Prepared by Michael C. Niebling.
This account is based upon the available documents, extensive investigation of Nigeria’s regulations by Fund legal staff members, and staff mission discussions with pertinent Nigerian officials. However, it has not been reviewed by the Nigerian authorities in this form prior to publication. Invaluable background contributions have been made by two staff members of the Legal Department: Mrs. Pascale De Boeck, who participated in a June 1997 staff visit to Nigeria, and Ms. Isabelle Mouysset, who reviewed the 1997 Foreign Exchange Instructions Manual and has counseled the consultation team since on exchange system matters.
The history is outlined in Gary Moser, Scott Rogers, and Reinold van Til, Nigeria: Experience with Structural Adjustment, IMF Occasional Paper No. 148 (Washington: International Monetary Fund, March 1997), pp. 13-15 and pp. 42-43.
The increase for manufacturing and the decrease for finished goods were effective March 25, 1994.
In practice, certain major parastatals (such as those for power and telecommunications) continued to have access to foreign exchange at the official rate.
These were carried over from a 1986 second-tier foreign exchange market (SFEM) decree and the April 1990 version of the Foreign Exchange Instructions Manual.
The restriction arose from the fact that the required tax clearance certificate related to the taxes of the importer, as opposed to taxes due specifically on the amount to be remitted.
While a requirement that tax clearance certificates accompany applications for expatriates’ personal home remittances was removed, the text still retained the requirement of submission of tax related documentation. In addition, there were inconsistent references to “salary” and “income” and to both 100 percent and the former 75 percent limit on personal home remittances. Moreover, the new Manual retained language denying nonworking expatriate wives access to foreign exchange for purposes such as travel.
OMPADEC is a special fund for social and economic development projects in oil-and mineral-producing states; the Petroleum (Special) Trust Fund was set up in 1995 to receive and spend for designated purposes the revenues accruing from increases in domestic petroleum product prices.