Nigeria
2010: Article IV Consultation-Staff Report; Debt Sustainability Analysis; Informational Annex; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Nigeria
Author:
International Monetary Fund
Search for other papers by International Monetary Fund in
Current site
Google Scholar Close
Publication Date:
28 Feb 2011
eISBN:
9781455219988
Language:
English
Keywords:
ISCR; CR; debt; government; real GDP; price; oil revenue; private sector; stabilization fund; CBN official; fiscal policy; Inflation; Oil; gas and mining taxes; Budget planning and preparation; Oil prices; Global
Download PDF (1.1 MB)

In this study, economic growth and development of Nigeria after the crisis is discussed. Nigeria’s economy is projected to grow by 7 percent in 2011. Near-term risks to growth mostly relate to domestic factors. Nigeria’s strong external position and low debt helped mitigate the impact of the global financial crisis. Conflicting objectives of monetary policy and policy framework should focus more on price stability. Establishment of an asset management corporation to clean up the bank balance sheet is encouraged.

Abstract

In this study, economic growth and development of Nigeria after the crisis is discussed. Nigeria’s economy is projected to grow by 7 percent in 2011. Near-term risks to growth mostly relate to domestic factors. Nigeria’s strong external position and low debt helped mitigate the impact of the global financial crisis. Conflicting objectives of monetary policy and policy framework should focus more on price stability. Establishment of an asset management corporation to clean up the bank balance sheet is encouraged.

I. Context: Rapid Growth, High Inflation, Low Interest Rates, and Declining Reserves

1. The Nigerian economy has weathered both the global economic recession and its own domestic banking crisis reasonably well. The economy expanded more rapidly than expected in 2009 and continued to gain strength in 2010.1 The amnesty extended to rebels in the oil producing region led to a sharp recovery in oil production while non-oil GDP growth has remained high. Real GDP grew by 7.5 percent in the first half of 2010 (H1/H1) and is projected to have risen to 8½ percent for the year as a whole. Growth in the non-oil sector has been moderating since 2007, but remained robust at 8.3 percent in the first half of 2010, with many sectors growing at double digit rates (Figure 1 and Table 1). Strong growth and targeted public expenditures have helped Nigeria make some progress towards achieving the Millennium Development Goals (Table 6). Nonetheless, policy slippages emerged during the last year: commitment to the oil revenue rule weakened, leading to a pro-cyclical fiscal stance; inflation remained high (Figure 1); and foreign reserves fell even as oil prices have rebounded (Table 2).

Figure 1.
Figure 1.

Nigeria: Comparative Growth and Inflation Performance

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Sources: National authorities; and staff estimates.
Table 1.

Nigeria: Selected Economic and Financial Indicators, 2007–13

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Large errors and omissions in the balance of payments suggest that the current account surplus is overestimated by a significant (but unknown) amount.

If the costs of the bank recapitalization were incorporated in the budget, they would raise the NOPD by some 0.9 percent of non-oil GDP in 2011, with the relative impact diminishing over time.

Includes all components of the proposed sovereign wealth fund.

Includes $2.6 billion in 2009 on account of the SDR allocation.

Table 2.

Nigeria: Balance of Payments, 2007–13

(Billions of U.S. dollars, unless otherwise specified)

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Includes capital transfers.

Includes only intergenerational and infrastructure funds. Stabilization component is included in international reserves.

Includes $2.4 billion in 2009 on account of the SDR allocation. Projections include the stabilization component of the Sovereign Wealth Fund.

Nominal public sector short- and long-term debt, end of period.

Percent of general government fiscal revenues.

Table 3a.

Nigeria: Federal Government, 2007-13

(Billions of naira)

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Includes earmarked spending for National Judicial Council, Universal Basic Education, Niger Delta Development Corporation, Multi-Year Tariff Order, and FGN share of explicit fuel subsidy.

Includes FGN share of shared infrastructure investment funded from ECA.

Includes proceeds from privatization and sales of government properties.

For 2011-13, the budget oil prices are assumed as envisioned in the authorities’ MTEF (as of September, 2010).

Table 3b:

Nigeria. Federal Government, 2007-13

(In percent of nominal GDP)

article image
Table 3c.

Nigeria: Consolidated Government, 2007-13

(Billions of naira)

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Includes spending of customs levies and education tax; transfers to FIRS and NCS; spending from the ecology, stabilization, development of natural resources accounts; and FCT spending.

Includes cash calls and implicit fuel subsidy.

Includes projects not included in the FGN budget, even though funds are on lent by FGN.

Equal to the change in net claims on the consolidated government in the monetary survey, minus the change in state and local government deposits that are part of broad money.

If the costs of bank recapitalization were incorporated in the budget, they would raise the NOPD by some 0.9 percent of non-oil GPD in 2011, with the relative impact diminishing over time.

Table 3d.

Nigeria: Consolidated Government, 2007-13

(In percent of nominal GDP)

article image
Table 3e.

Nigeria: Consolidated and Federal Governments, 2007-13

(Percent of non-oil GDP, unless otherwise stated)

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

For 2011-13, the federal government expenditure figures are assumed as envisioned in 2010 MTEF (Sept. 2010).

If the costs of bank recapitalization were incorporated in the budget, they would raise the NOPD by some 0.9 percent of non-oil GPD in 2011, with the relative impact diminishing over time.

Table 4a.

Nigeria: Central Bank of Nigeria (CBN) Analytical Balance Sheet, 2007–13

(Billions of Naira)

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Long-term liabilities are included in other items net.

The SLG component of the ECA is included under the Net Claims on the FGN, as the FGN is the signatory of the ECA in the CBN.

Table 4b.

Nigeria: Monetary Survey, 2007–13

article image
Sources: Nigerian authorities; and IMF staff estimates and projections.

Excludes stabilization component of SWF, which is considered part of reserves assets.

The SLG component of the ECA is included under the Net Claims on the FGN, as the FGN is the signatory of the ECA in the CBN.

Table 5.

Nigeria: Financial Soundness Indicators, 2007-10

(In percent, unless otherwise indicated)

article image
Source: Nigerian authorities.

The average ratio for the 14 non-intervened banks is considerably above the minimum regulatory threshold of 10 percent, while it remains negative for the 10 intervened banks.

The average ratio for the 14 non-intervened banks remains stable at around 10 percent.

Table 6.

Nigeria: Millennium Development Goals—Status at a Glance

article image
article image
Source: Nigerian authorities: Millennium Development Goals Report 2010.

2. Fiscal policy has become highly pro-cyclical. After rising by 10 percent in 2009, consolidated government spending increased by 37 percent in 2010. This was due primarily to a surge in recurrent spending at the federal level, including a significant wage increase for the public service (Table 3). The overall consolidated fiscal deficit contracted somewhat because of high oil revenues, but the non-oil primary deficit increased by 5 percentage points to 32.2 percent of non-oil GDP. In contrast to Nigeria, most oil exporting countries are running fiscal surpluses (Figure 2).

Figure 2.
Figure 2.

Nigeria: Fiscal Developments

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Sources: Nigerian authorities; and staff estimates.

3. The pro-cyclical fiscal stance reflects the lack of adherence to the oil revenue rule. The current rule and the associated Excess Crude Account (ECA) were established in 2004 to manage revenue volatility and improve the conduct of fiscal policy across all levels of government (see Appendix I). It had been effective until recently, with the pro-cyclicality of public spending declining substantially during 2005-8 as surplus oil revenues were sterilized in the ECA. However, in the absence of a sound legal foundation, the implementation of the oil rule and savings in the ECA depended on the informal agreement among various tiers of government, leading to ad hoc disbursements from the account. Thus, despite world oil prices and domestic oil production well in excess of the budget benchmarks in 2010, the government spent all current oil revenues and drew on savings in the ECA at a time when stabilization called for a rebuilding of ECA balances.

4. Monetary policy has been accommodative, with a focus on maintaining exchange rate stability and low nominal interest rates. Inflation has been stuck in the low double digits for the past two years (12.7 percent in November) and has become pervasive across sectors (Figure 1). Nigeria may be experiencing the lingering effects of the rapid monetary expansion of 2006-09, when broad money growth frequently exceeded 40 percent (Table 4). Despite high inflation, the CBN reduced the rate on its standing deposit facility from 4 percent in 2009 to 1 percent early in 2010 (see Figure 3 and Appendix II). Consequently, real short-term interest rates have been highly negative, contributing to pressure on prices and the exchange rate. Rather than raise interest rates or let the exchange rate depreciate, the CBN sold reserves, which declined steadily throughout 2010 by some 20 percent despite strong oil revenues (Figure 4).2 The CBN raised the interest rate on its standing deposit facility to 3.25 percent in September and to 4.25 percent in November. Short-term market rates have since increased, but remain negative in real terms and reserves continued to decline. With double digit inflation and a stable nominal exchange rate, the real effective exchange rate appreciated by some 10 percent between mid-2009 and September 2010 and conventional measures now point to an over-valued exchange rate (Box 1).

Figure 3.
Figure 3.

Nigeria: Monetary and Financial Developments

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Figure 4.
Figure 4.

Nigeria: BOP and Exchange Rate Developments

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Source: Nigerian authorities; and staff estimates.

Assessment of the Real Exchange Rate Level for Nigeria

The assessment of Nigeria’s real exchange rate is based on the IMF’s CGER methodology, adapted for Nigeria’s circumstances, using data as of September 2010. The staff assessment concludes that the real exchange rate is now overvalued. One method that relates the value of the naira to its fundamental determinants suggests that the naira was in line with its predicted value. However, two other methods point to an overvaluation. The macroeconomic balance approach suggests an overvaluation of 14 percent, reflecting projected current account surpluses that are below the Nigeria-specific norm. The external sustainability approach, which compares the projected current account surplus with the level needed to stabilize net foreign assets, indicates an overvaluation of some 15 percent. These results should be treated with caution, however, given uncertainties about the estimated current account norm and balance of payments data limitations.

article image
Source: Staff estimates.

The methodological details for these three approaches are explained in the 2006 IMF Board Paper, which is available at “www.imf.org/external/np/pp/eng/2006/110806.pdf”.

These projections are adjusted to account for large errors and omissions in the balance of payments.

Extent of overvaluation (- is undervaluation) between norm and projected real exchange rate.

5. Nigeria’s external balance deteriorated in 2010 despite a favorable external environment. The terms of trade improved by 13 percent, following a drop of some 22 percent the previous year. With oil production and oil prices up sharply, oil export values jumped 25 percent. However, the current account surplus declined from 13 percent of GDP to 6.6 percent as imports of (nonoil) goods and services surged by some 33 percent. The capital and financial account—particularly foreign direct investment—also deteriorated as investors wait on the outcome of the Petroleum Industry Bill, which remains under consideration with the National Assembly.3 International reserves fell to about 6.6 months of (next year) import cover by the end of the year. These developments are in sharp contrast to the experience of other oil exporting countries, where current account positions improved on average by 3 percentage points and international reserves are generally rising. Nigeria’s external debt remains low, at about 2.2 percent of GDP, and the joint Bank-Fund debt sustainability analysis (see Supplement) indicates that the risk of external debt stress is low.

II. Positive Growth Outlook and Balanced Risks

6. The growth outlook remains positive. The authorities are projecting real GDP growth of 7 percent in 2011 and 7½ percent in the medium term, with an inflation target of 9 percent in 2011, falling to 8½ percent in the outer years. The authorities expect that oil production will hold steady in 2011 at 2.36 mbpd and will gradually rise to 2.45 mbpd by 2013, which the staff believes is achievable. Staff shares the authorities’ outlook for growth in 2011, but is less optimistic about the medium term. Non-oil GDP growth has been declining steadily for the past three years. Agriculture is the dominant non-oil activity and growth in the sector has not come from rising productivity, but from the expansion of area under cultivation indefinitely; a process that cannot sustain high rates of economic growth. On this basis, staff is projecting GDP growth to trend down to about 6¼ by 2013. The authorities’ inflation target is achievable, subject to the adoption of appropriate macroeconomic policies.

7. Risks to the outlook tend to the downside in the short term, but are otherwise generally balanced. With oil production nearly at capacity, there is a greater risk of lower rather than high production levels being realized in the immediate future. The inflation risk hinges crucially on the 2011 budget. The National Assembly could pass a more expansionary budget for 2011 than was submitted, undermining the CBN’s ability to deliver on inflation. Finally, speculation against the naira could become intense should reserves continue to fall, forcing the hand of the CBN to react quickly, resulting in either excessively high interest rates or a sharp depreciation. On the upside, a shift in government spending towards capital formation and planned reforms in the power sector could boost growth in non-oil sectors in the medium term, and passage of the Petroleum Industry Bill could unlock additional investments in the oil sector. Risks to world oil markets generally point to higher rather than lower prices. Other risks, notably weather and political uncertainty, are broadly symmetric.

III. Policy Discussions: Rebuilding Buffers and Restoring Financial Stability

8. Discussions focused on the appropriate policy mix to sustain growth and reduce inflation. Key issues included the need for fiscal consolidation (while addressing key infrastructure bottlenecks), the appropriate monetary policy stance and framework, and the completion of bank resolution. A highly expansionary fiscal stance and an accommodative monetary policy are keeping inflation high and exerting pressure on the naira. In the near term, balancing the need for expenditures on infrastructure and social programs with the need to rebuild safety buffers and reduce inflation will be the main challenge for macroeconomic policy.

A. Using Fiscal Policy to Rebuild Safety Buffers and Support Monetary Policy

9. The authorities have proposed a sharp contraction of fiscal deficits at all levels of government and a substantial rebuilding of safety buffers.4 The authorities’ fiscal framework is based on a budget oil reference price of $65 dollars through 2013, which implies a large reduction in real expenditures in 2011 and modest growth thereafter. The non-oil primary deficit (NOPD) of consolidated government would be on the order of 24.9 percent of non-oil GDP in 2011, a contraction of some 7 percentage points, with nearly two-thirds of the adjustment occurring at the federal level.5 While revenues are projected to rise moderately in 2011, the adjustment comes mostly from a near 19 percent reduction in real primary spending by the federal government, mostly on recurrent outlays, though capital spending is also budgeted to decline in real terms. The NOPD would continue to contract in the medium term, reaching 19 percent of non-oil GDP in 2013.

10. Savings of oil revenues would be substantial. Savings of surplus oil revenues would amount to $11.8 billion (4.8 percent of GDP) in 2011 and a cumulative $40 billion through 2013.6 Though the government’s debt-to-GDP ratio would rise from about 16 percent of GDP in 2010 to 22½ percent by 2013, its net financial position would improve as balances in the proposed sovereign wealth fund would rise by a greater amount.

11. The staff supports the proposed fiscal consolidation. This adjustment would mitigate demand pressures and support the CBN in achieving the authorities’ inflation objective. The expenditure cuts appear achievable. While the reduction in outlays compared to 2010 is substantial, total real spending would still be some 8 percent higher than in 2009, with cuts at the federal level coming from reductions in fuel subsidies, overhead costs, and the absence of certain large one-off expenditures in 2010. Capital outlays at the federal level are budgeted to fall to 2.8 percent of GDP in 2011, from an already low 3.6 percent in 2010.7 However, the MTEF understates total expenditures and the likely size of the NOPD by excluding expenditures on domestic infrastructure projects that might be undertaken by the proposed sovereign wealth fund (section B below). Moreover, no provision is made for the costs of bank resolution, which the authorities expect to be covered from an off-budget sinking fund.8 Nonetheless, the NOPD of the consolidated government for 2011 and for the outer years is within the range determined by staffs own assessment of fiscal sustainability (Appendix III).

12. A further reallocation of resources from recurrent to capital projects would be more supportive of long-term growth and poverty reduction. An Expenditure Review Committee, with participation from government, academia, civil society and the private sector has been established to suggest long-term savings on recurrent outlays to support fiscal consolidation and release resources for capital projects. The authorities recognize that insufficient implementation capacity—not the availability of financing—has been the major constraint to increasing spending on infrastructure and they are working to increase the capacity to implement capital projects.

13. In the medium term, fiscal policy needs to be anchored by a strong oil-revenue rule that helps build an appropriate safety buffer for a counter-cyclical policy stance at all tiers of government. Staff recommended that the medium-term fiscal framework should be built on a simple multi-year moving average oil-revenue rule that allows for a rebuilding of an appropriate stabilization buffer over the next 2-3 years. It further recommended that the rule be embedded in law to avoid ad hoc changes in the benchmark oil revenue during the budget process that could undermine the working of the Nigerian Sovereign Investment Authority (NSIA). While the authorities recognized the weaknesses in the current rule, there are currently no plans to entrench an oil-revenue rule in the draft legislation establishing the NSIA.

14. Efforts are also underway to improve expenditure efficiency and strengthen public financial management and non-oil revenues. For better cash management, a census of government accounts has been completed. As a first step, capital accounts of all ministries at the CBN are to be consolidated in 2011 and performance-based budgeting (PBB) is being considered on a pilot basis in a few selected ministries/agencies. Once fully established, PBB would help in assessing the effectiveness of public spending and facilitate the setting of expenditure priorities. As part of this process, key performance indicators have been agreed with spending units. An integrated financial management information system, which is at the final stage of procurement, will be implemented in phases and will support both the Treasury Single Account and PBB initiatives. The authorities also pointed to efforts that are underway to strengthen non-oil revenue, including a tax audit of key revenue generating agencies, and to establish a sovereign risk unit within the Ministry of Finance.

B. Nigerian Sovereign Investment Authority

15. The authorities are proposing a Nigerian Sovereign Investment Authority—a sovereign wealth fund—to replace the current oil savings mechanism. It will have three separate components: a stabilization fund, a fund for future generations, and a domestic infrastructure fund (Appendix 1). The proposed legislation (currently with the National Assembly) would establish a Governing Council that would include representatives from civil society organizations, academics, and other private sector representatives. The council would advise the Board of Directors on broad objectives of the Authority. The proposed legislation would also require an annual external audit and publication of an annual report. A minimum of 20 percent of surplus oil revenues would be allocated to each of the three components in any given year, with the remaining 40 percent allocated by the Board of Directors among the three funds.9 The infrastructure fund would finance investments in power generation, distribution and transmission, water and sewage treatment and delivery, roads, port, rail and airport facilities and other infrastructure-related projects within Nigeria.

16. The proposed NSIA would represent an improvement on some aspects of the current oil savings mechanism, but it also has some weaknesses. Withdrawals from the stabilization fund would be subject to approval of the Minister of Finance and could occur only when actual hydro-carbon revenues fall below projected revenues. This would reduce, if not eliminate, discretionary withdrawals from the stabilization fund, and abolish the current 80/20 rule. However, spending from the domestic infrastructure fund could undermine the stabilization function of the NSIA, a point appreciated by the authorities and one that would be taken into consideration when making investment decisions. Staff argued that the federal, state and local government budgets remain the most appropriate vehicles for allocating public resources to domestic infrastructure and that domestic investments by the NSIA could undermine the budget process. However, the authorities stated that the NSIA would adhere to the Santiago Principles and noted that the draft legislation requires that such investments by the NSIA be consistent, to the extent possible, with budget investment programs. Staff queried the appropriateness of building foreign assets for future generations while simultaneously issuing debt to finance deficits, noting that the only way to accumulate net financial assets for future generations was to run fiscal surpluses.

C. Clarifying the Objectives of Monetary and Exchange Rate Policy

17. The CBN pursues an eclectic monetary policy with multiple objectives. Price stability is one of these, but recent Monetary Policy Committee (MPC) statements also cite exchange rate stability as a prime objective and in addition point to the importance of maintaining low interest rates as a tool for promoting growth (Appendix II). CBN officials recognize that there are trade-offs involved in pursuing these various goals, but rely on judgment to balance competing objectives as economic developments unfold. They noted that inflation in Nigeria was significantly influenced by structural factors (limited supply response, non-competitive market structures), and hence was only weakly influenced by monetary policy; that exchange rate stability played an important role in containing inflation and inflationary expectations; and that the difficult (if now-easing) situation in the banking sector had constrained monetary policy flexibility. These factors had favored an accommodative monetary stance during 2010, coupled with intervention to support the exchange rate. Reserve losses had been manageable, and had been significantly influenced by a series of one-off transactions. Furthermore, while inflation remains above the government’s target, it has been falling slowly for the past few months. That said, the CBN began to raise policy interest rates in September 2010 (Figure 3), and official indicated that they would consider further tightening in due course, if warranted.

18. The staff argued that a commitment to a more specific inflation objective in the range of 5-10 percent would help reduce and anchor inflation expectations. At the same time, a more flexible approach to exchange rate management would prevent the emergence of one-way bets against the naira. Quantitative monetary targeting, currently in place but not adhered to, would help anchor expectations, but instability of money demand in recent years suggests caution in sticking rigidly to such a framework. The proposed fiscal retrenchment in 2011 would undoubtedly help reduce inflation, but the CBN must stand ready to let nominal interest rates adjust as needed to reduce inflation should the approved budget not deliver sufficient or timely support. For the very near term, staff recommended that the CBN raise its entire interest rate corridor if interbank rates were fall below the current MPR (6.25 percent) and should stand ready to raise the corridor further should inflation and exchange rate pressures persist. Looking forward, the staff supports the CBN’s previously stated plans to move to an inflation-targeting regime after the necessary preparatory work has been completed.

19. The CBN has been concerned at the sharp slowdown in bank lending to the private sector in 2010, along with the presence of (long-standing) high interest rate spreads. Private credit has contracted slightly in real terms since the CBN intervened in ten banks in August 2009 (Figure 5), due partly to increased emphasis on credit quality by the banks but also to weaker demand for credit. In addition to keeping interest rates low to spur private credit, the CBN has expanded the operations of its Development Finance Directorate to provide direct loans (at below-market interest rates) and to guarantee loans to preferred sectors and SMEs (Box 2). CBN credit to the private sector now amounts to about 3 percent of GDP.10 The CBN sees such intervention as necessary to ensure credit is extended to productive sectors at affordable (below-market) interest rates; absent such intervention, the pattern of lending would be focused on large well-established customers and would entail excessively high interest rates.

Figure 5.
Figure 5.

Nigeria: Credit Bubble and Implications for the Real Economy

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Source: Nigerian authorities; and staff estimates.

CBN Development Finance Initiatives

Intervention Fund for Industry and Power: The CBN has created a N500 billion fund in 2009 to support credit to the power (N300 billion) and SME manufacturing sector (N200 billion). In May 2010, it announced that part of the N300 billion for the power facility would also be used to help restructure loans to Nigerian airlines. Domestic financial institutions will channel these funds to the targeted sectors. The loans will carry a fixed 7 percent annual interest rate with 15 year maturity. These institutions will pay a 1 percent management fee to the Bank of Industry for the funds, but bear all the credit risk. To access this facility, banks will need to provide credible collateral. While the facility for SME manufacturing has been fully utilized, there is no disbursement from the power sector facility. The CBN is considering 5 loan requests from the aviation industry.

Loan Guarantees for SMEs. In addition, the CBN announced a guarantee scheme (N 300 billion) for new loans to SMEs from domestic banks and other financial institutions. These loans to SMEs will be provided at banks’ prime lending rate (about 4-5 percent less than the regular rate) and only SMEs with no non-performing existing loans will qualify. The CBN and the creditor institution will split the risk on an 80/20 basis.

Commercial Agriculture Credit Scheme. This N200 billion (0.6 percent of GDP) scheme was created in April 2009, and funds are being channeled through domestic banks to commercial agriculture producers. These loans carry an interest rate not exceeding 9 percent with a maximum maturity of 7 years. So far, about half of the amount earmarked under this facility has been utilized—mostly in 2010.

20. Staff argued that the slowdown in credit in the aftermath of a credit bubble is not unexpected and that the CBN should be cautious about pushing for higher credit growth at this time. Pursuing policies to expand credit in the near-term could create additional inflationary pressures. The diversification of lending to SMEs, agriculture and other under-served sectors should be addressed through targeted reforms, such as strengthening the credit risk bureaus, improving collateral execution and bankruptcy procedures including through expansion of commercial courts, and strengthening of the land registry. These actions would also help reduce interest rate spreads, which could be reduced further by reforms to reduce the cost of doing business in general. Staff also noted that the special development initiatives of the CBN pose on and off-balance sheet risks and constitute quasi-fiscal activities that should be undertaken, if at all, within the context of the federal government budget.11

D. Completing Bank Resolution and Preserving Financial Stability

21. In 2009, special examinations of all banks by the CBN revealed that 10 banks—accounting for about a third of banking system assets—were either insolvent or undercapitalized. The banking crisis had its origins in the forced consolidation of the sector in 2005-06, which sought to reduce the number of banks while increasing their individual size. However, the consolidation was not accompanied by sufficient supervision to verify that the capital of merged institutions was adequate. In addition, this period of consolidation was accompanied by a highly expansionary monetary policy, with the growth rate of credit to the private sector peaking at over 140 percent per year in early 2008. Most of the expanded credit was used to purchase equities, and in many cases in the stocks of domestic commercial banks that were extending the credit. When the equity bubble burst, non-performing loans (NPLs) of many banks began to mount rapidly; the ten troubled banks were particularly hit hard because of their large exposure to equity-related loans.

22. The quick and firm actions by the CBN in the second half of 2009 likely prevented a systemic banking crisis. The CBN’s actions included: (i) liquidity injections of N 620 billion (2.5 percent of 2009 GDP) to the troubled banks in the form of subordinated debt; (ii) guarantees for all interbank transactions, foreign credit lines, and pension deposits; (iii) replacing management in 8 of the intervened banks; and (iv) announcing a commitment to protect depositors and creditors against losses. These quick actions stabilized the banking system and gave the authorities the time to design a strategy for resolving the intervened banks.12

23. The newly-established Asset Management Corporation of Nigeria (AMCON) has begun to purchase the NPLs at a price in excess of book values, with a view to restoring the equity of the intervened banks to zero. The cost of cleaning up the balance sheets and recapitalizing the 10 intervened banks is estimated by the authorities at about N 2.4 trillion (7.5 percent of GDP). The authorities expect to cover the cost of bank recapitalization through grants from the CBN, a levy on banking assets, and by selling NPLs at a premium as asset prices rise. The initial recapitalization bonds are three-year, zero-coupon instruments that will be replaced at maturity with longer-term coupon-bearing bonds. Once equity in the insolvent banks is brought to zero, the banks would be sold to private investors who would bring in additional capital sufficient to meet statutory requirements.

24. Staff urged the authorities to incorporate the recapitalization costs into the federal budget so adequate provision could be formally appropriated. Staff also advised against using the CBN to finance what are essentially fiscal costs of recapitalization. Staff pointed out that the funding plan could result in a financing shortfall and/or inadequate capital for the troubled banks and therefore could undermine the success of the recapitalization effort. In response, the authorities noted that the costs to be borne by the CBN are small (less than 0.2 percent of GDP per year for a decade) and that their assumptions regarding revaluation and recovery rates of assets were conservative, largely eliminating the risk of any revenue shortfall and hence any need for budget resources. The CBN plans to remove the guarantees on pension deposits, interbank lending, and foreign credit lines in the middle of 2011, believing that these guarantees are no longer needed in the context of restored confidence in the banking system.

25. Substantial progress has been made in strengthening banking supervision since the full extent of the banking crisis came to light. On-site examinations are under way for all non-intervened banks. Lax enforcement was one of the key factors contributing to the banking crisis, so it will be important to rigorously follow up with any corrective measures that may be necessary. The CBN has already started implementing risk-based supervision on a pilot basis, and full implementation will enhance the CBN’s capacity for early detection of stress.

E. The Longer-Term Development Strategy

26. The authorities have established a highly ambitious development agenda for the next decade. The strategy (Vision 20:2020) aims for an average annual growth rate of 13½ percent over the next 10 years. This would be unprecedented and require a massive increase in the economy-wide investment rate and far-reaching changes in the overall business environment.13 While the authorities expect the bulk of the investment to come from the private sector, the annual federal government investment needs contained in the first implementation plan amount to about 7 percent of GDP, equivalent to some 250 percent of the expected capital spending in 2010. Staff cautioned that achieving such an increase in public investment while adhering to a strong counter-cyclical fiscal stance would require a major shift in outlays from recurrent to capital spending, substantial increases in non-oil revenue, and a marked improvement in project implementation capacity.

IV. Staff Appraisal

27. Nigeria’s growth remains strong and its medium-term prospects are favorable. Reforms initiated earlier this decade, which yielded large oil savings, helped mitigate the impact of the global economic crisis. The economy is expected to grow above trend this year. Continued rapid growth is projected over the medium term, based on robust (though declining) growth in non-oil sectors. Social and poverty indicators are generally improving and are expected to continue doing so if growth remains strong.

28. The fiscal consolidation contained in the proposed 2011 budget and medium-term expenditure framework is welcome. Fiscal policy in 2010 has been overly expansionary and the fiscal adjustment envisaged in the 2011 budget would help to rebuild safety buffers and provide much needed support to monetary policy. However, the needed fiscal consolidation is large and could be difficult to achieve in an election year. If a looser budget is passed by the National Assembly, monetary policy would need to be correspondingly tighter to stem inflationary and exchange rate pressures.

29. A strong transparent fiscal rule would help make counter-cyclical fiscal policy a permanent feature of Nigeria’s public finances and put an end to the boom-bust cycles caused by swings in oil prices. The government’s plan to tackle the difficult issue of institutionalizing the oil stabilization fund through the NSIA is welcome, although the proposed spending on domestic infrastructure projects risks undermining the Authority’s stabilization function and duplicating or frustrating on-budget public investment. Channeling such expenditures through government budgets in accordance with a transparent oil-revenue rule embedded in legislation would strengthen the stabilization function of the NSIA.

30. The government’s proposed measures to strengthen public finance management and non-oil revenues are appropriate. Performance-based budgeting will help assess the efficacy of spending and facilitate the prioritization of expenditures. This will be critical if the authorities are to substantially raise public investment spending without undermining service provision or macroeconomic stability. The proposed introduction of a single treasury account system will help improve cash management and provide additional support to the conduct of monetary policy. While oil receipts will continue to dominate revenues for the coming years, efforts to improve non-oil revenue collections will strengthen the overall fiscal position and reduce the vulnerability of public spending to volatile oil prices in the longer term.

31. Addressing infrastructure bottlenecks is critical for sustained high growth. However, public investment spending should be executed at a pace that does not jeopardize macroeconomic stability. In addition, while the infrastructure deficit in Nigeria is substantial, an increase in public investment could be a source of considerable waste if adequate quality control mechanisms are not put in place. The NSIA-sponsored investments in infrastructure would need to be closely coordinated with the fiscal authorities to ensure that they are consistent with budget-funded infrastructure projects and do not undermine the stabilization function of the Authority.

32. Continued inflationary pressures and the steady decline in international reserves call for a tightening of monetary policy. The recent increases in policy rates by the CBN are welcome, but additional increases will likely be needed if fiscal consolidation is not sufficient or timely.

33. Monetary policy needs a well-defined nominal anchor. The pursuit of multiple objectives by the monetary authorities sends unclear signals regarding the future path of prices, interest rates, and international reserves. Moving toward an inflation-targeting regime in the medium term would be an effective way to lower and firmly anchor inflation expectations. A more flexible exchange rate would help ensure that one-way bets against the naira do not emerge, and provide an additional policy response to external shocks. The CBN should unwind its special development finance initiatives and focus more on its core mandate of ensuring price and financial sector stability.

34. Recapitalization of the insolvent banks has begun and the authorities’ plan to return these banks to private ownership is welcome. Ensuring adequate resources to cover the costs of recapitalization will be important and the government should stand ready to provide budgetary resources if necessary. Publishing AMCON’s operations and financial results is important for promoting good governance and accountability.

35. Continued progress in strengthening the financial supervision framework is welcome. Full implementation of risk-based and consolidated supervision and stress testing would help the CBN detect emerging problems in the banking sector. Regulatory forbearance contributed to the emergence of Nigeria’s banking crisis, so strong enforcement measures should be a key component of the supervision framework.

36. The authorities’ long-term development strategy sets highly ambitious growth and investment targets. The emphasis on private-sector led growth is appropriate, as is the focus on spending more on public infrastructure. It is important, however, that the mediumterm expenditure framework continue to give priority to maintaining macroeconomic stability.

37. Staff recommends that the next Article IV consultation be held on the standard 12-month cycle.

Appendix I. Nigeria: Current Oil Stabilization Mechanism and Key Features of the Proposed NSIA

Background: The constitution provides that all tiers of government–federal, state, and local - share in oil revenues. All oil revenue inflows are received into the Federation Account. The constitution provides that oil-producing states receive 13 percent upfront as derivation grants. Of the remaining 87 percent, the federal government receives 52.7 percent, states 26.7 percent, and local governments 20.6 percent. A key fiscal policy challenge in Nigeria has been managing volatility of oil revenues in this complex federal fiscal system.

A. The Current Oil Revenue Stabilization Mechanism

Adoption of an oil-revenue based rule: An oil revenue fiscal rule was adopted in 2004. The rule is based on an informal political agreement among various levels of government and is not rooted in legislation. The agreement provided for allocation of benchmark oil revenues, which are based on a budget benchmark oil price and projected oil production. The budget oil price is politically agreed and approved by parliament. Any oil revenues in excess of the benchmark level are transferred into the “Excess Crude Account (ECA)” at the central bank in the names of the various tiers of government. A Fiscal Responsibility Act (FRA) was adopted by the federal government in 2007—partly as an attempt to formalize the “voluntary” oil revenue-based fiscal rule. The view of many legal observers, however, is that the FRA cannot bind other levels of government. In September 2007, a political agreement was reached under which all states would pass fiscal responsibility legislation, but progress in promulgating similar legislations is so far limited.

Early experience with the oil revenue rule: In early years, a conservative budget oil price relative to world market prices was used, which produced significant fiscal surpluses and sizable balances in the ECA (text figure). The ECA balances were used for debt buyback operations with official creditors and debt relief (in 2005-06), which resulted in a sharp substantial reduction in Nigeria’s external debt. Despite payments for debt buyback and the financing of power projects, the ECA balances peaked at $20 billion in 2008. In the Nigerian context, this simple fiscal rule based on budget oil price was easily understood by all participants in the political process and achieved some traction in the media, which regularly reports on the Federation Account Allocation Committee’s monthly meetings and changes in the ECA balances.

Recent experience with the oil revenue rule: The sharp decline in oil prices starting in late 2008 tested the fiscal rule and the savings account for the first time. In addition, increased unrest in the oil producing region the Niger Delta led to a decline in oil production. Consequently, the authorities withdrew resources from the ECA to offset the shortfall in oil revenue. However, a recovery in oil prices and in production (owing to an amnesty in Niger Delta) during the second half of 2009 did not halt withdrawals from the ECA. The 80/20 rule, whereby 80 percent of the excess revenues saved in the ECA in the previous year would be disbursed regardless of movements in world oil prices, and other ad hoc withdrawals from the account, have almost depleted the ECA and undermined its stabilization function.

uA01fig01

Excess Crude Account Balance

US$ billions (end of period)

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

uA01fig02

Oil prices: budget vs. actual

(US$ per barrel)

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Strengthening the legal and the institutional framework for managing the oil savings will require addressing a number of key issues. First, the oil revenue-based fiscal rule needs to be well-defined—for example a moving average of prices—and to be consistent with rebuilding the buffers and macroeconomic stability objective. Second, the objective of the oil fund (stabilization and/or savings), governance arrangements, and funding and withdrawal rules should be robust and transparent. Third, all spending financed from the oil account/fund should be integrated into fiscal strategies, budgets, and accounts. The authorities are working to establish a sovereign wealth fund—Nigerian Sovereign Investment Authority (NSIA)—that would address many of these issues.

B. Key Features of the Proposed NSIA

Institutional set up: The NSIA will be owned by all three tiers of the government and a Governing Council of owners will supervise the Authority. In addition to representatives of all owners, the Governing Council will also include members from academia, civil society and youth organizations, and other private sector representatives. A professional Board of Directors will oversee management of the NSIA.

Scope: The NSIA will comprise three funds: a stabilization fund (to offset shortfalls in hydrocarbon revenues), an infrastructure fund (to develop infrastructure), and a saving fund (for future generations). Each of these funds will be ring-fenced—there will be no cross-financing from one fund to another.

Oil revenue-based rule: The draft legislation does not specify any oil revenue rule. The final determination of the benchmark hydrocarbon revenue and the underlying oil-price benchmark is left to the National Assembly. The surplus hydrocarbon revenue is defined as the realized revenue less the benchmark revenue.

Funding: Initial funds equivalent to US$1 billion are to be transferred from the ECA. Thereafter, in years with excess hydrocarbon revenue, each of the three funds will receive at least 20 percent of the total excess amount disbursed into the NSIA and the Board will allocate the remaining 40 percent among the three funds. In addition, the NSIA’s affiliates and subsidiaries will be able to borrow (including in foreign currency).

Spending: The stabilization fund will be used to offset shortfalls in hydrocarbon revenues from the benchmark levels, on a quarterly basis and ex post. The infrastructure fund will invest in priority infrastructure and social projects. It will be able to make private equity investments in reputable firms engaged in infrastructure activities, co-invest directly in infrastructure projects, and participate in infrastructure funds with multiple outside investors. The spending from the infrastructure fund will be guided by the Authority’s rolling five-year investment plan and will initially focus on power generation and distribution, water services, and transport networks (roads, ports, rail and airport facilities).

Transparency: The NSIA accounts will be audited annually by an internationally recognised auditing firm. The NSIA will make its Annual Reports and quarterly financial reports accessible to the public.

Appendix II: Nigerian Monetary Policy Regime

The CBN pursues multiple monetary policy objectives. The CBN pursues both price and exchange rate stability without formally announcing an explicit target for either. In its monetary policy statement for 2011/20, the CBN asserts that it “would strive to achieve the government’s overall inflation objective” and sets out broad money growth targets for the two years.1 At the same time, the communiqués of the Monetary Policy Committee site “exchange rate stability” as a prime objective.2 While officially recorded capital flows are small, Nigeria is regarded as having a fairly open capital account, rendering the simultaneous achievement of these objectives difficult.3 In addition, the CBN keeps its policy rates low (currently negative in real terms) to encourage banks to lend and provides direct loans and loan guarantees to preferred sectors at below-market interest rates. In 2010, the CBN demonstrated a revealed preference for exchange rate stability, as the exchange rate remained practically unchanged while inflation was above the government’s target.

While the CBN does not announce an exchange rate target, for the past year its auction rate has not deviated from the period average by more than 1 percent. This has effectively stabilized the interbank exchange rate as well. This is achieved by the CBN’s meeting all effective demand for foreign exchange at its semi-weekly auctions (the Wholesale Dutch Auction System - or WDAS) at the preferred exchange rate. The effective demand for foreign exchange presented to the CBN window is likely affected by policies to prevent speculation. These include prohibiting commercial banks from reselling foreign exchange purchased from the CBN in the interbank market, allowing purchases from the CBN only for the immediate demand of dealers’ clients, and requiring the return of all foreign exchange purchased through the auction but not sold to clients within 5 days.

Central components of monetary policy are the Monetary Policy Rate (MPR) and the standing lending and deposit facilities. This is a fairly standard set of instruments used to guide both the level and the volatility of short-term interest rates. The CBN rarely intervenes in domestic money markets at the MPR, thus there is no market interest rate that tracks it. On the other hand, the standing facilities do create an upper and lower band for the interest rate on secured inter-bank lending. By raising, lowering, and narrowing the band, the CBN can affect both the period average and intra-period volatility of the interbank rate. Thus, when the corridor ranged from 1.0-8.0 percent during March-September 2010, the interbank rate averaged 2.0 percent. Since raising the corridor, the interbank rate has averaged 6.9 percent.

The Cash Reserve Ratio and the liquidity ratio are additional tools for managing liquidity. The CRR has been reduced gradually over the years from 9.5 percent in 2004 to 1 percent in 2009. The LR was reduced from 40 percent in 2008 to 20 percent in 2009.

uA01fig03

Nigeria Exchange Rates: Interbank Rate and CBN Sell Rate

(Naira per US dollar)

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Appendix III: An Analysis of Long-Term Fiscal Sustainability in Nigeria1

1. Introduction

The appendix provides an estimate of a long-term fiscal sustainability benchmark for Nigeria, using the permanent income hypothesis (PIH) approach. The management of fiscal policy in Nigeria has been challenging because of the country’s heavy dependence on oil and gas revenue that is uncertain, volatile and exhaustible. High volatility of oil revenue and difficulties in forecasting future oil prices make budgetary planning and execution difficult. The exhaustibility of oil raises complex issues of long-term fiscal sustainability and intergenerational equity.

Under the PIH approach, the government spends the net oil wealth at a gradual pace that ensures a constant share for each generation according to some welfare criteria – that is, government consumption smoothing over time in line with expected permanent income from oil reserves.2 This in turn can be translated into a sustainable path for the non-oil primary deficit, providing an upper bound for the permissible government non-oil deficit over the long term that can be funded from the use of oil revenue. It can be used to assess the sustainability of present policies against the benchmark and to consider alternative policy scenarios that are consistent with long-term fiscal sustainability.

2. Data and Assumptions

Forecasting future real oil and gas revenue requires projections for the oil and gas prices and the volume of oil and gas production. As for the future oil production, Nigeria is reported to have proven reserves of about 36.2 billion barrels (see BP Statistical Review of World Energy, June 2008). The proven gas reserves are reported to be 33.3 billion barrels of oil equivalent (Figure 1). Following scenarios are evaluated (Table 1):

  • In baseline I, oil prices are based on the IMF’s World Economic Outlook (WEO) projections for 2010-15 and the assumption that the (long-run) oil price will remain at the 2015 level (US$79.53/barrel) indefinitely.

  • In baseline II, oil price projections are based on the WEO projections for 2010-15 and the long-run real oil price of US$122.81 per barrel in 2035 which is from the U.S. Energy Information Administration’s Annual Energy Outlook 2010 (AEO).

  • Alternative scenarios: Two additional price paths, higher long-run oil price ($202 per barrel in 2035) and lower long-run oil price ($42.49 per barrel in 2035) from AEO, are also considered. The gas price projections (baseline, higher price, and lower price scenarios) are taken from AEO. Additionally, two alternative scenarios based on reserves are explored.

Figure 1.
Figure 1.

Long-Term Production Profile of Oil and Gas: Nigeria

Citation: IMF Staff Country Reports 2011, 057; 10.5089/9781455219988.002.A001

Table 1.

Permanently Sustainable Non-oil Primary Deficit: Main Results and Sensitivity Analysis

article image

Gas tax take as a percent of total gas production value.

Quoted oil and gas prices are in 2009 US dollars.

The baseline long-run real interest rate is assumed to be 3 percent which is broadly in line with the historical average yields of 10-year government bonds in industrial countries minus inflation rate. Two alternative scenarios, higher (4 percent) and lower (2 percent) real long-run interest rates, are also considered. The oil tax take is kept constant at the 2006-08 average level of 67.7 percent of total value of oil production, and the gas take is also kept constant at the 2004-08 average of 6.74 percent of total gas production value.

3. Main Results and Issues for Consideration

Under the baseline assumptions, the permanently sustainable non-oil primary deficit (PSNOPD) in Nigeria is estimated to be around 24-29 percent of non-oil GDP. See Table 1. However, the PSNOPD estimate is sensitive to the underlying assumptions on prices and parameters. Under the baseline parameters, the lower price scenario yields a PSNOPD of 13.6 percent of non-oil GDP, whereas the higher price scenario produces an estimate of 48.5 percent of non-oil GDP for PSNOPD. With 2 percent real interest rate and other baseline parameters, the PSNOPD ranges from 10.7 to 38.9 percent of non-oil GDP under various price scenarios. Nonetheless, the results suggest that under conservative (but not pessimistic) assumptions on oil and gas prices (baseline scenarios I and II), the estimated PSNOPD is around 24-29 percent of non-oil GDP, on average, for various alternative parameters.

In general, the PIH provides some useful sustainability benchmark to guide fiscal policy over the medium term. However, the design of a sustainability benchmark needs to take into account the specific circumstances of the country. For example, the design of such a benchmark will be dependent on the social welfare criteria, which in turn is dependent on the country’s preferences and circumstances. The above analysis is implicitly based on the constant distribution criteria under which the social objective is to maintain the purchasing power of the oil wealth distributed every year, with the government spending a constant amount in real terms. This will imply a declining annuity over the years as a share of non-oil GDP as non-oil GDP grows. By 2013, for example, the above estimate of PSNOPD under the baseline assumptions falls to a range of 19-23 percent of non-oil GDP.

Second, the analysis treats all the government spending as consumption, although spending oil wealth on infrastructure and human capital could lead to higher non-oil GDP growth (and a higher sustainable non-oil primary deficit). Thus, evaluating fiscal sustainability without considering the potential positive effects on growth of government investment should be viewed as providing a conservative benchmark.

Finally, there is substantial uncertainty over the oil and gas wealth estimates due to unknown factors such as future oil and gas prices, reserves, production costs, extraction rates, and interest rates. Thus, it is important to update the sustainability benchmark regularly to incorporate new information, using conservative assumptions.
1

Real GDP growth in 2009 was 7 percent, compared with the projection of 2.9 percent made at the time of the last Article IV discussion.

2

Nigeria’s exchange rate regime is classified as “other managed”. Nigeria is an Article XIV member. As reported at the time of the last Article IV consultation, multiple prices are a technical characteristic of the central bank’s Dutch auction system and can give rise to a multiple currency practices (MCP). Staff does not recommend approval of this MCP. A comprehensive assessment by MCM and LEG is needed to identify the extent of remaining restrictions and multiple currency practices. The authorities have committed to participate in such an assessment.

3

The distinction between current and capital account balances should be interpreted with caution as errors and omissions exceed both. The Information Annex details the data quality issues, particularly large errors and omissions that complicate any assessment of Nigeria’s external position.

4

Based on ‘Medium-Term Expenditure Framework and Fiscal Strategy Paper for 2011-2013’, issued in September 2010 by Budget Office of the Ministry of Finance, Nigeria.

5

The MTEF does not propose or project a consolidated government fiscal position, but only the budget reference price for oil and the federal government budget. However, given the dependency on shared oil revenues by the state and local governments, and their limited ability to borrow, the budget reference price effectively contains state and local government spending and deficits. Using the authorities’ proposed spending at the federal level, and staff revenue projections, staff project the consolidated government fiscal position.

6

Based on projected oil production, the budget reference price of oil, and the WEO forecast of world oil prices as at January 2011. This projection also assumes that no withdrawals would be made from the ECA/SWF during the next three years.

7

The composition of spending at the state and local government level is not known, though staff makes rough estimates in compiling the consolidated expenditure accounts.

8

Staff estimates that, were the costs of bank recapitalization incorporated in the budget, they would raise the NOPD by some 0.9 percent of non-oil GDP in 2011, with the relative impact diminishing over time.

9

The surplus revenue is defined as the realized oil revenue less the benchmark (budgeted) oil revenue.

10

Based on the CBN’s September 2010 balance sheet.

11

Some of the loans are collateralized by government securities pledged by intermediary banks, mitigating the risk to the CBN.

12

MCM is providing extensive technical assistance, including through resident advisors, in both the bank resolution and banking supervision areas.

13

The MTEF for 2011-13 does not incorporate these investment requirements. For this reason, they have also been excluded from the DSA.

1

See “Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2010/11” p. 9, and “Medium Term Expenditure Framework and Fiscal Strategy Paper (Revised) 2010-2012” p. 29. The government’s inflation targets were set at 10.1 percent for 2010 and 8.5 percent for 2011. The broad money growth targets were set at 29 and 27 percent for the same two years, respectively.

2

See in particular the communiques of September 21 and November 21-22, 2010.

3

Quantification of capital movements is made difficult by large errors and omissions in the balance of payments. Foreign investors can enter and leave equity markets at will but must hold government securities for at least one year.

1

Prepared by Jaejoon Woo based on Woo J. (2010) “An Analysis of Long-Term Fiscal Sustainability in Nigeria” IMF, Unpublished Working Paper, October.

2

Barnett, S. and R. Ossowski, (2003) “Operational Aspects of Fiscal Policy in Oil-Producing Countries,” in Fiscal Policy Formulation and Implementation in Oil-Producing Countries ed. by J. Davis, R. Ossowski, and A. Fedelino (Washington: International Monetary Fund), pp. 45–81.

Same Series

Other IMF Content

Other Publishers

  • Collapse
  • Expand
Cover IMF Staff Country Reports
Nigeria: 2010: Article IV Consultation-Staff Report; Debt Sustainability Analysis; Informational Annex; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Nigeria
Author:
International Monetary Fund
Volume/Issue:
Volume 2011: Issue 057
Publisher:
International Monetary Fund
ISBN:
9781455219988
ISSN:
1934-7685
Pages:
73
DOI:
https://doi.org/10.5089/9781455219988.002
Figure 1.

Nigeria: Comparative Growth and Inflation Performance
Figure 2.

Nigeria: Fiscal Developments
Figure 3.

Nigeria: Monetary and Financial Developments
Figure 4.

Nigeria: BOP and Exchange Rate Developments
Figure 5.

Nigeria: Credit Bubble and Implications for the Real Economy

Excess Crude Account Balance

US$ billions (end of period)

Oil prices: budget vs. actual

(US$ per barrel)

Nigeria Exchange Rates: Interbank Rate and CBN Sell Rate

(Naira per US dollar)
Figure 1.

Long-Term Production Profile of Oil and Gas: Nigeria