Nigeria: Selected Issues and Statistical Appendix
Author: International Monetary Fund
Publication Date:
11 Mar 2003
eISBN:
9781451828931
Language:
English
Keywords:
ISCR; CR; trade policy reform; government; fiscal policy rule; debt service; Nigeria; exports of goods; debt-reduction operation; debt stock; debt-servicing difficulties; debt situation; Debt service payments; Oil prices; Arrears; cash debt-service payment
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This Selected Issues paper and Statistical Appendix analyzes the key challenges facing Nigeria. The paper discusses issues and prospects in the oil and gas sector, provides basic information on the sector, and highlights the importance of strengthened governance. It describes the fiscal policy rules, which presents options for Nigeria based on the experience of other countries. The paper highlights that implementing a fiscal policy rule is identified as one possible way for Nigeria to stabilize public expenditures in the face of volatile oil prices.

Abstract

This Selected Issues paper and Statistical Appendix analyzes the key challenges facing Nigeria. The paper discusses issues and prospects in the oil and gas sector, provides basic information on the sector, and highlights the importance of strengthened governance. It describes the fiscal policy rules, which presents options for Nigeria based on the experience of other countries. The paper highlights that implementing a fiscal policy rule is identified as one possible way for Nigeria to stabilize public expenditures in the face of volatile oil prices.

VII. Debt Sustainability Analysis70

202. This section considers the prospects for achieving external debt sustainability in Nigeria against a background of 20 years of arrears accumulation, debt restructuring, and rescheduling. 71 In recent years, Nigeria has limited its cash debt-service payments to levels comparable to or somewhat lower than those of developing country oil exporters, sub-Saharan countries and African Heavily Indebted Poor Countries (HIPCs), while discriminating among its creditors and continually accruing new arrears. As a result, most international financing sources are closed to Nigeria, and debt-service payments have not significantly reduced the level of debt.

203. Two illustrative rescheduling scenarios are presented, neither of which is meant to suggest or prejudge a particular outcome for any future debt-restructuring agreement that Nigeria may enter into with its external creditors. The scenarios are based on achievement of ambitious growth rates, which would require implementation of a wide range of appropriate macroeconomic, structural, and governance measures over an extended period, and somewhat higher cash debt-service payments than made in recent years. Preferred creditors (multilaterals) hold a relatively small share of Nigeria’s debt, and most of the remaining debt is eligible for Paris Club-type rescheduling. The analysis concludes that a single concessional flow rescheduling would only provide stopgap debt relief. A concessional stock-of-debt operation could provide a comprehensive solution to Nigeria’s long-standing debt problems in a good policy environment.

A. The Origin and Development of External Debt in Nigeria

204. The origins of Nigeria’s external debt problems date back to policies pursued during the 1970s oil boom, that led to extreme vulnerability to downturns in the oil price. Successive governments emphasized heavy investment in public works, primarily aimed at building import-substituting industries. Public investment was financed by oil export earnings, some domestic financing, and relatively modest external borrowing, primarily from multilateral and bilateral sources. The exchange rate was fixed to contain external inflationary pressures. Over time, the real effective exchange rate appreciated substantially as demand pressures raised prices of nontradable goods. The appreciated exchange rate biased domestic investment in favor of projects that were capital intensive and relied heavily on imported inputs, while agriculture suffered as the rate of return to farmers fell.

205. In an environment of poor governance, dwindling external finance, and infrastructure deficiencies, a majority of the projects financed by public borrowing during the late 1970s and 1980s have failed. A study carried out by the Federal Ministry of Finance in 1996 of commercial external loans from bilateral and commercial creditors (amounting to about 70 percent of external debt outstanding in 1996) has documented in detail problems encountered by externally financed projects. 72 Typically, loans were incurred by state governments with federal guarantees, and the lender obtained insurance from an official export credit agency. Many of the projects have not been completed, owing to cost overruns or lack of finance, as external lending was progressively reduced during the 1980s. Of those projects completed, many are inoperative owing to a lack of power or other missing links in the manufacturing sector. Completed physical and social infrastructure has typically been neglected through nonexistent or inadequate maintenance. In some cases, imported goods financed by loans could not be located. No significant project that was completed and documented by the official study appears to have generated foreign exchange-denominated sales. The authorities have taken note of past deficiencies in project management and now apply a due process test to many federal-financed capital projects. However, much remains to be done at the state level of government.

206. Most of Nigeria’s external debt was contracted in the 1980s. Oil export receipts declined by over 50 percent between 1980 and 1982 (from US$24.9 billion to US$ 11.9 billion) and then by half again in 1986 (to US$6.4 billion) on account of lower world prices and smaller export volumes. The majority of Nigeria’s external public debt was accumulated in the 1980-86 period, during the civilian Shagari and military Babangida administrations, when the debt stock (including late interest) increased five-fold from US$5 billion to US$25 billion. Over this period, the debt service-to-exports ratio increased from 6 percent to 72 percent, and the ratio of external debt to goods exports increased from 17 percent to 320 percent (Figure VII-1).

Figure VII-1.
Figure VII-1.

Nigeria: External Public Debt Developments, 1977–2001

Citation: IMF Staff Country Reports 2003, 060; 10.5089/9781451828931.002.A007

Sources: Fund staff estimates; and WITS trade database.

207. From 1982 on, restrictions on access to foreign exchange led to the accumulation of arrears and the successive rescheduling and restructuring of trade credits and commercial bank debt. A policy of prioritizing payments of medium- and long-term credits, including through the centralized allocation of foreign exchange, led to the accumulation of arrears on short-term trade credits, particularly in 1982-83 and 1986. The federal government offered promissory notes issued by the Central Bank of Nigeria (CBN) and guaranteed by the federal government for eligible uninsured trade credits in 1983. The promissory notes were restructured in 1988, with a face value of US$4.9 billion. Insured claims were assumed by the federal government as debts to Paris Club creditors. Debts to London Club banks were restructured in successive agreements reached in 1984, 1987, 1989, and 1992. The final agreement in 1992 involved a debt-reduction operation in which the Nigerian authorities bought back US$3.4 billion commercial debt at a 60 percent discount (i.e. eliminating US$2.0 billion and paying off US$1.4 billion), exchanged an additional US$2.0 billion at par for collateralized par bonds maturing in 2020 (also known as Brady bonds), paid US$0.4 billion in arrears, and paid US$0.2 billion for principal collateral. Overall, the debt-reduction operation reduced London Club bank debt from US$5.8 billion to US$2.0 billion, including payments by Nigeria of US$2,2 billion, and reduced significantly Nigeria’s total debt stock.

208. Nigeria also agreed to several nonconcessional reschedulings with Paris Club creditors, beginning in 1986. Reschedulings took place in 1986,1989, and 1991 during Stand-By Arrangements with the Fund, rescheduling in total US$14 billion of arrears and eligible medium- and long-term debts. 73 In the context of continued weak oil prices and the authorities’ payment priorities, reschedulings were followed by renewed arrears accumulation, and the overall debt stock continued to rise as late/penalty interest was added to the debt stock.

209. From 1992, Nigeria’s external debt stock stabilized as debt-service payments were broadly equivalent to total interest due. The authorities limited actual debt-service payments to a ratio of net oil revenues. As a result, arrears increased sharply in years when oil revenues declined, such as 1994-95. The authorities also sought to remain current on debt service due to the largest commercial creditors (par bonds and promissory notes) and to multilateral creditors (principally the World Bank and the African Development Bank Group) and did not pay official bilateral creditors. This prioritization led to a gradual increase in the share of bilateral debt in total external debt to almost 80 percent by 2002, almost entirely on commercial terms. Nonetheless, debt indicators on balance have improved over the past decade as the average oil price—and, in parallel, government revenue and GDP—rose from its low level in the second half of the 1980s.

210. In light of its continued debt-servicing difficulties Nigeria’s access to new credits has remained extremely limited over the past decade. Access to bilateral credits was cut off, and lending from commercial creditors has been minor, very sporadic, and at market interest rates. Beginning in 1993-94, the African Development Bank and the World Bank lent to Nigeria on concessional terms, with total disbursements of about US$850 million over the period to 2001 (about 3 percent of total debt outstanding at end-2001).

211. Following democratic elections in 1999, the Obasanjo administration sought to normalize relations with creditors. Following approval of a Stand-By Arrangement in July 2000, Nigeria reached agreement with the Paris Club in December 2000 on a fourth nonconcessional rescheduling of almost the entire stock of Paris Club debt outstanding. Arrears of US$21.3 billion—representing over 90 percent of the total debt to the Paris Club—and maturities falling due in the period August 2000-July 2001 of US$ 0.3 billion were rescheduled. 74 Bilateral agreements have been completed with only three of the fifteen Paris Club creditors, in respect of about 13 percent of the debt rescheduled, but discussions are advanced with several other large creditors. Two agreements fix interest rates for the remainder of the loans, thereby lessening the likely volatility of future debt-service obligations. Table VII-1 shows the impact of the rescheduling on debt-service payments due.

Table VII-1.

Nigeria: Debt-Service Ratios, 1999-2002 1/

(In percent, unless otherwise specified)

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Sources: Ministry of Finance; Debt Management Office; and staff estimates.

Data for debt service exclude arrears.

Three-year moving average of exports of goods and nonfactor services.

212. Through end-2002 Nigeria has been accumulating new arrears on external debt-service payments. These total approximately US$2.3 billion, principally to the Paris Club on pre- and post-cutoff-date obligations and to non-Paris Club bilateral creditors. In part, debt-servicing difficulties have been attributed to the Supreme Court ruling of April 2002 that external debts should be charged upon and payable out of the revenue and assets of the part of the government that incurred the indebtedness, and not the Federation Account. With this judgment, the traditional practice of servicing external debts as a first-line charge on the Federation Account (before revenues are shared across federal, state, and local governments) was declared unconstitutional. External debt-service payments should now devolve to the individual levels of government that contracted the debts. It is provisionally estimated that the state governments would be responsible for 24 percent of debt service falling due, with the remaining 76 percent the responsibility of the federal government. In August, agreement was reached with state governments to allocate resources from the Federation Account for selected external debt-service payments. However, discussions on the modalities of servicing the debt in compliance with the Supreme Court ruling, particularly in respect of Paris Club obligations, are ongoing.

213. Nigeria’s ratios of debt service paid to exports have been generally lower than comparator groups in recent years in part owing to debt relief under the 2000 rescheduling. Debt service paid in relation to exports is lower in Nigeria than sub-Saharan Africa (average) and for developing country fuel exporters, reflecting Nigeria’s debt rescheduling in 2000-01 and arrears accumulation in 1999 and, most likely, in 2002 (Table VII.2). Debt service due before rescheduling is generally higher for Nigeria than for both these groups. Debt service paid by Nigeria has also been lower than payments made by African HIPCs in 1999-2002, with the exception of 2001.

Table VII-2.

Nigeria and Comparator Groups: Ratio of Debt Service to Exports, 1999-2002

(In percent of exports of goods and nonfactor services)

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Sources: IMF, “Heavily Indebted Poor Countries (HIPC) Initiative – Status of Implementation” (available via the Internet: http://www.imf.org); and World Economic Outlook database.

B. Prospects for Future Debt Sustainability

214. This section assesses Nigeria’s external debt situation at the end of 2002 and evaluates its sustainability over the medium to long term. The scenarios presented are subject to a number of critical assumptions concerning, inter alia, the evolution of oil prices, the willingness of creditors to restructure debts, and the stance of fiscal policy. The scenarios are, therefore, only illustrative in nature and are not intended to suggest or prejudge a particular outcome for any future debt-restructuring agreement that Nigeria may enter into its external creditors.

215. Nigeria’s medium-term balance of payments outlook, in the absence of further debt rescheduling, remains difficult. The short-term challenge is to reverse the large decline in external reserves experienced in 2002, in a context of gradually declining oil prices and oil export volume growth constraints Organization of Petroleum Exporting Countries (OPEC) quota and sluggish global demand).

216. A baseline balance of payments projection before rescheduling is shown in Table VII-3.75 Strong fiscal adjustment and no real exchange rate appreciation are the key instruments to achieve the needed import restraint over coming years.

Table VII-3.

Nigeria: Summary Balance of Payments, 2001–20

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Sources: Nigerian authorities; and staff estimates and projections.

Assumes financing gap pays interest at prevailing commercial interest reference rate.

217. The policies underpinning the macroeconomic framework are projected to improve the macroeconomic indicators over the medium term. Specifically, GDP growth is projected to accelerate to around 5 percent by 2007 as a result of a sustained implementation of appropriate macroeconomic policies, accelerated structural reform, and vigorous actions to improve governance. The current account deficit will be capped in the range of 3 ½-4 percent of GDP. Gross reserves are projected to rebuild from 4 ½ months of import coverage at end-2002 to about six months’ coverage over the medium term. Notwithstanding significant projected increases in non-debt-creating private capital flows and a gradual increase of concessional lending from multilateral agencies, financing gaps will arise on the order of US$1 billion per year over the period 2003-07 and thereafter.

218. In the before-rescheduling scenario, the NPV of external debt is projected to remain broadly unchanged at close to US$30 billion over the medium term. The progressive amortization of existing debt will be replaced by gap-filling loans on commercial terms (Figure VII-2). Cash debt service paid is assumed to amount to US$1,900 million per year during 2003-07, some 20 percent higher than actual debt service paid during 1998-2002. Other new borrowing is assumed to be on concessional terms from multilaterals, as has been the case in recent years. 76

Figure VII-2.
Figure VII-2.

Nigeria: Projected NPV of External Debt Before Rescheduling, 2001–2020

(In millions of U.S. dollars)

Citation: IMF Staff Country Reports 2003, 060; 10.5089/9781451828931.002.A007

Source: Fund staff estimates.Note: Discount rate 5.15 percent.

219. Projected increases in GDP and exports would lead to gradual improvements in debt indicators after 2007-08, but financing gaps would remain large in the before-rescheduling scenario. Improvements in the rates of growth of the denominators (exports, government revenue, and GDP) have a significant cumulative effect on both debt and debt service indicators. The NPV of debt-to-exports ratio (three-year average) will fall below 150 percent in 2010, and debt-service due to exports will drop to below 15 percent in 2008 (Figure VII.3). However, the unsustainability of the before-rescheduling scenario is indicated by the financing gaps, which will total over US$7 billion by 2007.

Figure VII-3.
Figure VII-3.

Nigeria: Debt Indicators with Concessional Reschedulings, 2001–2020

(Ratios in percent)

Citation: IMF Staff Country Reports 2003, 060; 10.5089/9781451828931.002.A007

Source: Fund staff estimates.

Rescheduling scenarios

220. In the immediate period ahead, three-fourths of debt service is payable to Paris Club creditors, and of this amount two-thirds is payable on pre-cut-off-date debt (Table VII.4). If outstanding arrears were to be paid in 2003, total debt service due would amount to US$5.1 billion.

Table VII-4.

Nigeria: Debt Stock and Forthcoming Debt Service, 2002–05

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Subject to further rescheduling under 2000 agreement, excluding arrears.

Maturities show interest only.

221. The 2000 Paris Club agreement included a goodwill clause whereby creditors agreed in principle to consider possible options to further restructure debt falling due after July 2001. This was contingent on the successful completion of the 1999 Stand-By Arrangement and an appropriate follow-on medium-term arrangement with the Fund. In the event, these terms were not met, and a further rescheduling has not taken place.

222. Nigeria does not presently qualify for a concessional rescheduling of Paris Club debt on Naples terms, but the Paris Club may nonetheless decide on an exceptional basis to offer such a rescheduling. A Naples terms rescheduling is conditional on IDA-only Status. IDA-only eligibility is dependent on maintenance of a per capita income below US$885 and a lack of creditworthiness for market-based borrowing. In addition, IDA or IDA-only eligibility is complemented by a requirement that appropriate standards of performance, including macroeconomic stability, be restored for a period, to be decided according to country circumstances. Nigeria has the income and creditworthiness characteristics of an IDA-only country (GNP of $260 in 2000 and no market access), but its ability to maintain a track record of adequate policy performance remains to be demonstrated.77, 78 However, the Paris Club has granted concessional treatment to non IDA-only countries: in December 2001, the Former Republic of Yugoslavia agreed to a 66 percent NPV reduction of eligible Paris Club debt, almost equivalent to the 67 percent NPV reduction provided under Naples terms.

223. For purely illustrative purposes, we consider flow and stock Naples terms reschedulings for eligible Paris Club debt (with comparable terms, where applicable for other creditors). The three-year flow rescheduling applies to maturities falling due during 2003-05 with NPV reductions of 67 percent; the second scenario adds a 67 percent stock-of-eligible debt reduction in 2006. Summary results of the rescheduling scenarios are shown in Figures VII.3 and VII.4 and Tables VII.5 and VII.6.

Table VII-5.

Nigeria: Naples Terms Flow Rescheduling, 2001–2020

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Source: Staff calculations.

Assumes 67 percent NPV reduction on eligible maturities falling due 2003-05. 2002 arrears rescheduled over six years.

At commercial interest reference rate.

Table VII-6.

Nigeria: Naples Terms Flow and Stock Rescheduling, 2001–20 1/

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Source: Fund staff calculations.

Assumes 67 percent NPV reduction on eligible maturities falling due 2003-05 and 67 percent NPV reduction of eligible stock in 2006 2002 arrears rescheduled over six years.

At commercial interest reference rate.

Figure VII-4:
Figure VII-4:

Nigeria: Debt-Service Ratios with Concessional Reschedulings, 2001–2020

Citation: IMF Staff Country Reports 2003, 060; 10.5089/9781451828931.002.A007

Source: Staff estimates.

224. A flow rescheduling applied to US$4.3 billion of Paris Club principal and interest falling due 2003-05 would generate significant short-term cash-flow benefits, but significant financing gaps would emerge beginning in 2006. Payments are rescheduled over 23 years, with a 6 year grace period and graduated amortization payments under Paris Club Naples terms. Official development assistance (ODA) debt is rescheduled over 40 years, with 16 years grace.79 No capitalization of moratorium interest is assumed. The implied debt reduction would be US$2.9 billion, or 9.7 percent of the end-2002 total debt stock. Cash-flow savings would significantly lower debt service in the period 2003-05, although the debt service would increase above the without rescheduling option during 2006-08 as the remainder of the 2001-02 arrears are cleared. There would be no projected financing gaps through 2005. After the consolidation period, particularly through 2008, financing gaps would reemerge, with debt service-to-exports ratios increasing from 11 percent to the 17-19 percent range.

225. Astock rescheduling in 2006, following on from the flow rescheduling of 2003-05, and applied to eligible Paris Club debt of U.S.$17.9 billion, would maintain debt-service payments on a downward trend and reduce the total stock of external debt by more than half in 2006. No financing gaps would arise over the projection period, and debt-service payments would be manageable at 10 percent of exports, 9 percent of consolidated government revenue, and 4 percent of GDP in 2006 and would decline thereafter.

226. The viability of any projection critically hinges on prospects for oil prices and growth. Oil price changes have direct impacts on foreign exchange receipts, tax revenues, and GDP and can be very large in magnitude, as illustrated in the earlier discussion of the origins of Nigeria’s debt problem in the mid-1980s. Table VII-7 shows the impact of a reduction of average oil prices of 1 standard deviation (US$4 per barrel, calculated on annual oil prices of 1991-2001) on debt-service payments under Naples flow and stock rescheduling. The impact of an oil shock is stronger in the early years of the projection period, owing to the assumption of more diversified production, revenue, and exports over time. As the oil price affects so many parameters in the Nigerian economy, it is difficult to assess whether policies could be adjusted sufficiently in response to a shock of 1 standard deviation to prevent arrears accumulation. However, such shocks could be absorbed for one or two years through a rundown of the reserves cushion. The projections assume an increase in the pace of trend growth. A reduction of trend growth to 2.7 percent (the historical average, “muddle-through” scenario discussed in the staff report) and 1.4 standard deviations below projected growth has a cumulatively large impact on debt indicators.

Table VII-7.

Nigeria; Sensitivity Analysis 2001–2020 1/

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Sources: Fund staff estimates and projections.

In percent of a three-year average of exports of goods and nonfactors services.

Consolidated government revenues, excluding grants.

Assumes a Paris Club flow rescheduling with 67 percent NPV reduction eligible maturities falling due in 2003-05, nonconcessional rescheduling of end-2002 arrears, and comparable treatment by other creditors.

Reduction of US$4 11 per harrel compared to baseline equivalent to one standard of annual average oil price for 1991-2001.

Assumes GDP growth of 2.7 percent equivalent to 1.4 standard deviations below projected growth for 2003-2020. Exports assumed to grow at same rate.

227. In both cases, adversity in trend growth and/or oil prices would not substantively call into question the medium-term viability of a concessional rescheduling with a 67 percent stock of debt reduction. However, it is difficult to assess precisely debt sustainability under various scenarios in the Nigerian context, owing to great uncertainty as to the authorities’ policy response in an environment where economic policies, especially fiscal policy, lack any firm anchor, and where external debt-service payments are highly politicized. This situation has been exacerbated by the April 2002 decision to disallow the deduction of external debt service from federation revenues, as debt-service payments are now decided on an ad hoc basis following discussions between states and the federal government.

228. Finally, the effect of some standardized adverse shocks on the external debt-to-CDP ratio have been applied to the baseline before rescheduling scenario (Figure VII-5). 80 Data and circumstances place some limitations on the shocks that can be simulated for Nigeria, and this is an area that would benefit from additional study. A onetime depreciation of 30 percent has a significant impact, with the ratio of external debt to GDP rising above 100 percent in 2003. A 2-standard-deviation shock to the GDP deflator for two years (a proxy for depreciation) also increases the debt ratio significantly, as the historical standard deviation is large. Lowering growth projections to historical average growth for 2003-04 has a more modest effect. While debt service is sensitive to interest rate changes, the proportion of debt that will in the future be at a floating rate is not clear, as up to two-thirds of the debt stock could be converted to fixed rates under the 2000 rescheduling. Thus the sensitivity to interest rate shocks will depend significantly on the outcome of the bilateral negotiations with Paris Club creditors. Similarly, as Nigeria has no market access, shocks to the current account cannot be financed by new borrowing except through arrears accumulation. Therefore, the oil price shock discussed earlier, which incorporates the impact on growth, fiscal revenue, and the balance of payments, is likely a more relevant test of sensitivity than a current account shock, which is assumed to be covered by higher gross external borrowing.

Figure VII-5.
Figure VII-5.

Nigeria: Standardized Sensitivity Tests, 2001–20

(In percent of Debt-to-GDP ratios)

Citation: IMF Staff Country Reports 2003, 060; 10.5089/9781451828931.002.A007

Source: Fund staff estimates.

STATISTICAL APPENDIX

Table 1.

Nigeria: Revised Gross Domestic Product by Sector of Origin at Current Prices, 1997–2001 1/

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Sources: Federal Office of Statistics; National Planning commission; and Fund staff estimates.

Reflects revisions made by the Fund staff through exchange rates used for oil GDP (see Dbonte and others, Nigeria Selected Issues and Statistical Appendix, IMF Staff Country Report No. 98/78 (Washington: IMF, 1998)), as well as through the use of primary data on the oil sector provided by the Nigerian National Petroleum Corporation.

Table 2.

Nigeria: Revised Gross Domestic Product by Sector of Origin at Constant 1990 Prices, 1997–2001 1/

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Sources: Federal Office of Statistics; National Planning Commission; and Fund staff estimates.

See footnote in Table 1.

Table 3.

Nigeria: Revised Gross Domestic Product by Expenditure Category at Current Prices, 1997–2001 1/

(In millions of naira)

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Sources: Federal Office of Statistics; National Planning Commission; Central Bank of Nigeria; and Fund staff estimates.

See footnote in Table 1.

Reflects adjustments made by the Fund staff to current account transactions, including: increase of non-oil and gas exports and reduction of imports (based on data reported by partner countries and entries for counterpart informal imports); and calculation of natural gas exports. These adjustments strengthen the current account balance by approximately 5 percent of GDP for the period to 2001 (most of the counterpart adjustment is shown in the errors and omissions item of the balance of payments).

National disposable income less aggregate consumption.

Reflects adjustments made by the Fund staff to current account transactions, including: increase of non-oil and gas exports and reduction of imports (based on data reported by partner countries and entries for counterpart informal imports); and calculation of natural gas exports. These adjustments strengthen the current account balance by approximately 5 percent of GDP for the period to 2001 (most of the counterpart adjustment is shown in the errors and omissions item of the balance of payments).

Table 4.

Nigeria: Revised Gross Domestic Product by Expenditure at Constant 1990 Prices, 1997–2001 1/

(In millions of naira)

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Sources: Federal Office of Statistics; National Planning Commission; and Fund staff estimates.

Reflects revisions made by the Fund staff.

Reflects adjustments made by the Fund staff to current account transactions, including: increase of non-oil and gas exports and reduction of imports (based on data reported by partner countries and entries for counterpart informal imports); and calculation of natural gas exports. These adjustments strengthen the current account balance by approximately 5 percent of GDP for the period to 2001 (most of the counterpart adjustment is shown in the errors and omissions item of the balance of payments).

National disposable income less aggregate consumption.

Domestic disposable income less aggeragate consumption.

Table 5.

Nigeria: Index of Industrial Production, 1997–2001

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Source: Central Bank of Nigeria.