry and Agriculture in Economic Development, ed. by N. Islam, Proceedings of the Eighth World Congress of the International Economic Association, Delhi, India (London: Macmillan).

    • Search Google Scholar
    • Export Citation
  • Balassa, B., 1987, “Effects of Exchange Rate Changes in Developing Countries,Indian Journal of Economics, Vol. 68, No. 269, pp. 20322.

    • Search Google Scholar
    • Export Citation
  • Basevi, G., 1973, “Commodity Trade Equations in Project Link,The International Linkage of National Economic Models, ed. by R. Ball (Amsterdam: North-Holland).

    • Search Google Scholar
    • Export Citation
  • Bienen, H., 1983, “Oil Revenues and Policy Choice in Nigeria,World Bank Working Paper No. 592 (Washington: World Bank).

  • Bond, M., 1987, “An Econometric Study of Primary Commodity Exports from Developing Country Regions to the World,Staff Papers, International Monetary Fund, Vol. 34, No. 2 (June), pp. 191227.

    • Search Google Scholar
    • Export Citation
  • Bond, M., 1985, “Export Demand and Supply for Groups of Non-Oil Developing Countries.Staff Papers, International Monetary Fund, Vol. 32, No. 1 (March), pp. 5677.

    • Search Google Scholar
    • Export Citation
  • Donges, J.B., 1972, “Spain’s Industrial Exports: An Analysis of Supply and Demand,Weltwirtschaftliches Archiv, Band 108, Heft 2, pp. 190233.

    • Search Google Scholar
    • Export Citation
  • Donges, J.B., J. Riedel, 1977, “The Expansion of Manufactured Exports in Developing Countries: An Empirical Assessment of Supply and Demand Issues,Weltwirtschaftliches Archiv, Band 113, Heft 1, pp. 5987.

    • Search Google Scholar
    • Export Citation
  • Dunlevy, J.A., 1980, “A Test of the Capacity Pressure Hypothesis Within a Simultaneous Equations Model of Export Performance,The Review of Economics and Statistics, Vol. 62, No.1, pp. 130135.

    • Search Google Scholar
    • Export Citation
  • Eicher, C.K., and D.C. Baker, 1982, “Research on Agricultural Development in Sub-Saharan Africa—A Critical Survey,International Development Paper No. 1.

    • Search Google Scholar
    • Export Citation
  • Faini, R., 1988, “Export Supply, Capacity, and Relative Prices,World Bank Working Paper No. 123 (Washington: World Bank).

  • Goldstein, M., and M. Khan, 1978, “The Supply and Demand for Exports: A Simultaneous Approach,Review of Economics and Statistics, Vol. 60, No. 2), pp. 27585.

    • Search Google Scholar
    • Export Citation
  • Goldstein, M., and M. Khan, 1985, “Income and Price Effects in Foreign Trade,in Handbook of International Economics, ed. by R.W. Jones and P.B. Kenen (Amsterdam: North-Holland).

    • Search Google Scholar
    • Export Citation
  • Haynes, S., and J. Stone, 1983, “Specification of Supply Behavior in International Trade,Review of Economics and Statistics, Vol. 65, No. 4, pp. 62631.

    • Search Google Scholar
    • Export Citation
  • Houthakker, H.S., and D.L. Taylor, 1970, Consumer Demand in the United States (Cambridge, Massachusetts: Harvard University Press).

  • Isard, P., 1977, “How Far Can We Push the Law of One Price?American Economic Review, Vol. 67, No. 5, pp. 94248.

  • Islam, N., and A. Subramanian, 1989, “Agricultural Exports of Developing Countries: Estimates of Income and Price Elasticities of Demand and Supply,Journal of Agricultural Economics, Vol. 40, No. 2 (May), pp. 22131.

    • Search Google Scholar
    • Export Citation
  • Junz, H.B., and R. Rhomberg, 1973, “Price Competitiveness in Export Trade and Industrial Countries,American Economic Review, Vol. 63, pp. 41218.

    • Search Google Scholar
    • Export Citation
  • Khan, M.S., and K.Z. Ross, 1977, “The Functional Form of the Aggregate Import Equation,Journal of International Economics, Vol. 7, No. 2, pp. 14960.

    • Search Google Scholar
    • Export Citation
  • Learner, E.E., and R.M. Stern, 1970, Quantitative International Economics (Boston: Allyn and Bacon).

  • Lord, M.J., 1989, “Primary Commodities as an Engine for Export Growth of Latin America,in The Balance Between Industry and Agriculture in Economic Development, ed. by N. Islam, Proceedings of the Eighth World Congress of the International Economic Association, Delhi, India (London: Macmillan).

    • Search Google Scholar
    • Export Citation
  • Lundborg, P., 1981, “The Elasticities of Supply and Demand for Swedish Exports in a Simultaneous Model,Scandinavian Journal of Economics, Vol. 83, No. 3, pp. 44448.

    • Search Google Scholar
    • Export Citation
  • Magee, S.P., 1975, “Prices, Income and Foreign Trade: A Survey of Recent Economic Studies,in International Trade and Finance, ed. by P. B. Kenen, (Cambridge: Cambridge University Press).

    • Search Google Scholar
    • Export Citation
  • Moran, C., 1988, “A Structural Model for Developing Countries Manufactured Exports,The World Bank Economic Review, No. 3, pp. 32140.

    • Search Google Scholar
    • Export Citation
  • Nigeria, Federal Ministry of Agriculture, 1988, “Agriculture Policy for Nigeria,” (February).

  • N’geno, K.N., 1991, “Kenya’s Export Performance,in Trade and Development in Sub-Saharan Africa, ed. by Frimpong-Ansa, Kanbur, and Svedberg, Center for Economic Policy Research (Manchester: Manchester University Press).

    • Search Google Scholar
    • Export Citation
  • Ojo, F., 1977, “Nigeria’s Export Performance: Trends, Problems and Prospects,Pakistan Economic and Social Review, Vol. 15, No. 3–4 (Autumn-Winter), pp. 17488.

    • Search Google Scholar
    • Export Citation
  • Okonkwo, I.C., 1989, “The Erosion of Agricultural Exports in an Oil Economy: The Case of Nigeria,Journal of Agricultural Economics, Vol. 40, No. 3, pp. 37584.

    • Search Google Scholar
    • Export Citation
  • Olayide, S.O., and N. Olatunbosun, 1970, “An Econometric Analysis of Nigeria’s Export Demand,Indian Journal of Agricultural Economics, Vol. 40, No. 3 (January-March), pp. 5973.

    • Search Google Scholar
    • Export Citation
  • Oyejide, A., 1986, “The Effects of Trade and Exchange Rate Policies on Agricultural in Nigeria,International Food Policy Research Institute.

    • Search Google Scholar
    • Export Citation
  • Riedel, J., C. Hall, and R. Grawe, 1984, “Determinants of Indian Export Performance in the 1970s,Weltwirtschaftliches Archiv, Band 120, Heft 1, pp. 4163.

    • Search Google Scholar
    • Export Citation
  • Riveros., L.A., 1988, “The Impact of Labour Costs on Manufactured Exports in Developing Countries: An Econometric Analysis.World Bank Working Paper No. 123 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation
  • Scherr, S.J., 1989, “Agriculture in an Export Boom Economy: A Comparative Analysis of Policy and Performance in Indonesia, Mexico and Nigeria,World Development, Vol. 17, No. 4, pp. 54360.

    • Search Google Scholar
    • Export Citation
  • Stern, R.M., Zupnick, E. 1962, “The Theory and Measurement of Elasticity of Substitution in International Trade,Kyklos, Vol. 15, No. 3, pp. 58093.

    • Search Google Scholar
    • Export Citation
  • Teal, F., 1983, “The Supply of Agricultural Output in Nigeria, 1950–74,Journal of Development Studies, Vol. 19, No. 2, pp. 191206.

    • Search Google Scholar
    • Export Citation
  • World Bank, 1981, “Oil Palm—Subsector Review,World Bank, Washington, D.C. (July).

  • World Bank, 1982, “Nigeria: Non-Oil Export Prospects.Report No. 3771-UNI (June).

  • World Bank, 1985, “Nigeria: Agricultural Pricing Policy.Report No. 4945-UNI (June).

  • Yang, Y. Y., 1978, “Estimation of the Manufacture Export Supply Function From Developing Countries,Weltwirtschaftliches Archiv, Band 114, Heft 3, pp. 51525.

    • Search Google Scholar
    • Export Citation