Front Matter Page

© 2004 International Monetary Fund

August 2004

IMF Country Report No. 04/242

Nigeria: Selected Issues and Statistical Appendix

This Selected Issues paper and Statistical Appendix for Nigeria was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on June 24, 2004. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Nigeria or the Executive Board of the IMF.

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Front Matter Page

INTERNATIONAL MONETARY FUND

NIGERIA

Selected Issues and Statistical Appendix

Prepared by a staff team consisting of Mr. Menachem Katz (Head), Mr. Calvin McDonald, Ms. Jeanne Gobat, Mr. Ulrich Bartsch (all AFR), Ms. Karen Ongley (PDR), Mr. Thomas Baunsgaard, and Mr. Mauricio Villafuerte (FAD)

Approved by by the African Department

June 23, 2004

Contents

• List of Acronyms

• I. Introduction

List of Acronyms

Contents

• II. A Retrospective on Policies and Performance Under Recent Fund-supported Programs

  • A. Introduction and Overview

  • B. The 2000–01 Stand-By Arrangement

  • C. Informal Monitoring Framework

  • D. Reasons for Program Failure and the Lack of Progress with Reforms

  • E. Conclusion and Lessons

• Text Tables

• II-1. Government Budget and Outturns, 1999–2002

• III. Fiscal Management Capacity—Issues and Reform Agenda

  • A. Budget Preparation

  • B. Budget Execution

  • C. Fiscal Reporting

  • D. Payroll Management

  • E. Expenditure Arrears

  • F. Operational Aspects of Fiscal Federalism

  • G. Conclusions

• Text Tables

• III-1. 2003 Federal Government Expenditure

• III-2. Federal Government Deposits in the Banking System

• III-3. Cash Releases for Federal Government Personnel and Pensions, 2000–03

• III-4a. Revenue Sharing, 2002–03 (In billions of naira)

• III-4b. Revenue Sharing, 2002–03 (In percentage)

• IV. Federal Government Debt Management Reforms

  • A. Introduction

  • B. Background

  • C. Public Debt Management Reforms

  • D. Reform Implications and Sequencing Issues

  • E. Conclusion

  • F. References

• Text Figures

• IV-1. Debt Dynamics, 1990–2003

• Text Tables

• IV-1. Public Sector Gross and Net Debt, 1990–2003

• IV-2. Sub-Saharan African Countries, Domestic and External Debt, 1980–2000

• IV-3. Public Debt Burden for the EMBI Global Countries, 1990–2002

• Text Boxes

• IV-1. Fiscal Responsibility Bill

• V. Improving Transparency in the Oil Sector

  • A. Introduction

  • B. Transparency and Accountability

  • C. The Nigerian Transparency Initiative

  • D. Oil Revenue Reporting Issues

  • E. Oil Revenue Transparency for Policy Making

  • F. Conclusions

  • G. References

• Text Figures

• V-1. Flow of Funds from the Oil Sector

• V-2. Revenue from Sales of Government Equity Crude, 2001–03

• V-3. Estimated and Reported PPT Revenue, 2001–03

• Text Tables

• V-1. EITI Government Reporting Template

• V-2. Nigeria and Selected Oil Exporting Countries: Fiscal Regimes

• Text Boxes

• V-1. G8/Nigeria Partnership

• V-2. Extractive Industries Transparency Initiative (EITI) in Nigeria, Petroleum Revenue Management Workshop

• V-3. Carried Interest Arrangements for Oil Projects

• VI. Nigeria’s Exchange Rate Regime—Experiences and Options for Further Reform

  • A. Introduction

  • B. Lessons from Nigeria’s Foreign Exchange Market Reform Attempts

  • C. Motivation for Exchange Market Unification and Reform

  • D. Issues for Oil-Exporting Countries

  • E. Operational Considerations and Options for Nigeria

  • F. References

• Text Figures

• VI-1. Nominal and Effective Exchange Rate Developments, 1986–2002

• VI-2. Dutch Auction Operations, July 2002–December 2003

• Text Tables

• VI-1. Macroeconomic Indicators, 1981–2002

• Text Boxes

• VI-1. Evolution of Foreign Exchange Markets in Nigeria (1986–2002)

• VI-2. The Current Structure of Nigerian Foreign Exchange Markets1

• VI-3. Exchange Arrangements in Selected Oil-Producing Economies

• VI-4. Foreign Exchange Market Operations in Selected Oil-exporting Countries

• VI-5. Considerations for Foreign Exchange Auctions

• VI-6. Features of a Well-Functioning Interbank Market

• VII. The Petroleum Products Market

  • A. Introduction

  • B. Industry Structure

  • C. Economic Effects of Government Involvement in Pricing

  • D. NNPC Cash Flow

  • E. Future of the Industry

  • F. References

• Text Figures

• VII-1. Official and Import Parity Gasoline Prices, June 2002-Dec. 2003

• Text Tables

• VII-1. Petroleum Product Marketing Companies (2002)

• VII-2. Basic Assumptions for Domestic Petroleum Pricing, 2000–04

• VII-3. Subsidies for Domestic Petroleum Consumption, 2001–04

• VII-4. Foregone Government Revenue, 2001–04

• VII-5. NNPC Group Summary Statement of Income and Expenditure, 2001–04

• VIII. Natural Gas Prospects

  • A. Introduction

  • B. Overview

  • C. Nigeria Liquefied Natural Gas Company (NLNG)

  • D. The Escravos Gas Project

  • E. Macroeconomic Impact of the Gas Sector

  • F. Outlook for the Domestic Gas Market

  • G. Concluding Remarks

  • H. References

• Text Tables

• VIII-1. Physical and Financial Data for Nigeria Liquefied Natural Gas (NLNG)

• VIII-2. Physical and Financial Data for the Escravos Gas Project, Phases I–III, and the West Africa Gas Pipeline

• VIII-3. Physical and Financial Data for the Gas Sector, and Macroeconomic Impact, 2002–06

• VIII-4. Domestic Gas Demand, 2003–10

• Statistical Appendix Tables

• 1. Revised Gross Domestic Product by Sector of Origin at Current Prices, 1999-2003

• 2. Revised Gross Domestic Product by Sector of Origin at Constant 1990 Prices, 1999-2003

• 3. Revised Gross Domestic Product by Expenditure Category at Current Prices, 1999-2003

• 4. Revised Gross Domestic Product by Expenditure at Constant 1990 Prices, 1999-2003

• 5. Revised Gross Domestic Product by Sector of Origin at Current Prices, 1999-2003

• 6. Selected Indicators of Agricultural Production and Prices, 1999-2003.123

• 7. Index of Industrial Production, 1999-2003

• 8. National Consumer Price Indices, 1999-2003

• 9. Urban Consumer Price Indices, 1999 - 2003

• 10. Rural Consumer Price Indices, 1999 -2003

• 11. Consolidated Government Revenue, 1998-2003

• 12. Consolidated Government Expenditure, 1998-2003

• 13. Federation Account Operations, 1998-2003

• 14. Summary Federal Government Fiscal Operations, 1998-2003

• 15. Total Expenditure of the Federal Government by Functional Classification, 1998-2003

• 16. Recurrent Expenditure of the Federal Government by Functional Classification, 1998-2003

• 17. Capital Expenditure of the Federal Government by Functional Classification, 1998-2003

• 18. Federal Government Outstanding Debt, 1998-2003

• 19. Summary of Budgetary Operations of State and Local Governments and special funds, 1998-2003

• 20. Monetary Survey, 1999–2003

• 21. Consolidated Accounts of the Central Bank, 1999–2003

• 22. Consolidated Accounts of the Commercial Banks, 1999–2003

• 23. Liquidity of Commercial Banks, 1999-2003

• 24. Balance of Payments, 1999–2003

• 25. Selected Interest Rates, 1999–2003

• 26. Imports, 1999–2003

• 27. Exports, 1999–2003

• 28. External Public Debt Stock, 1999–2003

• 29. External Debt Service 1999–2003

• Summary of the Tax System as of February 2004