Report No. 4506-UNI
Nigeria
Macro-Economic Policies for Sitructural Change
August 15, 1983
Western Africa Region
Programs I
FOR OFFICIAL USE ONLY
Document of the Wbrld Bank
This document has a restricted distribution and may be used by recipients
only in the performance of their official duties. Its contents may not otherwise
be disclosed without World Bank authorization.



CURRENCY EQUIVALENTS
Currency Unit          =             Naira (N)
Ni                     =             Kobo 100
1980: Ni               =             US$1.83
1981: Ni               =             US$1.63
1982: Nl               =             US$1.49
FISCAL YEAR
April 1 - March 31 (up to March 31, 1980)
April 1 - December 31, 1980 (interim)
January 1 - December 31 (from January 1, 1981)



FOR OFFICAL USE ONLY
Table of Contents
Page
SUMMARY                                                            i
PART I.
I.  The Policy Perspective                                 1
A.  Introduction                                       1
B.  Economic Policies 1973-81                          1
C.  Economic Crisis 1981-83                            3
PART II.
II.  Current Policy Problems                                5
A.  Management of the Balance of Payments              6
B.  Public Finance                                    11
C.  Monetary Policies                                 16
D.  Incentives for Agriculture                        18
E.  Incentive Structure for Industry                  22
F. Macro-Economic Modelling                           26
G. Conclusions and Recommendations for
Economic Policy 1983-85                           27
Statistical Appendix                                              30
This report summarizes the findings of the World Bank Economic
Mission which visited Nigeria in May/June 1982. The mission members were
Shahid A. Chaudhry (Chief of Mission), K. Tanju Yurukoglu, Mustapha Rouis,
Meena Acharya, Paul Cadario, Nader Majd, Lance Taylor (Consultant), Roger
Norton (Consultant), Jim Robertson (Consultant). A preliminary version of
this report was discussed with the Government of Nigeria in December 1982.
This document has a restricted distribution and may be used by recipients only in the pceformance
of their official duties. Its contents may not otherwise be disclosed without World Bank aulthorization.






Annex I
T A B L E  3A
Page 1 of 5
NIGERIA                  - SOCIAL INDICATORS DATA SHEET
NIGERIA                                 REFERENCE GROUPS (WEIGHTED AVERAGES) /a
MOST                        (MOST RECENT ESTIMATE) lb
RECENT              MIDDLE INCOME           MIDDLE INCOME
1960L-      1970/   ESTIMAT/-         AFRICA S. OF SAHARA    N. AFRICA & MID EAST
AREA (THOUSAND SQ. KM)
TOTAL                                 923.8        923.8        923.8
AGRICULTURAL                          412.8        497.4        512.9
GNP PER CAPITA (US$)                     200.0        330.0        870.0              1147.9                     1340.0
ENERGY CONSUMPrION PER CAPITA
(KILOGRAMS OF COAL EQUIVALENT)         29.0         51.0        169.0               724.2                      810.4
POPILATION AND VITAL STATISTICS
POPULATION,MID-YEAR (THOUSANDS)   51598.0        66182.0      87603.0
URBAN POPULATION (X OF TOTAL)          13.1         16.4         20.9                28.5                       47.4
POPULATION PROJECTIONS
POPULATION IN YEAR 2000 (MILI.)                               169.1
STATIONARY POPULATION (MILL)                                  623.4
YEAR STATIONARY POP. REACHED                                  2140
POPULATION DENSITY
PER SQ. KM.                          55.9         71.6         91.7                56.5                       36.0
PER SQ. KM. AGRI. LAND              125.0        133.0       165.2                131.8                     449.0
POPULATION AGE STRUCTURE (X)
0-14 YRS                            45.4         46.6        47.7                 45.9                       43.9
15-64 YRS                            52.3         51.0        49.9                 51.2                       52.8
65 AND ABOVE                          2.3          2.4         2.4                  2.8                        3.3
POPULATION GROWTH RATE (Z)
TOTAL                                 2.4          2.5          2.5                 2.8                        2.9
URBAN                                 4.7          4.7          4.8                 5.3                        4.6
CRUDE BIRTH RATE (PER THOUS)           52.0         50.7         49.6                47.6                       42.5
CRUDE DEATH RATE (PER THOUS)           25.3         20.8         16.6                15.2                       12.0
GROSS REPRODUCTION RATE                 3.4          3.4          3.4                 3.2                        3.0
FAMILY PLANNING
ACCEPTORS, ANNUAL (THOUS)              ..          7.6         33.2/c
USERS (X OF MARRIED WOMEN)             ..           ..
FOOD AMD NUTRITION
INDEX OF FOOD PROD. PER CAPITA
(1969-71-100)                         100.0        102.0        92.0                 95.7                       97.5
PER CAPITA SUPPLY OF
CALORIES (X OF REQUIREMENTS)         83.0         82.0         91.0                97.1                      102.3
PROTEINS (GRAMS PER DAY)             45.0         44.0        49.0                 56.0                      72.0
OF WHICH ANIMAL AND PULSE           10.0         10.0         11.0/d              17.2                       17.8
CHILD (AGES 1-4) DEATH RATE            42.4         35.0         27.8                23.6                       15.2
HEALTH
LIFE EXPECT. AT BIRTH (YEARS)          38.7         43.7         49.1                51.9                       57.2
INFANT MORT. RATE (PER THOUS)         183.4        158.0       133.0                117.6                      104.2
ACCESS TO SAFE WATER (%POP)
TOTAL                                  ..           ..           ..                25.4                       59.3
URBAN                                  ..           ..           ..                70.5                      84.9
RURAL                                  ..           ..           ..                12.3                       37.5
ACCESS TO EXCRETA DISPOSAL
(X OF POPULATION)
TOTAL                                  ..
URBAN                                  ..
RURAL                                  ..
POPULATION PER PHYSICIAN            73710.0     24670.0      12550.0              12181.6                    3536.0
POP. PER NURSING PERSON              4040.0/e    5070.0       3010.0               2292.0                     1820.7
POP. PER HOSPITAL BED
TOTAL                              3020.0/h    2220.0        1370.0/f            1075.4                      643.3
URBAN                               430.07;j    490.0        370.079              402.3                      545.0
RURAL                             2563O.0/e   18490.0        5490.07?            3926.7                    2462.0
ADMISSIONS PER HOSPITAL BED              ..           ..           ..                  ..                       26.4
HOUSING
AVERAGE SIZE OF HOUSEHOLD
TOTAL                                  ..
URBAN                                 4.7/;
RURAL                                  ..
AVERAGE NO. OF PERSONS/ROOM
TOTAL                                  ..
URBAN                                 3.0          2.2/g
RURAL                                  ..
ACCESS TO ELECT. (X OF DWELLINGS)
TOTAL                                  ..           ..           ..                  ..                       46.2
URBAN                                81.3         42.4/S         ..                  ..                       77.6
RURAL                                  ..           ..           ..                  ..                       16.1
…._____ _______----------------- --------------------------------------__ ------__ --------------- ------------  ______---___ -



Annex I
T A B LEL' 3A                                       Page 2 of 5
NIGERIA                   - SOCIAL INDICATORS DATA SHEET
NIGERIA                                   REFERENCE GROUPS (WEIGHTED AVERAGES) /a
MOST                         (MOST RECENT ESTIILATE) /b
/b           lb  RECENT                1IDDLE INCOME            MIDDLE INCOME
1960-        1970-  ESTIMIIAnTE-       AFRICA S. OF SAHAKA    N. AFRICA & HID EAST
EDUCATION
ADJUSTEDU ENROLLIENT ATIOUS
PKIF ARY:   TOTAL                     36.0          37.u         98.u                 97.2                        89.6
MALE                      46.0         47.0            . .               103.1                       104.8
F<Lw<                     27.0          27.0           ..                 88.5                        72.4
SECONDARY: TOTAL                       4.0           4.0         16.0                 17.2                        41.7
MLALE                      6.u           6.0           ..                 23.5                        52.8
rEtHALE                    1.0           3.0           ..                 14.2                       31.2
VOCAkTIONAL (% OF SECONDARY)              4.8          8.5          3.1/i                 5.2                       10.3
PUPIL-TEACHEE RATIO
PRIMARY                               30.0          34.0           ..                 42.9                        31.9
SECONDARY                             19.0          21.0           ..                 23.7                        23.3
ADULT LITERACY RATE (1) I5.4/e                          ..         34.0                  37.1                       43.3
CONSUHPTION
PASSENGEK CARS/THOUSAND POP               0.6          0.9          1.4/j               18.8                        18.0
RADIO RECEIVERS/THOUSAND POP              2.8         19.3         66.1                 97.8                       138.1
TV RECEIVERS/THOUSAND POP                 0.0          1.1           5.3                 18.6                       45.6
NEWSPAPER ("DAILY GENERAL
INTEREST") CIRCULATION
PER THOUSAND POPULATION                  5.5          4.8          6.9/f              1.2                         31.0
CI;!EMA AN.UJAL ArTTNOANCE/CAPITA          ..           ..          0.4                  u.6                         1.7
LABOR FORCE
TOTAL LABOR FORCE (7lOUS)           21786.0       25992.0      31635.0
FELALE (PERCENY)                      41.3          40.6         39.d                 36.1                        10.7
AGRICULTURE (PERCENT)                  71.0         62.0         54.0                 56.6                        42.5
IUIDUSURY (PERCENT)                   10.0          14.0         19.0                 17.5                        27.8
FxRTICIPATLON RATE (PERCENT)
rOfAL                                 42.2          39.3         36.1                 37.0                        25.6
SALE                                  50.3          47.3         44.0                 47.1                        45.4
FEMALE                                34.4          31.5         28.4                 27.0                         5.6
ECONOMIC DEPENDENCY RATIO                 1.1          1.2          1.4                   1.3                        1.8
INCOME DISTRIBUTION
PERCENT OF PRIVATE INCOME
RECEIVED BY
IGULiEST 5% OF BOUSE1OLDS                ..           ..
HlIGiEST 20% OF HOUSEHOLDS               ..           ..
LOWEST 20% OF HOUSEHOLDS                 ..           ..            ..
LOWEST 40O OF HOUSEHOLDS                 ..           ..
POVERTY TARGET GROUPS
ESTIMATED ABSOLUTE POVERTY INCOME
LEVEL (US$ PER CAPITA)
URBAN                                    ..           ..        696.0/k              534.2                       276.1
RURAL                                    ..           ..        341.0/k              255.9                       177.1
ESTIMATED RELATIVE POVEKTY INCOME
LEVEL (2S1 PER CAPITA)
URBAN                                   ..            ..        621.0/k              491.5                       400.0
KURAL                                    ..           ..        207.07W              188.1                       283.3
ESTIMATED POP. BELOW ABSOLUTE
POVERTY INCOME LEVEL (B)
URBAN                                   ..            ..            ..                  ..                        22.0
RURAL                                    ..           ..           ..                   ..                        30.8
.NOT AVAILABLE
NOT APPLICABLE
N 0 T E S
/a  The group averages for each indicaLor are population-weighted arithmetic means.  Coverage of countries among the
indicators depends on availability of data and is not uniform.
/b  Unless otherwise noted, "Data for 1960" refer to any year between 1959 and 1961; "Data for 1970" between 1969 and
1971; and data for "Lost Recent Estimate" between 1979 and 1981.
/c  1974; /d 1977; /e 1962; /f 1976; /g 1972; /h Including em-North Cameroon under British administration; /i Certain
fields of study previously classified under other second level education of vocational or technical nature are now
reported under general educacion; /1 1978; /k 1982.
May 1983



Annex I
Page 3 of 5
DEFINITIONS OF SOCITt ILLOIteTot
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-   a-o- arett   bLOd Orttocrre         Icr .ee .rabet       0r   Ie   ed
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prttee  cad ce,ttl-r tottlceerc.                                                                                                                                   ly Ilt



Annex I
Page 4 of 5
ECONOMIC INDICATORS
GROSS NATIONAL PRODUCT IN 1981                                        ANNUAL RATE OF GROWTH(%, Constant Prices)
US$ Mln.         S              1975-80                   1980                  1981
GNP at Market Prices               71,471        100.0               3.5                      0.5                 -5.1
Gross Domestic Investment          21,100         29.5               1.2                     15.7                  8.9
Gross National Saving              15,530         21.7              -0.6                      2.7                -39.8
Current Account Balance            -5,570         -7.8                -                        _                    _
Exports of Goods,NFS               17,872         25.0               3.6                    -2.2                 -36.8
Imports of Goods,NFS               22,439         31.4               6.0                      3.5                  7.8
OUTPUT, LABOR FORCE AND
PRODUCTIVITY IN 1981
Value Added                     Labor Force /1/               V.A. PER Worker
US$ Mln.         %                 Mln.          %                 US $          5
Agriculture                        16,515         23.3              18.8          59.7               878          39.1
Industry & Mining                  25,919         36.6               6.0          19.0              4,320        192.2
Services                           28,355         40.1               6.7          21.3              4,232        188.3
Total/Average                 70,789         100.0              31.5         100.0              2,247        100.0
GOVERNMENT FINANCE
General Government                                   Central Government
(N Mln.)       % of GDP                              (N Mln.)       % of GDP
1981 /2/  1980 /2/   1979/80 /2/                     1981 /2/  1980 /2/   1979/80
Current Receipts                   12,224      37.3         30.6                         7,850      27.2          22.0
Current Expenditure                 9,097      17.0          15.9                        4,438       9.7           9.6
Current Surplus                     3,127     20.3           14.7                        3,412      17.5          12.4
Capital Expenditure                10,242      22.2          17.5                        8,030      16.5          15.1
External Assistance(net)              ..         ..            ..                         500        0.4           0.2
MONEY, CREDIT AND PRICES                          1975       1976      1977       1978       1979      1980       1981 /2/
(Million N Outstanding End Period)
Money and Quasi Money                            4,167     5,732      7,439      7,873     9,845    14,275    15,640
Bank Credit to Public Sector(net)                 -642        551     2,309      3,779     3,296      3,577      6,897
Bank Credit to Private Sector                    1,798     2,423      3,465      4,605     5,249      6,970      9,098
(Percentages or Index Numbers)
Money & Quasi Money as S of GDP                   19.2      20.7       22.9       23.1       24.3      32.5       35.4
General Price Index(1960=100)/6/                 289.6     352.4      423.1      492.5     550.0      604.0      731.0
Annual Percentage Changes in:
General Price Index                               33.5       21.7      20.1       16.4       11.7       9.8       21.0
Bank Credit to Public Sector                        ..         ..     319.1       63.7     -12.8        8.5       92.8
Bank Credit to Private Sector                     58.4       34.8      43.0       32.9       14.0      32.8       30.5
-------------------------------------------------------------------__--------__---
Note:  All conversions to dollars in this table are at the average exchange rate prevailing during period
covered.
/1/ The data is derived from Planning documents and refers to the number of 'gainfully employed'.
/2/ Estimates.
.. Not Available.
May 1, 1983



Annex I
Page 5 of 5
TRADE PAYMENTS AIJD CAPITAL FLOWS
BALANCE OF PAYMENTS                                                                 MERF.CHANDISE EXPORTS (AVERAGE 1979-1981) /4/
1980 /1/  1981 /2/  1982 /3/                                      US$ Mln.        . %
(Millions US $)CrdOi1821                                                    9T
Exports of Gcods,NFS                     24,758      17,872      13,400             Crude Oil                  18,271        95.7
,rnports of Goods,NFS                    20,723     22,438       18,973             Cocoa Products                 476        2.5
------  ------  ------   ~      Palm   Product3                 19        0.1
l'Dsource Gap(Def;cit   -)                4,035      -4,566     -5,573              Tin                             18        0.1
Other Commodities             298         1.6
interest Payments (net)                     370        - 702       -649                                        ---           --
(itner Factor Payrnents (net)              -876      -1,124        -746                         Total          19,082       100.0
l,et Transfers                             -576        -582        -373
------ransfers______  --582-    -- -       EXTERNAL DEBT, DECEMBER 31, 1982 /5/
Balance oni Current Account               2,953      -5,570     -7,341              ------------------------------------
D;rect Foreign Investment                   340          29         358                                                   US$ Mln.
:J-t Official MLT Borrowing                 997         784         732             Public Debt, incl. Undisbursed    14,697
Disbursement                            1,138       1,367       1,209             Non-Guaranteed Private Debt
Asortin!ation                            -141        -583       -477                                                     ---
otrer MILT  (net)                             81        -39          26             Total Outstanding & Disbursed           6,085
O-her Capital (niet)                         478        -38       4,490 /7/
Errors and Omissions                       -162       -1506        -513             DEBT SERVICE RATIO For 1982 /6/
Cnange in Reserves                                                                  ------------------------------
Increase (t)                            4,687     -6,340      -2,248                                                         %
Net Reserves (end year)                  10,235       3,895       1,647             Public Debt, incl. Guaranteed             9.7
Non-Guaranteed Private Debt
Fuel and Related Materials
Imports                                                                           Total Outstanding & Disbursed
of which: Petroleum                     402         480        450
Exports
of which: Petroleum                 22,408      16,748      12,751              IBRD/IDA LENDING 'MAY 31,1983 ) (Millions $)
RATE OF EXCHANGE                                                                                                            IBRD         IDA xa
1977: N1.00 =US$1.55
1078:  11 .00 =US$1 .57                                                             Outstanding & Disbursed                 738.7       36.7
'579: NlOO  =US$1.66                                                                Undisbursed                             999.1         -
1910: NV.00 =US$1.83                                                                                                     ----            --
155C   NiOG1. - US$1 .63                                                            Outstanding incl. Undisbursed    1,737.8            36.7
1982: I1.OO = US$1.49
,''/ Provioional. /2/ Official estimates. /3/ Staff etimates.
OfficIal estimates for 1980 and 1981.
' Exc .i:ng short-torm loans.
W  Ratio of' MLT debt service to exports of goods and non-factor services.
/ Inicludes commercial borrowing and trade arrears.
.'c,' AS of April 1983.
..  Not Available.



I



SUMMARY
i.     Nigeria's domestic and external financial situation deteriorated
rapidly as the world oil markets softened in the second half of 1981. Within
a year, the balance of payments and public finances (both federal and state)
were heavily strained. As the resource constraints tightened4, structural
imbalances and the vulnerability of the economy became more apparent.
ii.     As in the past, the Government responded to these developments with
measures aimed at arresting further deterioration of the financial
situation. These measures, initially applied in April 1982, and reinforced in
January 1983 have helped arrest the crisis, but scarcely go beyond "stop-gap"
expedients directed toward short-term stabilization. However, the issues
facing the economy are fundamentally structural and will not be resolved by a
rebound in oil revenues. In a period when difficult steps must in any event
be taken, there is a vital opportunity to redirect economic policy towards
medium-to long-term structural adjustment to lessen dependence on oil and
generate a wider resource base. The short-term uncertainties in the world oil
market add urgency to the need for structural change.
iii.     The crucial issue facing Nigeria today is the stimulation of the
comnodity producing sectors which have been put at a distinct disadvantage
vis--a-vis the non- traded sectors as a result of the oil syndrome. Until
recently, trade (including exchange rate) policies were mainly used to dampen
inflationary pressures and hampered the development of agriculture and
industry by encouraging the diversion of resources (both labor and capital)
from these sectors to non-traded goods and services (trade, services,
conistruction etc.) In addition, sudden shifts in trade policy in response to
foreign exchange crises have had adverse affects on production and investment
decisions throughout the economy.
iv.     Given the structure of the economy and level of wages, both
agriculture and industry have been, and are likely to continue to be, "high
cost" production activities by international standards. In agriculture,
prices at first appear too high compared with international prices when
converted at the official exchange rate, but at the same time may be too low
vis-a-vis non-traded goods, particularly for export crops. In industry, the
existing incentives provide a wide range of net effective rates of protection
to different activities which often conflict both with the government's
objectives of sectoral and spatial diversification and with the longer-run
objective of building an efficient and dynamic sector to serve as a future
engine of growth.
v.     The policy measures announced in the "April 1982 Package" and the
1983 Budget are quite reasonable but still fall short of addressing these
issues. While most of the measures were needed to restore financial stability,
more vigorous and consistent policies would be needed to bring about
structural change. The chief requirements comprise: (i) Development of
efficient export and import substitution sectors--particularly agriculture and
industry-- through an appropriate incentive structure including appropriate
exchange rate and tariff policies; (ii) Complementary steps to strengthen the
balance of payments through judicious management of foreign borrowing and
external reserves; (iii) Continued control of aggregate demand through public



- ii -
expenditure policies while restructuring the composition of public investment
and increasing the domestic resource base of public revenues; and (iv) A more
flexible use of monetary and interest rate policies to stimulate the
productive sectors.
vi.    The macro-economic policy recommendations of the report, are, as
follows:
(i) Trade (including Exchange Rate) Policies. Provide additional
incentives to the domestic productive sectors (agriculture and
industry) in 1983. This would preferably be done through a
devaluation. Tariffs and export subsidies could also
supplement the exchange rate adjustment initially. Crawling
peg thereafter to maintain real e!xchange rate intact.
(ii) Fiscal Policies. Introduction of sales tax of at least one
percent to benefit states. To be tried at the wholesale level
in the case of manufacturing and introduced selectively in its
initial stages. Increase in domestic oil prices to bring them
over time to international parity levels. Introduction of
state property taxes.
(iii) Monetary Policies. Unification of and gradual increase in
interest rates to achieve positive real interest rates.
Private sector share of credit to be increased by reduction of
public deficit and attention to meeting credit needs of the
private sector.
(iv) Expenditure Policies. Thorough review of expenditure programs
(currently being undertaken in a preliminary manner with
assistance by the Bank). More emphasis on productive
investments, particularly in agriculture. Projects need to be
justified on efficiency grounds in order to avoid
misallocation of resources. Eliminate the fertilizer subsidies
gradually over time, relieving this heavy fiscal burden which
has constrained agricultural and other programs.
vii.    The sector specific institutional policy recommendations of the
report are:
(i) Balance of Payments. Creation of a "Stabilization Fund" to
operate in conjunction with appropriate long term borrowing
policies. Large inflows of externial capital are required for
the foreseeable future - for the years 1983-86, about
$11 billion of disbursement from MLT capital will be needed.
The mobilization of these resources without the payment of
excessive "front-end" fees will require strengthening of
external finance coordination, debt monitoring and servicing
units in the Ministry of Finance. An immediate priority is
the regularization of the remaining trade arrears, for which
the Ministry of Finance is utilizing the services of
international finance houses. For the future the government
must develop a longer term external borrowjing strategy.



- iii -
(ii) Fiscal Policy. Bringing down Federal Government's budget
deficits to manageable levels from about 10 percent of GDP in
1982. Increasing domestic resource mobilization through
strengthening administrative tax-collection mechanisms.
Emphasis on cost recovery in Government programs. In the
field of expenditure policy, making the best of a difficult
situation by development and application of criteria to screen
ongoing and proposed future public investment programs.
(iii)  Monetary Policy.  Simplification of credit allocation
procedures by amalgamation of several categories of "non-
preferred" sectors into one category.
(iv) Agriculture. Phase out quantitative restrictions on imports,
substituting the exchange rate adjustment plus tariff for
these direct, often highly varying restrictions. Additionally
strengthen domestic agricultural capabilities by improving the
deliveries systems for agricultural inputs and accelerating
rural development programs.
(v) Industry. Sharply reduce, and preferably phase out,
quantitative restrictions on imports. Review of industry
incentive structures to narrow band of incentives and remove
discrimination against producers using domestic inputs. Step
up efforts to address the infrastructure and manpower
constraints affecting the sector. Take steps to simplify and
rationalize the regulatory framework and to strengthen the
government's policy analysis and data gathering capabilities
for the sector.
viii.    The above recommendations draw heavily on the large volume of
econiomic and sector work undertaken by the Bank in Nigeria.  The mission which
prepared this report also benefited greatly from work done by Nigerian
anaLysts, in government and in universities, and from the Bank's own
experience through its lending operations. The policy recommendations --
which were developed to be detailed and specific -- were also examined through
a macro-economic policy model for Nigeria.



I



PART I. THE POLICY PERSPECTIVE
A. Introduction
1.1      Nigeria, with a population of nearly 90 million is the most populous
country in Africa.  Although demographic data for Nigeria are scant, most
recent estimates put Nigeria's crude birth rate at 52 per thousand population
and crude death rate at 17-18 per thousand, resulting in a natural increase of
3.4 to 3.5 percent per annum. This would result in a doubling of the
population in about twenty years in the absence of an incipient decline in
high fertility. These growth rates raise serious questions in such areas as
food self-sufficiency, employment, financing of education and other public
services, and maintaining savings rates.
1.2      The present economic structure of Nigeria is heavily based on oil
which is an exhausting resource. The estimate of provea recoverable resources
of crude oil was 13-14 billion barrels at the end of 1981 - additional
undiscovered reserves are estimated at 10-11 billion barrels. Although
present maximum technical extraction capacity is about 2.4 million barrels a
day, recent projections call for an output range of 1.3-1.8 mbd during the
eighties. With these rates, natural production declines would not set in
untiL the late 1990's. However, domestic consumption of oil products has
risen rapidly during the past decade and was around 280,000 bbl a day of crude
equivalent in 1982. It is projected to rise to 650,000 bbl a day by 1995.
Assuming an output level of 1.8 mbd for the rest of the century then, even
with the Bank's current projections of rising oil prices, real export earnings
from oil would begin to decline within a decade. Other scenarios are
possible, but two conclusions appear quite robust from sensitivity analysis.
First, real oil earnings are unlikely to regain their 1980-81 levels. Second,
even taking today's much lower earnings as a base, oil will cease to make a
major contribution to increases in import (financing) capacity in less than
ten years. The task of diversifying the economy in general, and of increasing
exports and import substitution in particular, is therefore urgent. Issues
within the energy sector per se are discussed in the Energy Assessment
Report (No. 4440-UNI, 1983).
1.3      Both the population and oil sector constitute important aspects of
the resource picture of the Nigerian economy and raise significant issues
regarding the long-term economic growth of the country. While these issues
are very relevant and are being addressed through the other economic and
sectoDr work done in the Bank, this report focuses on the short-and medium-term
issues of structural adjustment of the economy. The dimensions of these
sectors on the resource picture, however, have been taken into account in the
analysis underlying this report.
B. Economic Policies 1973-81
1.4      The broad elements of policies pursued by Nigerian decision-makers
are fairly clear, The principle objective was to absorb the large oil
revenues accruing during the period--N65 billion in current prices between
1973 to 1981-- and to translate them into investments in social, physical and
economic infrastructure. Whilst there were some investments in "non-economic"
projects as well as elements of waste, an important fact to be recognized is



- 2 -
that expenditures on investments exceeded the amount of oil revenues
received. Investment expenditures are estimated at about N70 billion in
current prices over the period 1973-81. On the other hand, the large volume
of external resources made available from oil exports diverted Nigerian
policy-makers from adopting other economic policies necessary to reduce the
country's dependence on oil and strengthen the domestic productive sectors.
1.5      Fiscal policy in Nigeria has been the Government's major instrument
for distributing oil revenues. Total Government expenditures currently amount
to about 35 percent of gross domestic expenditures. Major expenditures were
incurred on creation of new states, expanded expenditures on the social
sectors and the massive investment programs referred to earlier. On the
revenue side, there has been little incentive to increase domestic resource
mobilizaton because of the oil revenues. Nigeriia's performance with domestic
resource mobilization compares unfavourably to some extent with other similar
oil producing countries. And an inadequate domestic revenue mobilization base
for the Federal and State Governments has left them increasingly vulnerable to
fluctuations in oil revenues.
1.6      Exchange rate policy was until the middle of 1981 used mainly to
dampen inflationary pressures in the economy. Thus, the Naira appreciated by
about 80 percent in the period 1973-1980 in effective terms on the basis of
purchasing power parities (taking into account Nigerian domestic rates of
inflation and inflation in Nigeria's major trade partner countries). Tariffs
were generally low, amounting to between 5-10 percent for intermediate and
capital goods and about 50 percent for non-food consumer goods. In 1981,
weighted average tariffs were estimated at about 13.5 percent, in part due to
the fact that public sector imports (including food, machinery and equipment)
were exempted from tariffs. The exchange rate and tariff policies pursued
placed serious pressures on the domestic production sectors. Agriculture and
private sector industry were particularly affected by this aspect of the "oil
syndrome". Agricultural exports, which were in excess of $1.5 billion in
1973, dropped to less than $0.3 billion in 1981 and there is evidence that
this was not entirely due to redirection of agricultural output towards the
domestic market. Traditional private sector industries, particularly textiles
and activities depending upon domestic inputs, were rendered largely
unprofitable, while certain favoured industries, largely based on imported
inputs, appeared to receive excessive protection. The focus of economic
activity in the country shifted sharply to international trade, international
and domestic finance, services and construction and real estate.
1.7      Monetary policy has accordingly been resorted to as a major
instrument of public policy to deal with some of the adverse effects of the
oil syndrome. A system of credit allocation with "preferred" and
"nonpreferred" sectors and a range of interest rates (with lower rates for
"preferred" sectors) has been adopted in order to channel funds to the
domestic productive sectors (agriculture and industry). It appears that
credit allocation policies were only partially effective, while interest rate
policies were much less so. There is evidence to suggest that the low spreads
available to financial institutions for lending to the so called "preferred"'
sectors with their requirement of lower interest rates actually discouraged
lending to these sectors and that funds borrowed at low rates were often



- 3 -
diverted to lower priority sectorsl/. However, given the failure of exchange
rate and tariff policy in stimulating investment and production in agriculture
and private sector industry, it is probably true that the Central Bank's
monetary policies were useful in prompting structural change in the economy
(to the extent this has taken place) by supporting the private productive
sectors.
1.8      External borrowing and external debt policies were generally
conservative except for heavy borrowing by some of the states during 1981. The
difficulties encountered in syndicating a second $1 billion "jumbo loan" in
1978 which had to be scaled down to $750 million, made the authorities
extremely careful regarding foreign borrowing for balance of payments support
purposes. No large euro-dollar loans were sought in this period.
Nigeria's foreign debt outstanding and disbursed amounted to $4.7 billion at
end 1981 ($11.8 billion including undisbursed) and debt service during the
period never exceeded 7 percent of export proceeds.
C.  The Economic Crisis July 1981 - 1983
1.9      The immediate cause of the current economic crisis has been the
softening of the international oil market in the second half of 1981 which has
continued to date and the resulting dramatic drop in the value of Nigerian oil
exports from $22.4 billion in 1980 to $16.7 billion in 1981, $12.8 billion in
1982, with prospects of only about $10 billion in 1983. This inevitably has
had serious implications for the balance of payments, the public finances
(both federal and state), and the economy in general.
1.10     Developments in 1981.   The Nigerian Government exhibited marked
reluctance to come to grips with the situation during 1981 and continued to
hope (along with most observers of the oil market) that the oil market would
recover quickly and the crisis would pass away. As a result, there was an
indirect but massive speculation against the Naira. During 1981 imports
increased by 8 percent to a record level of about $22.4 billion. Foreign
direct investment dropped from $340 million to $29 million. Official private
outflows of capital reached $580 million. Unoffical outflows were probably
reflected in the "over-invoicing" of imports which at a perhaps conservative
10 percent would amount to another $2.2 billion. The foreign reserve loss in
1981 was $6.3 billion which left Nigeria with foreign exchange reserves of
only $3.9 billion (or about two months imports) at the beginning of 1982.
1.11     Public finances suffered simultaneously.  The Federal Government,
which obtains about 85 percent of its income from oil revenues, managed to
keep its expenditure patterns intact by deficit fi4nancing - borrowing from the
Central Bank an unprecendented N4.1 billion (net) in 1981. The State
Governments, with their even greater dependence on oil revenues (more than 90
percent in most states) and with their limited access to domestic credit,
faced even greater difficulties. The estimated 20 percent drop in actual
resources compared with budget projections for 1981 left the states with
1/ "Financial Intermediation in Nigeria", The World Bank, Report No. 4051-UNI
(Grey Cover), February 15, 1983.



- 4 -
unpaid bills, and brought most of their ongoing development schemes virtually
to a standstill.
1.12     Since the Federal Government did not immediately adjust its level of
expenditures to the decline in oil revenues, government savings dropped from
N7.6 billion in 1980 to N3.4 billion in 1981, The economy experienced a
resource gap (corresponding to an inflow of foreiLgn resources financed through
running down of reserves) of about N3 billion (6 percent of GDP) compared to a
resource surplus of N2.6 billion for the previous year.
1.13     The Policy Package of April 1982.  In April 1982, the government
announced a policy package in an effort to redress the deteriorating balance
of payments position of Nigeria. This package had the following main
elements: (a) Customs crackdown (closure of pr-Lvate jetties and tightening
of the customs administration); (b) Increase in tariffs and their extension
to government imports (hitherto exempt); (c) Further import restrictions
through advance deposits for imports; (d) Increase in interest rates of
2 percent across the board; (e) A planned 40 percent cutback of public
investment expenditure in 1982; (f) Increase in gasoline prices; (g)
Restrictions on external capital transfers.
1.14     The policy package represented a significant effort by the Government
to regain control of its external and internal financial circumstances. It now
appears, however, that the policy package and the 29 percent depreciation of
the Naira against the dollar (but not against other major currencies) did not
succeed in its objective of reducing imports by about 20 percent in the last
nine months of 1982. The reasons behind the apparent lack of success of the
April 1982 measures included the large volume of imports under the 'open
general license' against short term credit facilities and elements of 'over-
invoicing' of imports as a means of capital flight. As a result, despite a
$737 million withdrawal from Nigeria's 'free' ba:Lances with the IMF the
Government was unable to meet its balance of payments objectives. Large
arrears in payments of short-term trade credits developed (estimated at
$3-$4 billion at end December 1982), and reserves were run down by an
additional $2.25 billion to $1.65 billion - the lowest level since 1973.
Total MLT debt outstanding and disbursed (excluding the trade arears mentioned
earlier) amounted to $6.1 billion at the end of 1982.
1.15     The April 1982 policy measures had the Eollowing additional effects:
(a) The increases in tariffs--and particularly their application to
government imports--strengthened somewhat the disadvantaged position of the
productive, import substitution sectors of the economy. Nominal average
weighted tariffs increased to about 18.5 percent from the current level of
about 13.5 percent. However, in the absence of effective downward exchange
rate adjustments, these levels are inadequate to achieve structural change
objectives.
(b) The restrictive monetary policy, with its potential for
sterilizing about 20 percent of the total money supply through advance
deposits for imports, had substantial, anticipated deflationary effects. The
operation of the credit ceilings together with the sterilized deposits



- 5 -
affected the activities of the private sector. Credit allocations which were
squeezed most were those for working capital and investment, with consequent
adverse effects on the economy.
(c) On the fiscal side, the 40 percent cut in Federal capital
expenditures imposed in April 1982 resulted in an actual drop in capital
expenditures during 1982 of about 18 percent (compared to actual expenditures
in 1981). The April measures stopped all new Federal Government projects,
although these comprise only about 10 percent of planned investment
expenditures. The remaining cuts came from staggering expenditures on ongoing
projects. To some extent this had already been anticipated, as 30 percent of
investment expenditures in the 1982 Federal Budget were programmed as a
'special reserve' to be used only when authorized. However, the momentum of
Nigeria's investment program is such that these cutbacks will lead to
substantial delays in project execution as well as increasing their cost.
Furthermore, the absence of a monitoring system for even the large investments
has deprived the government of the possibility of making rational choices
among different ongoing investments.
(d) State finances deteriorated further both as a result of the
reduced oil revenues as well as the new restictions on external borrowing
imposed by the April measures. (States with external debt of more than N200
million, including undisbursed, are barred from further external borowing).
The E'ederal Government has arranged to ease the financial strains on the
states by raising Federal loans and onlending them to the states for
investment. However, with no Federal control over state expenditures, the
states did not, in many cases, use these additional resources to rescue their
ongoing development programs but instead applied them to maintain their
previous levels of current exenditures. '
1.16     The April Package was designed to achieve economic stabilization
through contraction in economic activity. The combined effects of the
substantial cutbacks in Government expenditures together with the other
policies discussed above resulted, according to mission estimates, in a 3-4
percent fall in non-oil economic activity, or a 5-6 percent fall in overall
GDP.
1.17     Developments in 1983.  In its 1983 Budget proposal, the Federal
Government adopted a conservative revenue outlook, based on an oil production
level of one million barrels a day and substantial additional cutbacks in
planned investment expenditures. Some projects with large foreign exchange
requirements such as the standard-gauge railroad project were deferred
indefinitely. In January 1983, the Government introduced further import
restrictions in the form of licence requirements and higher tariffs aimed at
reducing the level of imports from currently US$1.3 billion to less than
US$900 million a month.
PART II - CURRENT POLICY PROBLEMS
2.1      Nigeria's oil surpluses available for export are expected to be
substantially reduced by the end of the decade. There is, therefore,
considerable urgency associated with the task of bringing about structural



- 6 -
changes in the economy through the development of the productive sectors and
developing niew sources of export earnings and public revenue. While most
economic decision-makers are aware of these facts, it has generally been
considered politically difficult to face up to the policy issues associated
with the situation. When the vulnerability of the economy due to its
overwhelming dependence on oil was demonstated once again by the current
economic crisis, the political authorities responded firmly to the short-term
requirements of the situation. In addition, the mission was assured that the
positive aspects of the 'April Policy Package' should be seen as the first of
a series of long-term measures aimed at strengthening the economy. It is in
this context that issues of structural change and the appropriateness of
certain macro-economic policy instruments were examined by the mission's
sectoral specialists and then tested for consistency through a macro-economic
policy model. It was recognized that a wide spectrum of policies applied in
each sector would have to be worked out in detail, and that such detailed
sector policies need to be established within the broad framework of
consistent macro-economic policies. Sectors in which policy issues were
examined were: (i) balance of payments, (ii) public finance, (iii) monetary
policies, (iv) agriculture and (v) industry.
A. POLICY ISSUES IN THE MANAGEMENT OF THE BALANCE OF PAYMENTS
2.2      Nigeria's balance of payments has become the major source of
instability for the economy because of the overwhelming dependence on
fluctuating oil exports. The first major fluctuations occurred in 1977/78
when oil exports declined from 2.0 mbd to 1.6 mbd for about six months due to
softness in the international oil market and Nigeria's reluctance to agree to
downward adjustments in the price for its crude. The sudden decline in oil
revenues brought the country to the brink of a financial crisis.  The
Government responded with sharp budgetary cuts and stricter import controls.
These developments had substantial adverse effects on the economy and the
execution of development programs. A similar situation is again being
experienced.
Table 1: Oil Export Revenues and GDP Growth
Surplus/Deficit   Foreign       GDP      Non-Oil
on BOP        Exchange    Growth  GDP Growth
Oil Exports     %    Current Account   Reserves       Rate       Rate
($ Million)  Change    ($ Million)    ($ Million)    (%)         (%)
1976               9,445                      -412           5180      10.4        8.2
1977              11,564        +22%        -1,005           4232       6.6        8.2
1978               9,455        -18%       -3,758            1887      -5.6       -4.6
1979              15,657        +66%         1,675           5548       5.9        3.1
1980              22,408        +43%         2,953          10235       0.5        3.0
1981              16,748        -25%        -5,570           3895      -5.2        1.9
1982 (estimated)  12,751        -24%        -7,341           1647      -5.3       -3.1
1983 (projected)  10,020        -21%        -3,238           1600      -6.7       -6.4



2.3      As a first order of priority, Nigeria needs to even out the adverse
effects of potential future fluctuations in oil export revenues through an
effec:tive policy of managing external reserves that would include a
combination of oil export policies and an external borrowing strategy. The
creation of a "Stabilization Fund" (with Federal,State and Local Government
shares) appears to be called for in the medium term. In implementing this,
the political problems associated with imposing a restraint in rapidly
spending oil revenues have to be recognized. Nigerian legal experts would be
needed to see how a "Stabilization Fund" could be handled within the framework
of the Nigerian Constitution, which prescribes the manner in which almost all
revenues (including petroleum revenues) are allocated and whether an amendment
to the Revenue Allocation Act (1981) would be sufficient to establish such a
Fund. However, in the absence of a "Stabilization Fund" or other "safety
nets", adequate reserve management policies will be extremely difficult, with
an adverse effect on efforts towards stable economic growth.
2.4      It also appears probable that Nigeria will have to borrow substantial
amounts over the next decade from international capital markets to finance in
part some of the investments needed to bring about structural change in the
economy. This will require a longer term borrowing strategy. While the
overall medium-and long-term debt picture appears reasonable ($6.1 billion
outstanding and disbursed, $14.7 billion including undisbursed at end 1982),
Nigeria's credit standing has been affected by (i) the slump in oil revenues,
(ii) arrears in payments of non-guaranteed short-term trade debt estimated at
$3-4 billion at end December 1982, (iii) over-extension by the states whose
share of the total debt including undisbursed is estimated at N3.5 billion
($5.3 billion), and (iv) administrative problems in monitoring, controlling
and servicing even the existing level of debt. As a result, Nigeria's overall
borrowing posture and some specific plans have been adversely affected. While
most of the factors above are likely to be overcome (and in the case of state
borrowing have been dealt with by the ceilings imposed by the 'April
Measures'), Nigeria appears to need to develop greater sophistication in its
approach to international capital markets. An important beginning has been
made with rescheduling of arrears on letters of credit confirmed by major
overseas banks of about $1.6 billion accumulated prior to March 1983. The
remaining documented arrears (estimated at $3.3 billion as of end June 1983)
are largely private non-letter of credit arrears incurred under "open-account
inter-company import financing. These will also have to be rescheduled, but
the arrangements to do this are likely to be more complex and time-consuming.
2.5      The creation of institutional structures must, however, remain
secondary to the need to strengthen the country's balance of payments through
the development of additional export sectors and efficient import
substitution. In the short-term, demand management and corrective expenditure
policies are likely to ease the foreign exchange crisis, but the price paid
for the slow-down in economic growth and change in economic signals is bound
to be substantial. The need to develop a coherent long-term strategy to
manage the balance of payments has thus become acute. Even under the most
optimistic assumptions Nigeria's oil surplus for export would be exhausted in
substantial part by the year 2000. Declines in oil revenues will become
significant by the mid-1990's. Given the country's overwhelming dependence on
oil (currently over 95 percent of exports), the decline of traditional
exports, mainly agricultural, from over $1.5 billion in 1973 to less than
$300 million in 1981, and the almost complete absence of manufactured exports,



- 8 -
the task facing Nigeria is immense.  The decline projected in oil available
for export by the end of the decade of the eighties combined with Nigeria's
increased import needs will require non-oil exports of about $8 billion
(current prices) in 1990 to finance import needs of moderate growth of about
4 percent during the period. This task, in order to be successful, must of
necessity comprise the following elements: (a) careful management of oil and
natural gas resources, including conservation in domestic oil consumption and
the economic use of flared natural gas; (b) construction of liquified natural
gas plants, based initially on flared gas; (c) an industrial export structure
based on appropriate non-tradional manufactured and processed exports; in this
context, while industries using cheap natural gas (fertilizers, petro-
chemicals, etc.) as feedstock would have a long-run comparative advantage,
Nigeria's exceptionally high capital costs tend to reduce this
competitiveness; (d) gradual revitalization of traditional agricultural
exports; and (e) efficient import substitution both in the industrial and
agricultural sectors.
2.6      The creation of efficient export and import substitution sectors
requires effective exchange rate policies. The appropriate level of the
exchange rate in an oil economy is subject to considerable debate. There
appear to be, however, at least three relevant factors which should be taken
into account, i.e. (i) over-valuation in the sense of purchasing power
parities; (ii) shifts in the relative price structure within the economy and
(iii) deterioration in the balance of payments. Each of these factors was
examined by the mission.
2.7      From the purchasing power parity point of view, the real effective
exchange rate in which the relative rates of inflation in Nigeria and its
principal trading partners are taken into account appreciated by 87 percent in
the period 1973-81, reflecting the higher rate of inflation in Nigeria than in
the economies of its trading partners.  During the period 1976-81 the
appreciation was 30 percent - an 8 percent appreciation in 1976-77, a
depreciation of 5 percent in 1978 and a 26 percent appreciation between
January 1979 and December 1981.
2.8      A shift in relative prices unfavorable ito the manufacturing sector
was also observed during this period (Table 2 below). For agriculture the
data shows substantial relative price improvements for foodstuffs and relative
declines for traditional agricultural export crops compared to all other
sectors of the economy.



- 9 -
Table 2: Movement of Relative Prices
1973      1975      1977       1979      1981
Agriculture                   100.0     175.9    228.8       282.2      332.8
(Foodl Crops)               (100.0)   (180.8)  (215.7)   (283.0)   (373.3)
(Export Crops)l/            (100.0)    (94.7)  (235.3)   (216.0)   (157.2)
ManuEacturing                 100.0      196.8    199.6      213.0      210.8
Trade and Commerce            100.0      162.1    214.1      270.2      323.3
Government-Services           100.0      114.4    133.7      256.0      291.6
Exchange Rate 2/              100.0      134.6    156.5      161.9      187.0
1/   Export prices. Domestic prices higher in individual years through support
programs.
2/   Adjusted for purchasing power parity.
2.9      The appreciation of the exchange rate and the shifts in relative
prices have important consequences for the domestic economy. From the point
of view of the international terms of trade, if imports in general do not
compete with domestic output but rather complement it, the output of both
commodity producing and service sectors would be insensitive to foreign
competition. While this may have been partially true for Nigeria in the early
seventies, it now appears that as Nigeria's potential for domestic production
has broadened, additional imports have increasingly displaced potential
domestic production of competing goods. The changes in the domestic terms of
trade have also, in general, favoured the non-productive sectors -- with the
important exception of foodstuffs.
2.10     From the point of view of the balance of payments the appreciation of
the Naira was probably to be expected through the nineteen-seventies as large
foreign exchange surpluses were accumulated in some years. However, the
recenat softening in the international oil market and Nigeria's prospects of
being a substantial importer of foreign capital in the medium term have
changed this position.
2.11     Overall, therefore, there appears to be an increasingly strong case
for correcting relative prices preferably by exchange rate adjustment. Since
the prime objective in the Nigerian case is to strengthen the productive
sectors, the requirements of these sectors need to be given heavy weight in
determining the correction. To some extent this correction can be achieved
through the tariff structure. However, as indicated below, this correction
would not be effective or efficient in the absence of an exchange rate
adjustment.
2.12     While nominal tariffs have been attempted to be set at levels which
would provide adequate incentives to the productive sectors and also encourage
a certain degree of efficient production, in actual fact they have not
achieved the desired goals. Prior to the April 1982 measures this was
partially due to the fact that public sector imports (including food) were
exemit from application of tariffs with the result that actual average tariffs
were substantally lower than the nominal rates (Table 3 below). This aspect
of the situation has now been corrected to some extent by the April Measures



- 10 -
which have extended the tariff net to all imports and have also tightened
customs procedures. However, there still remains the question whether the new
levels of tariffs are adequate to provide incentives to the production sectors
at existing exchange rates.
Table 3: Tariffs (%)
Average                              Average
Nominal Tariff        Average         Nominal Tariff
Rates Pre 1982   Realized Tariffs   Rates Post April
April Measures   1980          1981     1982 Measures
Food                         25-30           4            9          30-35
Other Consumer Goods        30-150           5           14         33-200
(Elect. Goods)              (50)                                    (50)
(Clothing)                 (100)                                   (100)
Intermediate Goods              21          15           18             22
Capital Goods                               (6)         (15)
(Mach. and equip.)             5                                       5
(Transp. Equipment)         (123)                                   (150)
2.13     Substantial variations of tariff levels between individual
commodities and the application of quotas, quantitative restrictions and other
policies have resulted in a distorted structure of protection which is not
apparent from a superficial examinations of the nominal tariff structure.
Studies of the effective rates of protection indicate that effective
protection for industrial commodities ranges from negative protection levels
for export industries to positive protection in excess of 200 percent for
assembly industries. A similar situation appears to prevail in the
agricultural sector where traditional export crops receive negative
protection. l/
2.14     The exchange rate and tariff mechanisms, therefore, need to be geared
to efficient structural change in the economy. (The need to protect certain
infant industries and sectors against foreign competition can also be taken
into account.) There are certain advantages in using a general policy
instrument like the exchange rate (rather than tariff and subsidies) to get
relative prices generally into line and then provide specific incentives to
individual sectors and activities on a selective lbasis. These advantages of
using the exchange rate as an instrument of development policy rather than
tariffs/subsidies include: administrative efficiency; reduced incentives for
corruption; avoiding the difficulties in eliminating subsidies once granted;
more appropriate pricing of capital account transactions (to encourage
external investment and make external borrowing and remittances more expensive
as well as to reduce the incentives for 'over-invoicing'); more revenues for
the Federal and State Governments; and more uniform levels of protection
1/ "Nigeria Non-Oil Export Prospects", The World Bank, Report
No. 3771-UNI (grey cover), June 30, 1982.



- 11 -
across sectors and industries. The disadvantages relate not only to political
obstacles to devaluation and to the political and other obstacles to
implementation of complementary policies (relating to incomes and budget
policies) necessary to control second-round inflationary pressures. Careful
attention to such complementary policies is required in either exchange rate
or tariff/subsidy cases. On balance the exchange rate is by far the
preferable policy instrument.
B. POLICY ISSUES IN PUBLIC FINANCE
Federal Government
2.15     The Federal Government's budgetary situation is characterized by (i)
the large volume of resources from oil sales available to the public sector
and the increased role of the government in overall economic activities; (ii)
the vulnerability of the Federal Government to variations in oil revenues and
the consequent impact on the public investment programs; (iii) the increased
use of fiscal policy to manage aggregate demand.
2.16     The volume of oil revenues in the boom years ranges between
25-30 percent of GDP (Table 4 below) compared to about 10 percent before
1973. Since this revenue accrues to the government it has brought about a
corresponding expansion of the public sector. This is most evident in the
field of investment where public investment has recently constituted about
65-70 percent of total investment. Two important issues arise: (i) the future
public/private sector relationship; and (ii) the efficiency of public sector
expenditures.
Table 4: Federal Government Finances (Billion Naira)
1978/79    1979/80      1980       1981    1982
(12 Mos.)           (Est.)
Federally Collected Revenue       7.2        12.2       15.8      12.5    11.0
(Petroleum Receipts)         (4.8)     (10.0)    (13.2)       (9.7)   (8.3)
Less Share of State and
Local Governments              -1.4        -3.4      -3.9       -4.6    -4.3
Current Expenditures              2.3         3.9        4.3       4.4      4.6
Capital Expenditure and
Net Lending                     4.2         6.1       8.0        8.0    (5.6)
Surplus/Deficit                  -1.3       -0.8       -0.3       -4.6   (-3.5)
(Foreign Borrowings)          (0.9)      (0.1)      (0.2)      (0.5)   (0.5)
(Local Borrowing)             (0.4)      (0.7)      (0.1)      (4.1)   (3.0)
Memo Items
G.D.P.                           34.1        40.5       43.9      44.2
Gross Investment                  9.9         9.6       11.6      13.0



- 12 -
2.17     While an enlarged role of the public sector is almost inevitable
given the nature and size of oil revenues in the Nigerian economy, the future
implications for public-private sector relationships have to be spelled out as
a matter of prudent economic policy. The de facto position with regard to
public/private sector involvement appears to be: (i) agriculture - largely
private sector owned and operated - with government outlays limited to
supporting infrastructure and subsidized government inputs; (ii) basic
industry - public sector; light and medium scale industry - private sector;
(iii) trade and services - largely private sector except for a few government
supply corporations for selective trading of mainly agricultural commodities;
(iv) infrastructure - public sector (although lack and unreliability of supply
have necessitated a good deal of uneconomic investment by the private
sector). However, the areas of legitimate public intervention need to be
defined more carefully. In addition, it is important to note that the public
sector is in many ways pre-empting resources from the private sector. For
instance, in times of financial constraints when the government finds it
increasingly difficult to trim expenditures, it frequently resorts to external
financing and relies on monetary policy to achieve economic stability. The
brunt of the adjustments are thus borne by the private sector, since credit
restrictions and import controls which are instituted to check inflation and
to improve the balance of payments discourage private investment.
2.18     The overall nominal deficit of the Federal Government has varied
between 2-4 percent of GDP in years of normal oil revenues (1979/80, 1980
(9 months) to about 10 percent in 1981 (when oil revenues declined most in
absolute terms compared to a previous annual period). However, the impact of
the overall budget balance on the domestic economy can be better understood by
examining the domestic budget balance (the balance between domestic revenues
and the domestic component of government expenditure 1/). Here the deficit
ranged between 9-17 percent in the period 1978/79 to 1981. Thus Government
fiscal policies exerted a substantially expansionary impact on domestic demand
during the whole period - even when the overall budget was almost balanced.
2.19     A critical element in explaining the inflationary pressures in the
economy is thus the growing size of the domestic budget deficit. In order to
reduce this deficit it is essential to cut back government expenditures on
domestic goods and services and increase non-oil revenues. As a first step,
it is suggested that the Government should encourage the private sector to
undertake many of the activities which the sector can handle more efficiently
(e.g. in agriculture and industry) by strengthening the incentive
mechanisms. At present the Federal Government alone accounts for more than 60
percent of the country's total investment. Because the government is thinly
stretched, it is difficult for it to assess, implement and supervise such a
large investment program. The difficulties become particularly acute when a
fall in oil revenues requires a phased cut-back in investment expenditures.
1/   It is estimated that about 20 percent of the Federal Government's
recurrent expenditure and 50 percent of its capital expenditure leads to
foreign exchange expenditures. In this definition, these represent the
"non-domestic" component of Government expenditure.



- 13 --
2.20     In recent years Nigeria has been forced twice to reduce its capital
expenditures substantially. The first time was in 1977 when the military
government cut its capital expenditure by 30 percent across-the-board. The
second time was in April, 1982, when the present government introduced general
criteria to reduce by 40 percent its budgeted capital expenditure for 1982.
The two critical issues which the economy faces in such situations are (i) by
how much should total expenditure be reduced, and equally important, (ii) what
criteria should be used. In the short-run, these expenditure cuts are likely
to result in increases in unemployment. However, the medium-and long-term
impact of the stabilization and adjustment measures on employment should be
positive if these measures lead to sustained growth in the future.
2.21     It appears that for 1982 at least, most investment programs by and
large continued, and that foreign and domestic suppliers were forced to accept
a delay in payment. (The long-run cost of these arrears can be quite high
though). Actual reduction in capital expenditures was estimated at about 18
percent for the whole of 1982. In addition, the criteria used so far by the
Government to achieve future desired expenditure reductions can be improved.
The imposed cut-back across-the-board continued in the 1983 budget has the
merit of simplicity, but has the disadvantage of slowing projects near
completion and thus undermining their expected benefits. When confronted with
a severe financial squeeze, an appropriate way, at least in principle, would
be to rank all projects according to the rate of return on the incremental
investment required to complete the project, and to cut back those with the
least values in each sector. In practice the government would not be in a
position to do a detailed evaluation of each project given the large number of
projects in the investment program. It is therefore recommended that the
margi'nal economic rate of return criteria be adopted only for large ongoing
projects (say projects exceeding N30 million each). For the remainder of the
investment program the following criteria could be considered: (i) determine
priority sectors and reallocate investment funds accordingly and, (ii) within
sectors give priority to projects near completion; to consolidation,
rehabilitation and maintenance projects; to export-oriented and foreign saving
activities; to institution-building projects; and to projects where cost-
recovery is possible. High priority also needs to be given to developing a
moniloring system for major investments - an area in which the Bank can be of
assistance in the context of a technical assistance loan.
2.22     In addition to better management of government expenditures, there is
need for diversifying government revenues away from oil for two reasons.
First, oil is a non-renewable resource, and revenues from oil (whether
exported or used domestically) have started to decline from its peak in
1980. While these reflect the short-term fluctuations of world oil markets,
real export earnings from oil would start to decline in the mid-1990's as a
result of growing domestic consumption assuming an output level of 1.8 mbd for
the rest of the century.  Second, government revenues from oil are quite often
subject to erratic change due to external factors over which the Government
has little control.
2.23     In the short-and medium-term, a critical issue is to introduce
measujres to increase the level of non-oil revenues. At present, the ratio of
non-oil revenues to non-oil GDP is low by international standards (8 percent



- 14 -
for Nigeria compared to 16 percent for a sample of 47 developing countries for
the period 1972-76). An increase in non-oil revenues would help reduce the
heavy dependence of the Government on oil earnings.
2.24     There are several possible ways of strengthening non-oil revenues.
In the short-run selective increases in domestic excise taxes and an
improvement in administering company income tax are possibilities. With
respect to excise taxes on production and consumption, consideration should be
given to higher rates on tobacco products, alcoholic products (essentially
beer) and petroleum products, since these three categories alone accounted for
more than 40 percent of total excise taxes in 1981. The increases introduced
as part of the April Policy Package are a step in the right direction.
Petroleum products, however, are still heavily implicitly subsidized in
comparison to world market prices. Increasing the domestic oil price from the
present level of N13.8 ($20) per barrel in 1983, to $30 a barrel as
recommended by earlier World Bank missions, would bring it more into line with
projected world prices.
2.25     In the medium and longer run, increases in non-oil revenues should
come increasingly from improving the performance of major public enterprises,
emphasizing cost recovery in government programs and the introduction of a
broad based sales tax as well as increased use of state property taxes.  The
Government is aware of the substantial subsidies (grants and concessional
loans) given to public corporations and has been pressing them to operate on a
commercial basis by allowing most of them to increase their prices and
tariffs. The price increases, however, should be accompanied by improvement
in the management and operational efficiency of these public enterprises.
Similarly, cost recovery in government programs (e.g. education, health,
agricultural inputs including fertilizer) would add substantially to
government domestic resource mobilization efforts and also allow a further
strengthening of these programs. In part, this is a question of new fees and
charges, but in part it involves simply better efforts at collecting existing
ones.
2.26     With respect to the sales tax - which could serve as a possible
instrument for increasing the states' financial base - the potential seems
large. As a result of the oil boom there has been a rapid increase in the
share of GDP accounted for by the distribution sector, i.e. wholesale and
retail trade. This sector is virtually untaxed at the present time. An
effective tax policy would be to introduce a broad based sales tax on domestic
manufacturing and services. This tax could be levied at the manufacturing or
wholesale stage to avoid the administrative problem associated with taxing
smallholders. Table 5 below gives an indication of the potential of the sales
tax over the period 1978-81. For illustrative purposes, a one percent sales
tax would generate on a four-year average basis about N160 million (assuming a
75 percent effective rate of collection). This comes to about N8.4 million
per annum per state, which is comparable to the current level of internal
revenues of many states. The level of tax could in fact be higher (Lagos
State has already introduced a sales tax of 10 percent on selected service
establishments - largely luxury hotels and restaurants).



- 15 -
Table 5: Potential Base for Sales Tax
(In Million of Naira)
1978       1979        1980         1981
Imports of Goods and NFS           9,260       9,213      11,326       13,773
Manufacturing (VA)                 1,785       2,937       2,354        2,648
Wholesale and Retail Trade         7,021       8,726       9,617       10,450
Hotels and Restaurants                84          96         106          115
Total Sales Tax Base              18,150      20,072      23,403       26,986
Domestic Sales Tax Base           (8,890)   (10,859)   (12,077)    (13,213)
State Budgetary Operations
2.27     The analysis of selected state finances suggests that all the states
have incurred substantial overall budget deficits each year since 1978/79.
The only exception for some states would be 1979/80, a year when oil revenues
recovered rapidly from the drop in the preceding year. In 1981, despite a
more favorable revenue-sharing formula to the state governments compared to
1980 the states' budget deficit grew faster in that year. The main factor
behind this was the decline in oil revenues accompanied by an unrestricted
increase in current expenditure. The financial crisis culminated in the third
quarter of 1981 and resulted in the inability of many states to meet their
recurrent expenditures. Many of them could not even pay civil service
salaries for as long as two months and had overdue payments for some months to
building contractors. In addition, many ongoing projects suffered-they were
either stopped or underfunded.
Table 7: Summary of all State Governments' Finances
(In Millions of Naira)
1979/80              1980 1/                 1981
Budgeted Estimate Budgeted Estimate Budgeted Estimate
Total Revenues      3,483      3,483     5,493      4,449      6,432      4,374
Recurrent Exp.      2,538      2,538     4,265      3,200      4,945      3,659
Recurrent Surp        945        945      1,228     1,249      1,487        715
Capital Exp.        1,775        976     4,709      1,743      6,914      2,212
Budget Deficits      -830        -31    -3,481       -494      5,427    -1,497
1/   On a 12-month basis.
2.28     The annual budget deficits have been largely covered by domestic
borrowing, the bulk of which has come from development stock loans. Most of
the funds received from domestic commercial banks by some states have been
advanced to the states in the form of overdrafts on the basis of the states'
future statutory allocations from the Federal Government. External borrowing
was miarginal up to 1980. Since then, however, many states secured several
external loans for specific projects. As of April 1, 1982 total external
borrowing of all the states amounted to about N3.5 billion ranging from N22



- 16 -
million for Kwara State to N367 million for Imo State. While at present the
debt service of each state is quite low, it is expected to reach a large
proportion of each state's total revenue in the near future. Federal
guarantees for such debt will probably also affect the Federal Government's
own creditworthiness with international banks.
2.29     The financial difficulties which have been experienced by almost all
the states since 1981 indicate strongly the vulnerability of the states to
fluctuations in the oil market. They also show, to a varying degree, the lack
of experience of many states in budgeting in general, and in dealing with
financial crises in particular. However, it has become increasingly clear
that the local financing base of the state governments has to be
strengthened. Besides increasing the yield from existing taxes, the
introduction of the one percent Sales Tax, mentioned above, to benefit the
states should be considered as a matter of priority. Under the existing
Constitutional provisions the Federal Government has no legal means of
enforcing fiscal responsibility by the States. However, in any federal system
the Federal Government has considerable leverage, and Nigeria is no
exception. It is important for the Federal Government to encourage more
responsible fiscal behavior by the states.
C. ISSUES IN MONETARY POLICY
2.30     Issues in monetary policy relate to:  (i) the size of the
government's domestic deficit and the degree to w'hich it is offset by other
policy interventions; (ii) the credit ceilings for the private sector;
(iii) credit allocation policies and (iv) the structure and level of interest
rates.
2.31     The movements in monetary aggregates in Nigeria are closely linked to
the Federal Government's domestic deficits particularly since 1973/74 (Table 8
below). The movements are not smooth, however, since monetary expansion is a
result of several other policy interventions such as import liberalization and
ceilings on private sector credit. For example, in 1978/79, the expansionary
effect of the government's domestic budgetary operations was offset to a large
extent by drawing down accumulated foreign assets and slowing down private
sector credit expansion. Again in 1981/82, when the Federal Government's
domestic deficit amounted to about N3 billion, the monetary effect of the
government's domestic deficit was offset to a large extent by reserve losses.



- 17 -
Table 8: Domestic Deficit and Monetary Expansion (N Million)
Change
Domestic    Credit to the   Net Foreign   Net Other         Ml  2/       M2  3/
Period   Deficit 1/  Private Sector    Assets          Assets        Percent      Percent
1973/74       487            190            525           24           21.8        25.6
1974/75      1203            243           2963         2960           90.6        81.9
1975/76      3145            719           -253         -248           70.4        63.2
1976/77      3646            718           -192         -124           42.8         38.0
1977/78      1194            929           -636         -497           17.1         14.2
1978/79      3228           1185          -1129        -1256            5.2          9.5
1979/80      6025            974           2391         2364           32.0        37.9
1980/81      4680           2273          -1820         1887            8.8         17.5
1981/82      3170           1830          -3894        -3881           12.5         13.5
1/  CaLculated on the assumption that 20 percent of the Federal Government recurrent
expenditure and 50 percent of its capital expenditure lead to foreign exchange
expenditures.
2/  Currency and demand deposit with the commercial banks.
3/  Ml + Time and Savings deposits with the commercial banks.
2.32     The Credit Ceilings.  Credit ceilings have been used as the main
instrument of monetary policy in Nigeria. There is a ceiling on the aggregate
volume of credit as well as on the portfolio distribution of the loans.
According to the current ceilings for the FY1982/83 a bank may not expand its
total 'Loans by more than 30 percent over the level reached in 1981/82. The
overall ceiling on credit is theoretically imposed on the basis of macro-
econom:ic considerations. The safe limit for credit expansion is derived on
the basis of estimated rate of growth, allowable rate of inflation, and
estimated movement in balance of payments. Then private sector credit
requirements are estimated on the basis of past trends and estimates of future
activity and government borrowings are derived as a residual. However, the
Government usually does not keep within the limits thus derived as indicated
earlier. Consequently, money supply and domestic liquidity both have a
tendency to grow at a faster rate than planned. In 1982 the rate of credit
expansion was estimated at 34 percent - with credit to the Government
increasing at 57 percent and credit to the private sector at 18 percent.
2.33     In order to achieve long term growth with monetary stability, the
missionl felt that the Government needed to moderate its domestic deficits both
by increasing domestic revenues and cutting down on its current and low
priority investment expenditures. On the other hand, given the vulnerability
of the Nigerian private productive sectors in the present economic context, it
was felt that private sector share of credit should be increased.
2.34     Credit Allocation Policies.  Selective credit controls have been used
in Nigeria both as a device to control inflationary pressures and to channel
private investment to priority sectors. Credit is presently allocated within
18 sectors (of which 11 are 'preferred' sectors where allocation limits are
set in 'minimum' terms and 7 are 'non-preferred' sectors with maximum credit
limits'). In Nigeria, the arguments for credit controls have been based partly



- 18 -
on the fact that private profitability of agriculture and industry, the top
priority sectors, are considerably lower than in construction and service
sectors, so that credit and private sector investment tend to flow to
construction and services. Long-term solutions to the problem lie in
mitigation of the adverse effects of the oil boom on the domestic economy by
appropriate trade policies, restructuring government investment programs, and
establishing alternative mechanisms for delivering credit to priority
sectors. In the short and medium term, where the above conditions take time
to be effective, it is considered that credit ceilings are a useful tool,
which should be used in conjunction with other measures, to direct credit to
priority sectors. It is recommended, however, that the (seven) categories
within the non-preferred sectors be eliminated in order to reduce the
complexity of the system.
2.35     Interest Rates. Both structure and level of interest rate were
reviewed (current lending rates are between 7 and 13 percent) . It was felt
that the structure of interest rates could be unified without much disin-
centive to the preferred sectors because (i) interest payments usually
constitute only a small part of overall cost of production and hence are not
the sole factor in investment decisions; (ii) the system of lower rates on
lending to the preferred sectors is a disincentive for the commercial banks to
lend to these sectors; and (iii) lending to preferred sectors such as
agriculture and industry involves higher costs in terms of credit analysis and
supervision.
2.36     Regarding the level of interest rates, the more important arguments
for a positive real rate of interest in Nigeria relate to increasing financial
savings, controlling inflation, and increasing allocative efficiency.
According to this rationale, if the yields on financial assets remain
negative, they become costly to hold and savings tend to shift to goods or
other assets with higher real yields. This process reduces the ratio of money
(MI and M2) to GDP and so reduces savings mobilization by the banking
sector. This is not to say that interest rates are the predominant factor in
determining the ratio of money to GDP. Analysis of data for Nigeria and other
countries indicates that other factors, particularly the rate of growth in
non-traditional (monetized) sectors are more important. At the same time,
from the examination of the composition of M2, and again from experiences of
other countries it was felt that a policy of positive interest rates could be
used in Nigeria for increasing the ratio of interest-bearing deposits to M2
and thus perhaps dampen both speculation and lower priority real activities in
the organized sector. Positive interest rates would also discourage excess
demand for credit coming from negative rates. And in so doing they would
increase allocative efficiency - for example by reducing incentives for
choosing production techniques that are excessively capital intensive. The
mission recommended that current interest rates be raised to a level above the
expected rate of inflation.
D. INCENTIVES FOR AGRICULTURE
2.37     There is vast regional diversity in Nigerian agriculture, but in
macro-economic terms the situation can be summarized as follows: The sector
has ceased to be the major provider of foreign exchange and now accounts for
over $2 billion of food imports annually; and by international standards, and
at existing exchange rates, it has become a high cost, inefficient, highly



- 19 -
subsidized producer. Trends in production remain one of the most
controversial issues in Nigerian agriculture. Production estimates cannot be
reconciled and have to be viewed in the context of total supply (including
imports) and total demand (taking into account the effects of price changes
and aggregate consumption changes). Such analysis was conducted and the
following conclusion emerged. Overall output remained probably stagnant
between 1973 and 1981, with production of grains increasing at the same rate
as the growth rate of population, but production of root and export crops
declining substantially.
2.38     The main longer-term concern for agriculture is to maintain a viable
sector for the post-oil era. In more specific terms, promoting a viable
agricultural sector implies two things: devising policies that induce
efficient technical progress to make Nigeria more competitive in world
agricultural markets, and sustaining rural incomes at reasonable levels, both
to sustain present living standards and to prevent the rural-urban migration
flow from becoming too large. Both investment and pricing policies are
essential to this strategy.
2.39     It is not immediately obvious that part of Nigeria's agriculture's
problem could be lack of sufficient producer incentives. Internal prices for
Nigeria's agricultural products are, on average about 50 percent higher than
international standards, when converted at the official exchange rate. The
government has extended protection to the agricultural sector via tariffs and
quantitative restrictions on imports, and it also has extensively subsidized
agricultural inputs. Fertilizer, for example, receives an 85 percent
subsidy. Furthermore, many observers would argue that lack of adequate
technologies and input supplies are the true bottlenecks to expansion of the
sector, not insufficiency of price incentives. The mission addressed
Nigeria's pricing policy questions in both a narrower and a broader context.
The narrower issue was whether pricing incentives and Government support are
extended in an efficient way. The broader issue concerned the appropriate
terms of trade for Nigerian agriculture, both internationally and
domestically.
2.40     Although Nigerian agricultural prices appear high by international
standards, it is not obvious that they are "high" in a meaningful sense.
First, the Naira is overvalued, so some form of exchange rate adjustment would
be n,eeded to bring domestic agricultural prices closer to international
levels. Secondly, the increasing share of food consumption which is accounted
for by duty free government imports has limited to a degree the rise in
producer prices, and therefore it has transferred resources from producers to
consumers. In any event, for Nigeria's agriculture to avoid decline, its
prices must be high, given the cost structure of the entire economy and
particularly of labor. (The oil syndrome has caused a sharp increase in the
wage for unskilled labor that has affected agriculture most). The more
difficult issue is whether those prices should be raised relative to non-
agricultural prices. There are a number of reasons why this is necessary.
First, an increased reliance on imported food is not a viable strategy in view
of Nigeria's increasingly constrained foreign exchange situation and the fact
that oil exports will start declining from the early 1990s. Second, social
objectives require that rural incomes be maintained and difficult-to-reverse



- 20 -
rapid rural-urban migration be stemmed. Third, the infant industry argument
also applies to agriculture in that technical and institutional changes are
required which will need time to master.
2.41     In addition to the need for higher prices, trade policies in
agriculture have to be rationalized. The trade policies followed so far have
been based largely on quantitative restrictions and have introduced a large
element of uncertainty into the incentives structure for agriculture. Large
imports of wheat and flour in 1978 and 1979 (1.3 million tons on average)
contributed to marked declines in prices in 1979 before prices recovered in
1980. Rice imports followed a similar but even more pronounced pattern.
Volumes increased eleven-fold between 1976 and 1978 - from under 50,000 mt to
over 550,000 mt - and then dropped sharply due to import restrictions. These
adverse experiences lead to the conclusion that Government should permanently
transform its trade policies for agricultural products from a quota-based
system to a tariff based system and set required tariff levels to achieve
target prices that establish a level of incentives which would be adequate to
establish a larger degree of self sufficiency in food production.
Table 9: Measures of Protection at FaLrm Gate (1979) 1/
(percent)
(NPR)           (EPR)
Nominal      Effective          Net             Net
Protection      Protection       NPR  2/         EPR  2/
Rates           Rates
Rice (Paddy)       188             218            139            166
Maize               67             109             38             74
Sorghum             23              50              2             24
Millet              59              70             24             41
Groundnut           57              64             30             36
1/ Effective protection differs from nominal protection in taking account of
offsetting protection on imported inputs.  Net nominal or effective protection
also takes account of shadow pricing of foreign exchange.
2/ Assuming a 'shadow-price' of foreign exchange of 79 percent of the
official rate. This is based on the 'standard conversion factor' currently
used for Bank projects in Nigeria.
2.42     The determination of the appropriate level of incentives through
protection of the agriculture sector must initially be based on a review of
the existing situation. Table 9 above, based on a recent Bank study 1/, shows
that the major crops already receive substantial levels of effective
1/ "Agricultural Marketing and Prices in Nigeria's Green Revolution - Recent
Developments and Policy Issues", The World Bank, Agricultural Sector Note
(white cover), May 1981.



- 21 -
proltection ranging from 50 percent for sorghum to 218 percent for rice at
existing exchange rates (the net effective protection is reduced by half with
a 21 percent exchange rate correction). To justify additional incentives, it
must be shown that: (a) producer supply responses to additional price
incenrtives would be adequate; and (b) that additional efficiency losses to the
economy and income transfers from consumers to producers are compensated, at
least partially, by the benefits from increased production. In addition,
incentives must be extended in a uniform manner (i.e. through a uniform tariff
rather than working out special tariffs for each commodity) so that something
approaching comparative advantage is operating.
2.43     Examination of Nigerian econometric studies and data from Bank
projects (Gusau and Funtua) indicate substantial degrees of production
response to price changes.  The level of price changes required need ideally
to be generated from an agricultural 'policy model' (currently being developed
in tae Bank). In the absence of the model, the method based on field studies
of costs of production (the "average cost" method) was used. This indicated
that a 75 percent margin over international prices at current exchange rates
i.e. an effective protection rate of about 75 percent would generate a growth
rate of 3-4 percent for the bulk of the food crops (for rice the margin
required was 133 percent) while a 25-40 percent margin would be required to
generate similar growth rates for export crops. Transfers from consumers to
producers and efficiency losses were not investigated in detail but it was
recognized that consumers would have to be at least partially compensated and
that efficiency losses were to be minimized through not giving total
protection to completely 'inefficient' crops (e.g. rice).
2.44     The complexities of the issues involved require more detailed study
and this is being undertaken by a Bank mission which visited Nigeria in March
1983 to study agricultural price and trade policies. Further work will be
done under Bank financed technical assistance linked to forthcoming
agriculture projects. However, a preliminary conclusion appears to be that
present incentive levels in agriculture may still be too low to elicit
appropriate production responses (despite the recent expansion of the tariff
net to encompass government food imports). An effective protection rate in
the magnitude of 75 percent at existing exchange rates should be aimed at.
This could be achieved by increasing the level of tariffs on all agricultural
produicts to around 75 percent together with the gradual reduction and eventual
elim:ination of input subsidies and by introducing an export subsidy of 25-40
percent on all agricultural exports. A more efficient alternative could be to
eliminate input subsidies and consolidate the tariff for all agricultural
commodity imports at their current weighted average level of 50 percent along
with an exchange rate adjustment. Other possible combinations of exchange
rate and/or tariff policies could also be examined. However, the choice of
the iinal combination must be based on broader macro-economic considerations.
2.45     Government Support to the Agriculture Sector.  Agricultural input
subs:dies in Nigeria are extended principally on fertilizer and pesticides,
agricultural credit, machinery, and improved seeds. The rates of subsidy are
quite high, reaching 85 percent for fertilizer and 50 percent for tractors.
Agricultural credit receives preferential pricing, going at a rate of as low
as 8 percent when annual inflation is about 20 percent and industrial credit
typically carries interest rates of 9-14 percent. In 1980, the values of
input subsidies were Fertilizer -- N200-300 million;  Pesticides -- N114



- 22 -
million; Machinery -- N50 million; Credit -- N67 million; Seed MIO million
or a total of N450-550 million which represented about 10 percent of the
Federal Government's current expenditures in 1980 and 6 percent of combined
current expenditures of Federal and State Governments. Excluded from this
list are the subsidies implicit in providing gravity-fed irrigation water
below cost, and in sales of gasoline at the low domestic price.
2.46     The role of input subsidies in increasing farmer incentives, inducing
adoption of new technologies, and helping to keep prices lower for consumers
would be indisputable if enough money were available for adequate availability
of these inputs at the subsidized price.  Unfortunately this is no longer the
case. Another key issue is one of efficiency: can the same objectives be
achieved at a lower fiscal cost? The evidence strongly suggests that the
answer is yes: there appears room for saving in these programs, and hence for
redirecting government agricultural expenditures to higher priority
agricultural (and other) programs. Thus, in the case of agricultural credit,
quantity restrictions are more important than the price, as it has been
estimated that credit institutions supply only 5 percent of the needs of
agricultural borrowers. Similarly, in the case of fertilizer, the subsidized
price is quite low relative to farmers' willingness to pay. It has been
estimated that, through re-sales, the effective subsidy rate on fertilizer to
final users may have been reduced to around 45 percent. As a first step
towards rationalizing subsidies the mission recommends that the fertilizer
subsidy be substantially reduced. Similarly, the subsidy on agricultural
machinery should be eliminated. The marginal losses to the farmers would be
more than compensated for by higher farm gate prices resulting from the
changes in tariff policies recommended by the mission.
2.47     The mission also recognizes that pricing policies alone are
insufficient to correct the problems of Nigerian agriculture. Programs for
improving the deliveries systems for agricultural inputs and rural development
programs needed to be accelerated beyond present levels. Emphasis, within the
overall expenditure program should be given to productive investments in
viable agriculture projects; i.e. projects with an acceptable economic rate of
return (at least 10 percent). Allocation of resources between existing
agricultural subsectors and programs need to be examined carefully. This is
currently being undertaken as part of the work of a World Bank mission
currently (April/May 1983) working with the government in examining Nigeria's
ongoing public investment programs.
E. INCENTIVE STRUCTURE FOR INDUSTRY
2.48     While the industrial sector in Nigeria constitutes only a relatively
small portion of the total economy, less than 7 percent of GDP in 1979/80, it
occupies a prominent position in the country's development goals and plans.
In the aggregate, the sector's performance during the 1970's would appear to
have been quite reasonable - at least as far as growth is concerned. The
average annual growth rate of real total manufacturing between 1973/74 and
1979/80 was 11.5 percent, while real GDP grew at 4.5 percent during this
period. As a result, the share of total manufacturing in GDP increased from
4.43 percent in 1973/74 to 6.53 percent in 1979/80. Preliminary estimates for
1980 and 1981 would suggest that this trend has continued. However, Nigerian
industry has with respect to a number of major products been unable to keep
pace with the rapid growth of the domestic market. As a result import



- 23 
penetration in a number of activities increased substantially. The sector has
also suffered from a number of major constraints which have adversely affected
its efficiency and competitiveness. These include most notably: (a)
important deficiencies in the incentives system (due to trade and exchange
rate policies); (b) major "supply-side" constraints resulting from important
shortages of infrastructure (notably power supply) and of skilled and
technical manpower; and (c) a complex and cumbersome regulatory framework
governing private investment.
2.49     Nigeria, like many developing countries, has pursued an
industrialization strategy relying heavily on import substitution. During the
first stages of this approach, it was envisaged that final goods which were
previously imported would be manufactured domestically, generally with
imported inputs. It was also anticipated that as the sector developed,
backward linkages would be exploited and the intermediate goods and materials
used to produce the final goods would eventually be manufactured
domestically. While there has been progress in many sub-sectors in the
manufacture of final goods, it is now widely perceived that the exploitation
of backward linkages and the production of intermediate goods and services,
has been inadequate.
2.50     In addition to these problems, Nigerian manufacturers are seen as
relatively inefficient producers, offering relatively low quality products at
high costs.  This has led to a general preference for imported goods and has
resulted in, among other things, considerable smuggling, which has seriously
undermined a number of important subsectors. Another implication of the high
cost structure in Nigeria has been the inability to export manufactured
goods. An additional problem of long-standing concern has been the
concentration of a high proportion of industrial activity in several centers,
notably Lagos, Kano, and Kaduna. There has been an ongoing desire to achieve
a more even geographical dispersion of industrial activity, as a means of
sharing the fruits of development with all regions of the country.
2.51     It was in the above context that the structure of industrial
protection in Nigeria was examined in Bank studies (most recently in
1980--81)1/. For the two periods studied, it is clear that the consumer goods
sector has received substantially higher levels of protection than did the
intermediate goods or capital goods subsectors. This outcome could have been
expected because of the import substitution strategy which has been pursued by
Nigeria. It would also seem safe to maintain that this condition has existed
throughout the 1970's. Another finding, consistent for the two periods, is
the negative rates of effective protection for export industries which would
suggest a persistent and significant bias against the export sector. Perhaps
the most interesting finding is with regard to the relative incentives for
industries processing mainly domestic raw materials and those processing
mainly imported raw materials, with the latter receiving almost twice the
incentives of the former.
1/ ''The Structure of Industrial Incentives in Nigeria", The World Bank,
Industry Sector Report (white cover), September 15, 1981.



- 24 -
Table 10: 'Net,a/ Effective Rates of Protection For Selected Industrial
Groups (Percent)
197 _   a/   1979/80  a
Consumer Goods Industries                             55.8         124.9
Processing Mainly Domestic Raw Materials            12.7          81.7
Processing Mainly Imported Raw Materials            74.6         146.9
Intermediate and Capital Goods Industries              1.5          37.7
Processing Mainly Domestic Raw Materials            -9.9          16.4
Processing Mainly Imported Raw Materials            24.4          65.6
Export Industries                                    -22.3         -15.1
Agro-Allied Industries                                -6.7          14.7
Mineral Resource Based Industries                    -10.3         -13.5
Assembly Industries                                   79.4         215.8
Construction Material Industries                       N.A.         -3.1
Metal Working and Engineering Industries               N.A.         50.8
a/  The exchange rate was 'shadow-priced' at 65 percent in the Bank study on
which this table is based.
2.52     The broad structure of protection provides the greatest incentives to
the consumer goods sector, particularly those activities which rely most
heavily on imported inputs. Assembly activities, notably motor vehicles,
electrical equipment and housewares, and some fabricated metal products,
receive relatively very high levels of protection. These activities typically
have very low value added/gross output ratios at world prices and therefore
make a relatively small contribution to 'the sector's productivity. It should
be noted that this pattern of incentives runs very much counter to the Govern-
ment's stated objectives for the sector. One long-term goal for the
industrial sector has been the greater development of activities relying more
heavily on domestically derived materials, notably agro-allied and resource
based industries. The estimates presented in Table 10 make clear that the
prevailing structure of incentives tends to work against these subsectors.
2.53     An important problem with the existing structure of industrial
incentives is the considerable variation in net effective rates of protection
across activities. Economic efficiency is generally attained when the levels
of net effective rates of protection are uniform across activities. It should
be noted that there are circumstances when deviations from this rule are
warranted, such as when there are externalities due to backward linkages,
labor force development, etc. However, large variations in industrial
incentives distort the pattern of investment. In Nigeria, these distortions
would appear to have been directing investment into numerous activities where
the ratio of value added to gross output is low and where the prospects for
developing a comparative advantage are probably quite small. Investment in
these activities is at the expense of activities with higher value added/gross
output ratios and where the prospects for more fully exploiting domestic
resources would appear to be greater. The analysis therefore strongly suggest
the need to move progressively towards a far more even structure of
incentives.



- 25 -
2.54     An incentive policy for industry aimed at narrowing the variation in
net effective rates of protection can only be viable if the multiplicity of
instruments to provide incentives (including wide variations in tariffs) are
reduced. An appropriate policy could be to adjust the exchange rate downwards
to provide a 'common' level of incentives, at the same time, initially,
appropriately reducing "peak" tariff rates and raising those for industries
still suffering from negative protection incentives. This would have to be
combined with adjustments in other policy instruments notably the phasing out
of quantitative restrictions. Tariffs (and other incentives mechanisms) could
then be adjusted to meet the requirements for individual industries for which
higher levels of protection was clearly justified on "infant industry"
grouncts, provided that such additional incentives were phased out over an
explicitly determined period (say 5-7 years) and explicit economic criteria
were used to select the beneficiary industries. Table 11 below examines the
"net" effective protection based on alternative assumptions of the extent of
excharige rate distortion.
Table 11: Estimates of the "Net" Effective Protection Based on Alternative
Assumptions of the extent of Exchange Rate Distortion, 1979/80
Extent of Exchange Rate Distortion
0%               20%            35%
I.    Consumer Goods Industries
Food (Meat and Dairy)               7 to 16%      -3 to -11%   -16 to -20%
Leather                                 361%             216%           147%
Spinning/Weaving (Grey Baft)       -3 to 99%      -17 to 64%      -2 to 40%
II.   Intermediate Goods Industries
Paper Containers                  73 to 128%       42 to 97%      21 to 72%
Industrial Chemicals (Gases)        2 to 26%      -19 to 21%   -32 to -18%
Fertilizers                       -38 to 64%      -53 to 40%    -62 to 27%
III. Metalworking and Engineering Industries
Electrical (Refrigerators)         63 to 80%       36 to 50%       17 to 28
Agr. Machinery (Presses)                -13%             -28%           -39%
Motor Vehicle Assembly (Trucks)          325%            251%           201%
2.55     Taking these and other relevant factors into account it was felt that
a 20-:35 percent devaluation in 1983 and tariff levels having the current
weighted average but with the differentials sharply narrowed (or a similar
appropriate combination of exchange rate and tariff adjustments) would put
imporlant segments of Nigeria's industrial production structure at
international par c.i.f. Lagos and would allow the phasing out of quantitative
restrictions. However, in recognition of the structural difficulties inherent
in industrializing in an oil syndrome economy and on 'infant industry grounds'
there is also a selective need for additional protection which should be
phased out over time (given the efficiency and other costs associated with
protection). While the implications for tariffs would have to be worked out



- 26 -
in detail on a commodity by commodity basis, the preliminary indications seem
to be that at a minimum tariffs for manufactured consumer goods, presently in
the 33-150 percent range with a weighted average of about 50 percent, should
be consolidated into a narrower range of 15-60 percent initially with the
exception of luxury goods. Ultimately this range should further be brought
down to 10-40 percent with the same weighted average. Given the extensive use
of import licensing and quantitative restrictions, further analysis to
determine the appropriate level of tariffs (at future possible levels of
exchange rates) would need to take into account their protective impact. An
export subsidy for industrial products would also be required in the absence
of the exchange rate adjustment to allow the most efficient segments of
Nigerian industry to export. For simplicity, an "across-the-board" export
subsidy of about 25-40 percent (as in agriculture) could be introduced. The
need to provide additional protection for important sectors of Nigerian
industry (some of which are presently receiving negative protection) is
reinforced by the fact that, on average, relative prices in industry have
fallen way behind both services and non-export agriculture (Table 2). It
should be recognized, however, that the objective of policy should be not only
to reduce distortions between various sectors of the economy but also within
the industrial sector itself. In this respect, in revising the tariffs for
manufactured goods, it would be important as a longer term goal to reduce the
differential in effective protection between consumer goods industries and
intermediate and capital goods industries. The World Bank's 1981 mission on
"Industrial Incentives Policies" is now in the process of finalizing its
report and puts forward detailed recommendations on ways to achieve this
objective.
2.56     Given the multiple constraints affecting the industrial sector today,
a coherent medium-term strategy needs to be devised as a matter of urgency to
ensure its efficient development. This strategy should include in addition to
the measures outlined above, (a) stepped up efforts to address the
infrastructure and manpower constraints affecting the sector, and (b) steps to
simplify and rationalize the regulatory framework and to strengthen the
government's policy analysis and data gathering capabilities for the sector.
F. MACRO-ECONOMIC MODELLING
2.57     General equilibrium macro-economic policy models provide a useful
instrument to analyze and consider the consistency of macro-economic policy
options. These models provide no instant answers to policy planning. What
they can do, though, is to start from behavioral relationships among variables
derived from other studies (such as the production response to increases in
producer prices) and then to consider the consistency and detailed
implications of any given set of policy variables included. Such a model was
specially developed for Nigeria by the mission and is being refined for future
use by the Government. The model aims at identifying the macro-economic
effects of individual policy changes (e.g. exchange rate or increasing
agricultural investment) as well as the interactive effects of alternate
packages of policy changes. Particular interest was attached to the effect of
the new policies on growth in GDP and in sectoral output, the balance of
payments, government finances, money supply, wages and prices. A good deal of
development work has been done on the model, and a wide range of policy
combinations have been tried. This model has not been used to generate new
policy proposals, but to simulate the effects and consistency of policy



- 27 -
proposals that the mission had derived from previous specialized studies. We
wish to be modest in our claims for the model, which still requires further
development efforts, and which is not in any event crucial to the policy
package recommended here. However, its results to date have been fairly
robust and have, overall, strongly supported the policy package proposed.
2.58     Preliminary results of these simulations, suggest the following major
conclusions:
(i) The most important single step to increase output is to
increase producer incentives. A 25 percent devaluation in
1983 (maintained subsequently by a crawling peg through 1985)
would add about 3-5 percent to non-oil output.
(ii) An important determinant of how large a devaluation (or
tariff/subsidy package) should be is the extent of second-
round inflation that would be generated. Here, incomes
(wages) policy is crucial, as is overall demand management.
(iii)  The most important factor in overall demand management in the
Nigerian context is the fiscal policies pursued by the
Government. A conservative fiscal policy, pursued as a part
of overall economic stabilization policies adopted by the
government, would result in positive results both with regard
to overall levels of inflation as well as the current account
deficit. There would, however, be costs in terms of economic
activity.
(iv) Controlling inflation following a devaluation should be a
major focus of government policy (as experience in other
countries also strongly suggests). This has important
implications, as discussed above for demand management as well
as for incomes policies. The actual increase in consumer or
producer prices could be less than suggested by the nominal
devaluation (or tariff increases), because, in a situation
like Nigeria's of foreign exchange rationing and quantitative
restrictions, actual prices paid already often exceed the
official price that would prevail after the devaluation.
G. CONCLUSIONS AND RECOMMENDATIONS FOR ECONOMIC POLICY 1983-85
2.59     The broad conclusions of the mission, reinforced by simulations
obtained from the macro policy model developed by the mission, suggest that
policies directed toward stimulation of non-oil exports and domestic
agriculture and manufacturing can have favorable macro impacts when they are
coupled with measures aimed at maintaining the real exchange rate intact.
However, as experience in other countries strongly indicates, price incentives
are by no means enough. They must be accompanied both by demand management
policies to maintain these incentives and avoid rapid inflation, and by a set
of supply-side policies in the productive sectors in order to encourage an
effective supply response to the incentives.



- 28 -
2.60     The macro-economic policy recommendations of the mission, are as
follows:
(i) Trade (including Exchange Rate) P'olicies. Provide additional
incentives to the domestic productive sectors (agriculture and
industry) in 1983 by an exchange rate adjustment supplemented
by tariffs and export subsidies on non-oil exports. Crawling
peg thereafter to maintain real exchange rate intact.
(ii) Fiscal Policies. Bringing down F'ederal Government's budget
deficits to manageable levels from about 10 percent of GDP in
1982. Introduction of sales tax of at least a 1 percent to
benefit States. To be tried at the wholesale level in the
case of manufacturing and introduced selectively in its
initial stages. Increase in domestic oil prices to reflect
international levels. Introduction also of state property
taxes.
(iii) Monetary Policies. Unification of and gradual increase in
interest rates to achieve positive real interest rates.
Private sector share of credit to be increased.
(iv)  Expenditure Policies.  Thorough review of expenditures
programs, with emphasis on investments in viable agriculture
projects, e. those with an acceptable rate of return.
Eliminate the fertilizer subsidies gradually over time,
relieving this heavy fiscal burden which had constrained
agricultural and other programs.
2.61     The sector specific institutional policy recommendations of the
mission are:
(i) Balance of Payments. Creation of a "Stabilization Fund" to
operate in conjunction with appropriate long term borrowing
policies. Large inflows of external capital are required for
the foreseeable future. For the years 1983-86, about
$11 billion of disbursements from MLT loans will be needed.
The mobilization of these resources without the payment of
excessive "front-end" fees will require strengthening of
external finance coordination, debt monitoring and servicing
units in the Ministry of Finance. An immediate priority is
the regularization of the remaining trade arrears for which
the Ministry of Finance appears to have successfully utilized
the services of international finance houses. For the future
the government must develop a longer term external borrowing
strategy.
(ii) Fiscal Policy. Increase domestic resource mobilization
through strengthening administrative tax-collection
mechanisms. Emphasis on cost recovery in Government
programs. Development of criteria to evaluaate ongoing public
investment programs to determine priorities. Overall public
investment review before formulation of Fifth Five Year Plan
(1986-90).



- 29 -
(iii)  Monetary Policy.  Simplification of credit allocation
procedures by amalgamation of category of "non-preferred"
sectors into one category.
(iv)  Agriculture.  Phase out quantitative restrictions on imports,
substituting the exchange rate change plus tariffs for these
direct, often highly varying restrictions. Additionally
strengthen domestic agricultural capabilities by improving the
deliveries systems for agricultural inputs and accelerating
rural development programs.
(v)  Industry. Sharply reduce, and preferably phase out,
quantitative restrictions on imports. Review of industry
incentive structures to narrow band of incentives and remove
discrimination against producers using domestic inputs. Step
up efforts to address the infrastructure and manpower
constraints affecting the sector. Take steps to simplify and
rationalize the regulatory framework and to strengthen the
government's policy analysis and data gathering capabilities
for the sector.



- 30 -
STATISTICAL APPENDIX
Table No.                              Heading                           Page No.
Population and Employment
1.1           Distribution of the Population of Nigeria by
Age and Sex: 1963.                                            33
National Accounts
2.1           Gross Domestic Product by Industrial Origin
at Current Prices, 1973-81 (N millions).
2.2           Gross Domestic Product by Industrail Origin at
Constant 1977/78 Prices, 1973-81 (N millions).                35
2.3           GDP Growth Rates by Industrial Origin 1974-81, (%).            36
2.4           Gross Domestic Product Implicit Deflators                      37
1977/78 = 100.
2.5           Gross Domestic Expenditures at Current Prices,
1973-81 (N millions).                                         38
2.6           Gross Domestic Expenditures at Constant 1977/78
Prices, 1973-81 (N millions).                                  39
Foreign Trade and Payments
3.1           Balance of Payments, 1973-81 (N millions).                      40
3.2           Balance of Payments, 1973-81 ($ millions).                      41
3.3           Exports of Major Commodities, 1973-81.                          42
3.4           Imports by End-Use, 1973-81 (N millions).                       43
3.5           Composition of Imports by Commodity Sections,
1973-81 (N millions).                                          44
3.6           Exchange Rate Movements, December 1973-June 1982
(Monthly average).                                             45
External Debt
4.1           External Public Debt, 1977-81 (In millions of
U.S. dollars, end of period).                                  46
Fiscal Statistics
5.1           Actual Federal and State Government Investment
Outlays Under the Third National Development
Plan by Sector, 1975/76-1979/80.                               47



- 31 -
Table No.                             Heading                            Page No.
Fiscal Statistics contd.
5.2           Planned and Actual Federal and State Government
Investment Outlay UJnder the Third National
Development Plan and Projected Investment Outlays
Under the Fourth National Development Plan by
Sector, 1975/76-1979/80 and 1981-85.                           48
5.3           Federal Government Budgetary Revenue,
1978/79-1982 (N millions).                                     49
5.4           Federal Government Budgetary Current Expenditure,
1978/79-1982 (N millions).                                     50
5.5           Federal Government Budgetary Capital Expenditure,
1978/79-1982 (N millions).                                     51
5.6           Financing of the Overall Budget Deficit,
1978/79-1982 (N millions).                                     52
5.7           Derivation of Domestic Deficit, 1978/79-1982
(N millions).                                                  53
Monetary Statistics
6.1           Monetary Survey, 1974-81, End of Period
(N millions).                                                  54
6.2           Summary Accounts of the Central Bank, 1974-1981
End of Period (N millions).                                     55
6.3           Summary Accounts of the Commercial Banks, 1974-1981,
End of Period (N millions).                                     56
6.4           Banking System Credit to the Economy, 1970-81
(N millions, end of period).                                    57
6.5           Loans and Advances of Commercial and Merchant Banks
by Type of Securities, (N millions, end of period).             58
6.6           Maturity Patterns of Commercial Banks Loans (%).                 59
6.7           Loans and Advances of Commercial and Merchant Banks
by Maturity (N millions, end of period).                        60
6.8           Investment Portfolio of Insurance Companies
(N millions).                                                   61
6.9            Size of the Nigerian Issue Market Industrial
Securities Issued (1961-80).                                    62
6.10          Number and Value of Transactions of Lagos Stock
Exchange.                                                       63



- 32 -
Table No.                             Heading                            Page No.
Production Indices of Major Economic Sectors
7.1           Index of Major Crops Production, 1976/7-1980.                  64
7.2           Index of Industrial Production, 1970-81.                       65
7.3           Production Index of Selected Manufaturing Products,
1977-81.                                                      66
7.4           Basic Industrial Indicators for Selected Nigerian
Manufacturing Establishments, 1973-77.                        67
Prices
8.1           Composite Consumer Price Index Rural and Urban
Centers, 1973-81.                                             68
8.2           Annual Rate of Inflation (%) 1976-81                           69
8.3           Average Prices of Selected Domestic Staple Food
Crops in Selected States in Nigeria, (N per tonne).            70
8.4           Indices of Average Weekly Prices (c.i.f.) in London
of Nigeria's Major Agricultural Export Commodities,
1974 = 100).                                                  71
8.5           Purchases and Prices of Oil Palm Produce, 1971-80.              72
8.6           Purchases and Prices of Cocoa, 1970-80.                         73
8.7           Purchases and Price of Cotton, 1960-80.                         74
8.8           Purchases and Prices of Groundnuts, 1960-80.                    75
8.9           Purchases and Prices of Rubber 1977-80.                         76
8.10          Guaranteed Minimum Prices of Food Crops (N per ton).            77
8.11          Commodity Board's Operational Schedule and Producer
Prices, 1977/78-1980/81 (N per ton unless stated
otherwise).                                                    78
Oil
9.1           Oil Sector Statistics.                                          79



Table 1.l    DISTRIBUTION OF THE POPULATION OF NIGERIA BY AGE AND SEX
Age            Population mid 1980-(thousands)                Percent Distribution                Sex
Group           Males       Females        Total            Males    Females       Total          Ratio
0-4           8376.4        8317.9      16694.3             20.0       19.4        19.7          100.7
5-9           6482.1        6486.2      12968.3             15.5       15.1        15.3           99.9
10-14          5291.4        5315.0      10606.4             12.6       12.4        12.5           99.6
15-19          4355.0        4395.2        8750.2            10.4       10.3        10.3           99.1
20-24          3540.0        3607.6        7147.6             8.4        8.4         8.4           98.1
25-29          2882.5        2964.7        5847.2             6.9        6.9         6.9           97.2
30-34          2416.7        2494.1        4910.8             5.8        5.8         5.8           96.9
35-39          2042.0        2112.5        4154.5             4.9        4.9         4.9           96.7
40-44          1688.8        1759.3        3448.1             4.0        4.1         4.1           96.0
45-49          1367.9        1444.2        2812.1             3.3        3.4         3.3           94.7
50-54          1090.0        1172.2        2262.2             2.6        2.7         2.7           93.0
55-59           846.3         933.4        1779.7             2.0        2.2         2.1           90.7
60-64           612.5         700.6        1313.1             1.5        1.6         1.5           87.4
65-69           423.7         503.9         927.6             1.0        1.2         1.1           84.1
70-74           271.0         336.6         607.6              .6         .8          .7           80.5
75+             213.3         288.6         501.9              .5         .7          .6           73.9
Total         41899.6       42832.0       84731.6           100.0      100.0       100.0           97.8
Figures may not add exactly to totals, due to rounding.
Source:  World Bank population projection for Nigeria:  Population and Human Resources Division, 1980.
(Distribution by age and sex for 1980 taken from UN population projection for Nigeria, 1979).



Table 2.1: GROSS DOMESIIC PRODUCT BY INDUSTRIAL ORIGIN AT CURRENT PRICES
(Millions of Naira)
1973      1974       1975       1976       1977       1978       1979       1980        1981
Agriculture                    3,372.0   4,942.0   5,873.0   G,784.0   8,073.0   8.339.0   8.981.0   9,620.0  10,137.0
Mininq & Quarrying              2,020.0   6,087.0   4,668.0   6,797.0   7.905.0   8,416.0  11,339.0  11,613.0   8,996.0
-Cr-uAde Petroleum              1,823.0   5,839.0   4,278.0   6,106.0   7,072.0   7,568.0  10,479.0  10,734.0   8,102.0
-Other Minings                    197.0     248.0      390.0      691.0      833.0      848.0      860.0      879.0      894.0
Manufacturing                     497.0      661.0   1,170.0   1,4fi4.0   1.555.0   1,785.0   2,037.0   2.354.0   2,648.0
Utilities                          45.0       54.0       63.0       76.0      99.0       128.0      161.0     204.0       262.0
Building & Construction         1,123.0   1,316.0   1,815.0   2,606.0   2,991.0   3,077.0   3,192.0   3,671,0   4,002.0
Transport & Comrnunication        445.0      511.0     674.0      852.0   1.039.0   1,211.0   1,447.0   1,763.0   2,129.0
Wholesale & Retail Trade       2,197.0   3,021.0   4,329.0   5,502.0   G,772.0   7,021.0   8,726.0   9,617.0  10,450.0
Ilousing                          626.0      751.0      871.0   1,011.0   1,081.0   1,136.0   1,217.0   1,310.0   1,398.0
Othler Servires                   234.0      411.0     659.0      733.0      860.0      990.0   1,09101   1,189.0   1,295.0
Government Services               6650       898.0   1,353.0   1,493.0   1,677.0   1,558.0   1,748.0   1,938.0   2,132.0
GDP at Factor Csst             11,224.0  18,652.0  21,475.0  27,318.0  32.052.0  33,661.0  39.939.0  43,279.0  43,449.0
Indirect Taxes                    208.0     216.0      250.0      336G.0     368.0      421.0      536.0      607.0      67e.0
GDP at Market Prices           11,432.0  18,868.0  21,725.0  27,654.0  32.420.0  34,082.0  40,.475.0   43,88G.0  44.127.0
Memo Items
Industry                        1,665.0   2,031.0   3,048.0   4,146.0   4,645.0   4,990.0   5,390.0   6,229.0   6,912.0
Servvices                      4,167.0   5,592.0   7,886.0   9,591.0  11,429.0  11,916.0  14,229.0  15,817.0  17,404.0
Non-oil GDP                    9,401.0  12,813.0  17,197.0  21,212.0  24.980.0  26,093.0  29,4GO.0  32,545.0  35,347.0
Traded-Goods                   5,889.0  11,690.0  11,711.0  15,045.0  17,533.0  18,540.0  22,357.0  23,587.0  21,781.0
Non-traded Goods               5,335.0   6,962.0   9,764.0  12,273.0  14,519.0  15,121.0  17,582.0  19,692.0  21,668.0
Source: Federal Office of Statistics.
/a Data up to 1979 are for fiscal years. For instance 1973 refers to fiscal year 1973/74 which was from
April 1973 to March 1974.   Data may overlap between 1979 and 1980 due to change from fiscal to
calender year.
/b Estimates.
03/01/3



Table 2.2. GROSS DOMESTIC r'ROOUCT EBY INDUSTRIAL ORIGIN AT CONSTANT 1977/78 PRICE
(Millions of Naira)
1973      1974       1975       1976      1977       1978       1979      1980       1981
-   - - -   - - - -   - - - - -   - --_- - - - - - - - - - - - - - - - - - - - - -. -   -   - - .- - -. - - -   - - - - - - - - - - - - - - - - - - - - - - - - -
Agriculture                    7,708.0   8,475.0   7,640.0   7,596.0   8,073.0   7,464.0   7,284.0   7,148.0   6.9710
Mining & Duarrying             6,435.0   7,967.0   6,277.0   7,69G.0   7,905.0   7,241.0   8,271.0   7,658.0   5,444.0
-Crude Petroleum              6,079.0   7,592.0   5,873.0   6,979.0   7,072.0   6.449.0   7,513.0   6,915.0   4,720.0
-Other Minings                  356.0      375.0      404.0      717.0     833.0      792.0      758.0      743.0     724.0
Manufacturincj                   993.0     960.0   1,187.0   1,464.0   1,555.0   1,778.0   1.909.0   2,245.0   2,508.0
UtIities                         78.0      79.0       86.0       85.0      99.0      116.0      135.0      156.0      185.0
Buildino& Construction        1,921.0   1,936.0   1,932.0   2,561.0   2,991.0   2,876.0   2,779.0   3,056.0   3,204.0
transport & Communication       920.0      927.0      964.0   1,006.0   1,039.0   1,103.0   1,184.0   1,311.0   1,458.0
Wholesale& Retail Trade        4,702.0   5,011.0   5,719.0  63,132.0   6,772.0   6,204.0   6,912.0   6,929.0   6,920.0
Housing                          858.0     999.0   1,047.0   1,066.0   1,081.0   1.078.0   1,077.0   1,092.0   1,106.0
Other 'Services                  346.0     546.0      739.0      771.0     860.0      934.0      971.0   1,014.0   1,056.0
Government Services              889.0     943.0   1,581.0   1,641.0   1.677. 0   1,441.0   1,511.0   1,565.0   1,618.0
GOP at Factor Cost            24,850.0  27,843.0  27,172.0  30,0i8.0  32,052.0  30,235.0  32,033.0  32,174.0  30,470.0
Indirect Taxes                   438.0     411.0      358.0      387.0     368.0      384.0      398.0      407.0      411.0
GDP at Mar-ket Prices         25,288.0  28,254.0  27,530.0  30,405.0  32,420.0  30,619.0  32,431.0  32,581.0  30,881.0
Memo I tems
Indusrty                      2,992.0   2,975.0   3,205.0   4,110.0   4,645.0   4,770.0   4,823.0   5,457.0   5,897.0
Services                       7,715.0   8,426.0  10,050.0  10,616.0  11,429.0  10,760.0  11,655.0  11,911.0  12,158.0
Non-oil GDP                   18,771.0  20,251.0  21,299.0  23,039.0  24,980.0  23,786.0  24,520.0  25,259.0  25,750.0
Traded Goods                  15,136.0  17,402.0  15,104.0  16,756.0  17,533.0  16,483.0  17.464.0  17,051.0  14,923.0
Non-traded Goods               9,714.0  10,441.0  12,068.0  13,262.0  14,519.0  13,752.0  14,569.0  15,123.0  15,547.0
SOURCE: Federal Office of Statistics.
a. Data may overlap hetween 1979 and 1980 due to change from fiscal
to calender year.
b. Estimates.
WAIDA



Table 2.3: GOP GROWTH RATES BY INDUSIRIAL ORIGIN
(Percent)
G R O W T H R A T E S
1973       1974       1975       1976       1977        1978       1979       1980        1981
Agriculture                          8.9       10.0       -9.9        -0.6        6.3       -7.5       -2.4        -1.9       -2.5
Mining & Quarrying                  -8.3       23.8      -21.2       22.6         2.7       -8.4       14.2        -7.4      -28.9
-Crude Petroleum                    -7.9       24.9      -22.6       18.8         1.3       -8.8       16.5       -8.0       -31.7
-Other Minings                    -14.2         5.3        7 .7      77.5        16.2       -4.9       -4.3        -2.0       -2.6
Manufacturing                       11.3       -3.3       23.6       23.3         6.2       14.3        7.4        17.6       11.7
Utilities                           81.4        1.3        8.9        -1.2       16.5       17.2       16.4        15.6       18.6
Building & Construction             51.9        0.8       -0.2       32.6        16.8       -3.8       -3.4        10.0        4.8
Transport & Communication           21.5        0.8        4.0        4.4         3.3        6.2        1.3        10.7       11.2
Wholesale 8 Retail Trade             0.4        6.6       14.1        7.2        10.4       -8.4       11.4         0.2       -0.1
Housing                              0.0       16.4        4.8         1.8        1.4       -0.3       -0.1         1.4        1.3
Otl-her Seivices                     0.0       57.8       35.3        4.3        11.5        8.6        '1.0        4.4        4.1
Government Services                -12.6        6.1       G7.7        3.8         2.2      -14.1        4 q         3.6(3      3.4
GDP at Factor Cost                   9.2       12.0       -2.4        10.5        6.8       -5.7        5.9        0.4        -5.3
Inrdirer:t Taxes                    -6.2       -6.2      -12.9        8.1       -4.9         4.3        3.tj        2.3        1.0
GDr at Market Prices                 8.9       11,7       --2.6       10.4i       6.6       -5.6        5.9         0.5       -5.2
MemIO I tems
Indusrtv                           36.0        -0.6        7.7       28.2        13.0        2.7        1.1        13.1        8.1
Services                            19.5        9.2       19.3        5.fi       7.7        -5.9        8.3        2.2         2.1
Non-oil GDP                         16.2        7.9        5.2        8.2         8.4       -4.8        3.1         3.0        1.9
Traded Goods                         1.0       15.0      -13.2        10.9        4.6       -6.0        (3 .0     -2.4       -12.5
Non-traded Goods                    25.1        7.5       15.6        9.9         9.5       -5.3        5.9         3.8        2.8
SrURCE:  Federal Office nl Statistics.
a. Data may overlap betwhjeen 1979 and 1980 due to the change from
fiscal to calendeir year.
b. Estimates.
WA IDA



Table 2.4: GROSS DOMESIIC PRODUCT IMPLICIT DEFLATORS
(1977/78=100)
1973       1974       1975       1976       1977        1978       1979       1980        1981
Agriculture                         43.7       58.3       76.9       89.3       100.0      111.7      123.3       134.6      145.4
Mining & Quarrying                  31.4       76.4       74 4       88.3       100.0       il6.2     137.1       151.6      165.2
-Crude Petroleum                   30.0        76.9       72.8       87.5      100.0       117.4      139.5      155.2       171.7
--other Minings                    55.3        66.1       96.5       96. 4     100.0       107.1      113.5      118.3       123.5
Manufacturing                       50.1       68.9       98.6      100.0      100.0       100.4      106.7       104.9      105.6
Utilities                           57.7       68.4       73.3       89.4       100.0      110.3      119.3       130.8      141.6
Ruilding & Construction             58.5       68.0       93.9      101.8       100.0      107.0      114 9       120.1      124.9
Vi-ansport & Commnunicationi       48.4        55.1       69.9       84.7      100.0       109.8      122.2      134.5       146.0
Wholesale 8 Retail Trade            46.7       60.3       75.7       89.7       100.0      113.2      126.2       138.8      151.0
I lnrsing                           73.0       75.2       83.2       94.8       100.0      105.4      113.0       120.0      126.4
Other Services                      67.6       75.3       89.2       95.1       100.0      106.0      112.4       117.3      122.6
Gnvo-riiine.it Servicos             74.8       95.2       85.G       91.0       100.0      108.1      115.7       123.8      131.8
GDP at Factor Cost                  45.2       G7.0       79.0       91.0       100.0      111.3      124.7       134.5      142.6
Indirect 'axes                     47.5        52.6       69.8       86.8      100.0       109.6      134 7      149.1       165.0
CDP at Market Prices                45.2       66.8       78.9       91.0       100.0      111.3      124 8       134.7      142.9
Memo I tems
Inciustry                          55.6        68.3       95.1      100.9      100.0       104.6      111.8      114.1       117.2
Services                            54.0       66.4       78.5       90.3       100.0      110.7      122.1       132.8      143.1
Non-oil GDP                         50.1       G3.3       80.7       92.1       100.0      109.7      120.1       128.8      137.3
Traded Goods                        38.9       67.2       77.5       89.8       100.0      112.5      128.0       138.3      146.0
Notn-tracied Goods                  54.9       66.7       80.9       92.5       100.0      110.0      120.7       130.2      139.4
SOURCE:  Federal Office of Statistics.
a. Data may overlap between 1979 and 1980 due to thie change
from fiscal to calender year.
h. Estiniates.
WAlDA
08/0I /93



Table 2.55:GROSS DOMESTIC EXPENDITURES AT CURRENT PRICES
(Millions of Naira)
1973      1974      1975      1976      1977      1978      1979/a    1980/b    1981/b
Exports of Goods & NFS       2,467.0   6,244.0   5,323.0   6,593.0   8,520.0   7,189.0  10,726.0  13,531.0  10,970.0
Imports of Goods & NFS       1,806.0   2,743.0   5,031.0   6,573.0   6,703.0   9,260.0   9,213.0  11,326.0  13,773.0
Gross Domestic Investment    2,615.0   3,168.0   5,514.0   8,576.0   9,922.0   9,886.0   9,580.0  11,566.0  12,951.0
-Fixed                       2,505.0   2,956.0   5,020.0   8,107.0   9,421.0   9,386.0   9.080.0  10,976*.0  12,278.0
-Change in Stocks              109.0     212.0     494.0     469.0     501.0     500.0     500.0      590.0     673.0
Consurnption                 8,156.0  12,199.0  15,919.0  19,058.0  22,681.0  26,267.0  29,382.0  30,116.0  33,980.0
-Public                        976.0   1,312.0   2,236.0   2,585.0   3,826.0   3,472.0   3,850.0   4,780.0   5,400.0
-Private                     7,180.0  10,887.0  13,683.0  16,473.0  18,855.0  22,795.0    5,532.025,336.0  28,580.0
GDP at Market Prices        11,432.0  18,868.0  21.725.0  27,654.0  32,420.0  34,082.0  40,475.0  43,887.0  44,128.0
MetTo I temns
Gross Domestic Savings       3,276.0   6,669.0   5,006.0   8,596.0   9,739.0   7,815.0  11,093.0  13,771.0  10.148.0
Net Factor Income             -570.0   -370.0    -173.0    -189.0   -346.0    -145.0    -270.0    -277.0    -259.0            X
Net Transfers                  -35:0     -62.0     -78.0     -89.0    -119.0    -171.0    -234.0    -292.0    -357.0
Gross National Savings       2,671.0   6,237.0   5,555.0   8,318.0   9,274.0   7,499.0  10,589.0  13,202.0   9,532.0           l
Gross National Product      10,862.0  18,498.0  21,552.0  27,465.0  32,074.0  33,937.0  40,205.0  43,610.0  43,869.0
…-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -_ _-- - - - -_ __- -_-- - -_ _ _ _ _ _ _ _ __- -_ _- - _ _ _ _ _ _
SOURCE: Federal Office of Statistics.
/a. Data may overlap between 1979 and 1980 due to the change
-from fiscal to calender year.
/b. Estimates.
WACPIA
08/11/82



Table 2.6: GROSS DOMESTIC EXPENDITURES AT CONSTANT 1977/78 PRICES
(Millions of Naira)
1973      1974       1975      1976       1977       1978      1979L         1980/b    igsi/b
Expov'ts of Goods & NFS       8,626.0   8,324.0   6,894.0   7,692.0   8,520.0   7,334.0   8,421.0   8.233.0   5,200.0
Imports of Goods & NFS        2,720.0   3,386.0   5.547..0   7,271.0   8,703.0   8,010.0   6,840.0   7,420.0   8.000.0
Gross Domestic Investment    4,298.0   4,409.0   6,628.0   8,871.0   9,922.0   7,295.0   6.074.0   7,025.0   7.649.0
-Fixed                        4,129.0   4,097.0   5,985.0   8,373.0   9,421.0   6,83i.0   5,646.0   6,557.0   7,055.0
-Change in Stocks                169.0     312.0      643.0     498.0      501.0      464.0     428.0      468.0      594.0
Consumption                   15,0a4.0  18,907.0  19,555.0  21,113.0  22,681.0  24,000.0  24,777.0  24,743.0  26.032.0
-Public                        1,877.0   2,334.0   3,194.0   S,133.0   3,826.0   3,157.0   3,157.0   3.600.0   4.200.0
-Private                      13,207.0  16,573.0  16,361.0  17,980.0  18,855.0  20,843.0  21.620.0  21.143.0  21,832.0
GDP at XIarket Prices        25,288.0  28.254.0  27,530.0  30,405.0  32,420.0  30.619.0  32.432.0  32.581.0  30,881.0
Memo Items
Gross Domestic Savings        10,204.0   9,347.0   7,975.0   9,292.0   9s739.0   6,619.0   7,655.0   7,838.0   4,849.0
tJet Factor Income              -858.0    -459.0    -191.0    -209.0    -346.0    -125.0    -200.0    -179.0    -146.0
Net Transfers                    -53.0     -76.0      -86.0      -98.0    -119.0    -149.0    -174.0    -185.0    -202.0
Gross National Savirngs       9.293.0   8.812.0   7,698.0   8,985.0   9,274.0   6,345.0   7,281.0   7,474.0   4,501.0
Gross Natiosal Product        24,430.0  27,795.0  27,339.0  30,196.0  32,074.0  30,494.0  32,232.0  32.402.0  30,735.0
Source: Federal Office of Statistics.
/a. Data may overlap between 1979 and 1980 due to the change from fiscal to calender year.
/b. Estimates.
WACPIA
08/1 1/82



Table 3.1: BALANCE OF PAYMENTS
(Millions of Naira)
1974     1975      1976      1977       1978      1979       1980 a/       1981 a/      1982 b/
Exports of Goods & Nfs             6,244      5,323   6,593    8,520         7,189   10,726       13,531       10,970         9,021
Oil                              5,671      4,766   5,918    7,454         6,005    9,437       12,247       10,280        8,584
Non-oil                            435        350      425       523         627       670         554          189           121
NFS                                138        207      250       543         557       619         730          501           316
Imports of Goods & Nfs             2,743      5,031   6,573    8,703         9,260    9,213       11,326       13,773        12,773
Goods                            1,666      3,629   5,050    6,423         7,374    7,139        8,716       10,813       11,336
NFS                              1,077      1,402   1,523    2,280         1,886    2,074        2,610        2,960         1,437
Resource Gap                       3,501        292       20      -183      -2,071    1,513        2,205       -2,803       -3,752
Factor Service                      -372       -173    -189      -346         -145      -270        -277         -259          -939
Interest                            24        283      241       209         156     -149          202          431         -437
Other Investment Income             -396       -456    -430       -555        -301      -121        -479         -690         -502
Transfers (net)                      -62        -78      -89      -119        -171      -234        -315         -357          -251
Balance on Current Account         3,067         41    -258      -648      -2,387    1,009         1,613       -3,419       -4,942                       1
Direct Foreign Investment            182        252      213       246         134       184         186           18           241                      1
Net MLT Borrowing                     75         45       20        22         896       593         545          481           493
Disbursements                      108         66       38        61         911       616         622          839          814
Amortization                       -33        -21      -18      -39          -15       -23         -77         =358         -321
Other Capital (net)                 -263       -156    -283        -84         -96         6          44          -24           304 c/
Other Items d/                        24        -15       37        31         -54       234         261          -23         -345
Increase in Reserves (-) e/    -3,085          -167      271       433      1,507   -2,026       -2,649         2,967        1,512
Net Reserves                       3,500      3,667   3,396    2,963         1,456    3,482        5,131        3,164        1,652
Source: Central Bank of Nigeria.
a/ Official estimates.
b/ Staff estimates.
c/ Includes commercial borrowing and trade arrears.
d/ Residual.
e/ Change in assets.
WACP1A
7/27/83



Table 3.2: BALANCE OF PAYMENTS
(Millions of US Dollars) a/
1974      1975    1976    1977          1978       1979      1980 b/       1981 b/    1982 c/
Exports of Goods & Nfs            9,930      8,649  10,522   13,218        11,319   17,796      24,758        17,872       13,400
Oil                             9,019      7,744   9,445   11,564        9,455   15,657       22,408        16,748       12,751
Non-oil                           692        569      678       811         987    1,112        1,014          308          179
NFS                               219        336      399       842         877    1,027        1,336          816          470
Imports of Goods & NFS            4,362      8,174  10,490   13,502        14,580   15,285      20,723        22,439       18,973
Goods                           2,650      5,896   8,059    9,965        11,610   11,844      15,948        17,617       16,838
NFS                             1,713      2,278   2,431    3,537         2,970    3,441       4,776         4,822        2,135
Resource Gap                      5,568        475       32      -284      -3,261    2,511        4,035       -4,567       -5,573
Factor Service                     -592       -281    -302       -537        -228     -448         -507         -422       -1,395
Interest                           38        460      385       324         246     -247          370          702         -649
Other Investment Income          -630       -741    -686      -861        -474      -201        -876       -1,124          -746
Transfers (net)                     -99       -127    -142       -185        -269      -388        -576         -582         -373
Balance of Current Account        4,877         67    -412   -1,006       -3,758    1,675         2,953       -5,570       -7,341
Direct Foreign Investment            289        409     340       382         211       305         340'          29          358
Net MLT Borrowing                    119        73       32        34       1,411       984         997          784          732
Disbursements                     172        107       61        95       1,434    1,022        1,138        1,367        1,209
Amortization                      -52        -34      -29       -61         -24       -38        -141         -583         -477
Other MLT (net)                  -418       -253    -452       -130        -151        10          81          -39         -477
Other Capital (net)                   38       -24       59        48         -85       243         478          -38         4490 e/
Error and Omissions                  145      -288       27      -276          27       446        -162        -1506         -513
Increase in Reserves (-) d/       -5050          16     406       948        2345   -3,663      -4,687         6,340        2,248
Net Reserves                      5,602      5,586   5,180    4,232         1,877    5,548       10,235        3,895        1,647
Source: Central Bank of Nigeria
a/ Totals may not add up due to rounding.
b/ Official estimates.
c/ Staff estimates.
d/ Change in assets.
eI Includes commercial borrowing and trade arrears.



Table 3.3: EXPORTS OF MAJOR COMMODITIES
1973      1974       1975       1976       1977       1978       1979        198/a    198i/a
1. Petroleum
Value                  2,006.0   5,671.0   4.766.0   5,918.0   7,454.0   6,005.0   9,437.0  12,247.0  10,280.0
Volume               94,302.2  96.437.0  85,543.4  95,872.0 118.292.0  92,146.0 102,337.0               n.a.        n.a.
2. Cocoa
Value                    112.4      159.0      18t.0      218.9      311.1      377.9      432.2      311.8       R4.5
Volume                   213.9      194.0      174.7      218.9      167.5      191.7      217.8      157.1        n.a.
3. Palm Kernels
Value                     18.9       43.7       18.5       27.0       32.6       12.7       t1.8       11.5        10.0
Volume                   137.5      185.6      171.4      272.0      186.0       56.8       50.9       49.6         n.J.
4. Rubber(Natural)
Value                     19.4       33.2       15.2       14.4       11.1       12.6       1-3.0      11.8        18.7
Volume                    49.4       61.3       60.9       34.0       27.7       30.9       34.2       31.0         n.a.
5.  Groundnuts
Value                     45.5        6.8        1.0        0.2        0.0        0.0        0.0        0.0        0.0
Volume                   198.7       30.3        0.0       '1.6        0.0        0.0        0.0        0.0        0.0
6.  Cocoa Butter
Value                     15.0       21.0       20.4       14.5       38.5       17.6       20.8       19.8        14.7
Volume                    11.1       11.1        9.3        5.9        7.7        4.2        5.0        4.8         n.a.          4-
7.  Tin
Value                     15.5       26.4       20.4       15.5       13.3        9.4       10.8        9.8        10.4
Volume                     5.3        5.8        4.7        3.4        1.7        1.3        1.5        1.4         n.a.
8. Miscellaneous
Value                    136.3      144.9       93.5      134.5      116.4      196.8      181.4      189.3       50.7
Volutme.
Volume-~9                      * .        ..          ..        .......*
Value of Total Exports    2,369.0   6,106.0   5,116.0   6,343.0   7,977.0   6,632.0  10,107.0  12,801.0  10.469.0
SOURCE:  Central Bank of Nigeria.
Value: Mlliions of Naira.
Volume: Thousands of Tons.
n.a.: Not Available.
/a. Estimates.
WACPIA
08/20/82



Table 3.4: IMPORTS BY END-USE
(Millions of Nalra)
1973      1974       1975       1976      1977       1978       1979       198O/a    1981 /a
Consumer Goods                       415.8      485.7   1,105.8   1.540.3   1,843.5   2,137.6   2.013.2   3,451.5   4,801.0
Durable                            114.5      129.4     337.3      459.5      538.0     625.9      592.6      775.8   i.319.2
Non-durable                        301.2      356.3     768.5   1.080.7   1,305.5   1,511.7   1.420.7   2,675.8   3,481.8
Capital Goods & Raw Materials        778.9   1,170.1   2,512.0   3,494.7   4,573.1   5,228.0   5,118.6   5,255.7   6,001.2
Capital Goods                      457.1      620.0   1,533.9   2,206.9   3,087.1   3,509.9   3.469.5   2,919.8   3.362.8
Raw Materials                      321.8      550.2     978.1   1,287.9   1,485.9   1,718.1   1.649.1   2,335.9   2,638.4
Miscellaneous                          8.3       10.2       11.2       15.0       6.4        8.4        7.1        8.8       10.8
Total                              1,203.0   1,666.0   3,629.0   5,050.0   6,423.0   7,374.0   7,138.9   8,716.0  10,813.0
SOURCE:  Federal Office of Statistics and Central Bank of Nigeria.
/a. Estimates.                                                                                                                              >
WACPRIA
08/20/82



Table 3.5: COMPOSITION OF IMPORTS BY COMMODITY SECTIONS
(Millions of Naira)
1973       1974       1975       1976       1977       1978      1979       1980/a    1981/b
Food & Live Animals                 115.4      141.0      283.0      425.0      604.9      831.0   1,177.5       890.5    1,235.7
Beverage & Tobacco                    5.0        8.7       46.8       62.9      121.5       64.2       54.9        61.2        79.4
Crude Materials, inedible            61.0       70.6       77.0       77.1       98.7      110.9      149.0       163.7       164.2
Mineral  Fuels & Lubricants          12.9       53.0       97.8      171.9      117.1      158.6      227.9       219.4       294.4
Oil & Fats                            1.3        3.4        8.7       24.3       42.8       66.6      108.0        70.2        87.6
Chemicals                           127.8      182.9      325.2      390.1      454.0      538.4      712.9      667.0        806.5
Manufactured Goods                  310.3      501.0      983.7   1,116.4   1,425.7   1,680.4   1,589.6   1,886.8    2,197.0
Machinery & Transp. Equipment    470.8         585.7   1,524.2   2,402.0   3,085.2   3,258.0   2,646.5   4,133.1    5,240.4
Miscell. Mnf. Articles               90.2      109.1      271.5      365.3      464.8      603.5      457.1      605.5        686.0
Miscell. Transactions                 8.2       10.1       11.2       15.0        8.2       12.5        15.8       18.4        21.9
Total:  All Sections              1,203.0   1,666.0   3,629.0   5,050.0   6,423.0   7,374.0   7,139.0   8,716.0   10,813.0
Source: Central Bank of Nigeria.
/a . Estimates.
WACPIA
08/20/82



Table 3.6:   F*change Rate Movements, December 1973-June 1982
(Monthly averges.)
U.S. dollar/Naira      Pound stering/Nara    Notinal effeetIve rate lf  Real effective rate 11
Rate    Index 2/       Rate    Index 2/                Index 2/                     Index 2/
1973 December                1.5200    100.00       0.6555    100.00                    100.00                      100.00
1974 December                1.6229   '106.77       0.6842    104.38                    105.90                       100.99
1975 December                1.5980    105.13       0.7656    116.80                    111.02                       134.58
1976 December                1.5845    104.25       0.8729    133.17                    116.82                       144.29
1977 December                1.5352    101.00       0.8414     128.36                   104.35                       156.45
1978 December                1.5444    101.61       0.7851    119.77                     95.56                       147.92
1979 March                   1.5715    103.39       0.7851     119.77                    96.67                       149.22
June                   1.6726    110.04        0.7830    120.98                    101.62                      160.P7
September              1.7396    114.45        0.7891     120.38                   104.22                      162.47
December               1.7528    115.32        0.8089    123.40                    104.72                      161.85
298) Karch                   1.7884    117.66       0.8009    122.18                    109.73                       168.13
June                   1.8372    120.87        0.7850    119.76                    107.39                      161.45
September              1.8718    123.15        0.7850    119.76                    109.23                      172.79
December               1.8452    121.40        0.7P50    119.760                   112.54                      177.15                               1
1981 January                 1.8737    123.27       0.7850    119.76                    114.02                       187.12
February               1.8282    120.28        0.7P50    119.76                    115.99                      192.31
March                  1.7468    114.92        0.7850   119.76                     112.08                      183.59
April                  1.7328    114.00        0.7t50    119.76                    113.33                      188.06
May                    1.6683    109.75        0.7850    119.76                    113.80                      194.07
June                   1.5629    102.82        0.7850    119.76                    110.63                      188.40
July                   1.5238    100.28        0.7955    121.36                    110.84                      193.02
August                 1.4970      98.49       o.E144     124.24                   109.03                      189.96
September              1.4989      98.61       0.8172    124.66                    108.93                      187.77
October                1.5131      99.46       0.8219     125.30                   108.46                      185.27
November               1.5418    101.93        0.8223    125.44                    110.84                      187.22
December               1.5731    103.49        0.8219    125.38                    111.06                      186.99
1982 January                 1.5534    102.12       0.8263    126.05
February               1.5246    100.30        0.8246    125.79
March                  1.5054      99.v3       0.8333    127.12
April                  1.4803      97.38       0.8365    127.61                       ---                         ---
May                    1.4878      97.88       0.82e. 8       IU.a -_-
June 3/                1.'4n59     97.99       0.8297     126.58
Sources:  Data provided by the Central Bank of Nigeria; and IMF calculations.
I/  Irrport-veighted.
2/ December 1973 - 100.
3/ Average of the first 14 days.



Table 4.1: NIGERIA
EXTERNAL PUBLIC DEBT OUTSTANDING INClUDING UNDISBURSED AS OF DFC. 31, 1982
DEBT REPAYABLE IN FOREIGN CURRENCY ANO GOODS
(IN THOUSANDS OF U.S. DOLLARS)
D E B T O U T S T A N D I N G * I N A R R E A R S
TYPE OF CREDITOR                             ----------------------------------- -------__---------
CREDITOR COUNTRY                           DISBURSED :UNDISBURSED:   TOTAL       PRINCIPAL    INTEREST
SUPPLIERS CREDITS
FRANCE                                           2,131           -        2,131            -
ITALY                                               89           -           89           -
UNITED KINGDOM                                     457           -          457            -
UNITED STATES                                        -       8,810        8,810            -
TOTAL SUPPLIERS CREDITS                            2,677       8,810       11,487            -
FINANCIAL INSTITUTIONS
AUSTRIA                                              -      89,891       89,891            -
FRANCE                                          21,598     140.517      162.115            -          86
GERMANY, FED.REP. OF                            97,992     314,753      412.745            -       2,499
SPAIN                                           18.318           -       18.318            -           -
SWEDEN                                               -      68,545       68,545            -
SWITZERLAND                                          -      14,969       14,969            -
UNITED KINGDOM                                 126,916      76,195      203,111            -
UNITED STATES                                        -       3,375        3.375            -
MULTIPLE LENDERS                            4.673,204   6,375.619  11.048,823              -      18.181
TOTAL FINANCIAL INSTITUTIONS                   4,938,028   7,083,864  12,021,892             -      20,766
MULTILATERAL LOANS
AFRICAN DEV. BANK                                2.529       2,920        5,449            1          53
EUROPEAN INVEST BANK                            26.089      22,256       48,345            -           -
IBRD                                          674.036      933,836   1,607.872            -
IDA                                             36.663           -      36,663             -           -
TOTAL MULTILATERAL LOANS                         739,317     959,012   1,698,329             1          53
BILATERAL LOANS
CANADA                                          39,039       1,481       40,520         407            -
CZECHOSLOVAKIA                                       -      93,950       93,950            -
DENMARK                                          1.729           -        1.729            -           -
GERMANY. FED.REP. OF                           131.250      94.503     225,753        2,337          710
HUNGARY                                         11,036     181,406      192,442            -           -
ITALY                                            3,877           -        3,877           -            -
UJAPAN                                          64.561      71,927      136,488         732          545
NETHERLANDS                                     14,865       6.911       21.776         419            -
NORWAY                                          25,020           -       25,020            -
POLAND                                               -      30.400       30.400            -
UNITED KINGDOM                                  32,584         527       33,111         394
UNITED STATES                                   80,507      76,135      156,642            -
USSR                                               249       3,436        3,685            -           -
TOTAL BILATERAL LOANS                            404,717     560,676      965,393       4,289        1,255
…--  - - - -- - -- - -- - -- - -- - -              -- - _- -- - - -- - - _ - _ _ - _ - _ _ _ - _ _ - _ _ _ _ -____
TOTAL EXTERNAL PUBLIC DEBT                           6,084.739   8,612,362  14,697,101         4,290      22,074



Table 5.1:  Actual Federal and State Goverment Investment Outlays Under the Third National
Development Plan by Sector, 1975/76-1979/80
l1        1/                                     1/        1/
1975/76  1976/77  1977/78  197879-  1979/80- 1975/76  1976/77  1977/78  197e/79- 1979/80
(In billlons of nalra)                           (In per cent of total)
Economic aectora                2.0       3.7       4.5       2.9       4.1       53.8      56.5     59.9      59.0      60.6
Agriculture                   0.2       0.4      0.6        0.4       0.5        5.7       5.9      7.8       7.2       8.0
:liinnl' andi quarrying       0.3       0.6      0.4        0.1       0.1        7.6       9.3       5.5      1.4       1.4
lianufacturing                0.2       0.5       1.n       0.2       0.6        4.2       7.9      13.6      5.1       9.1
Power                         0.1       0.2      0.3        0.5       0.6        3.8       2.6       3.5     11.3       e.9
Transportation                0.9       1.4       1.7       1.2       1.6       25.6      20.6     22.2      24.6      24.5
Other                         0.2       0.7      0.5        0.5       0.6        6.7      10.2       7.2      9.4       8.8                                    i
Social sectors                  0.7       1.1       0.9       0.5       0.8       19.9      16.2      13.0      9.3      12.1                                   4-
Edtication                    0.6       0.8      0.e        0.3       0.5       16.7      12.5     10.1       5.8       7.6
Other                         0.1       0.2      0.2        0.2       0.3        3.2       3.6       3.0      3.5       4.5
Regional development            0.3       0.6       0.7        0.6      0.8        8.6       9.7      10.0     12.3      12.0
Jiousing                      0.2       0.4       0.3       0.2       0.2        4.8       5.1       3.9      4.0       3.0
Water supply                  0.1       0.2      0.2        0.1       0.3        1.8       2.6       2.4       2.5      5.0-
lkher                         0.1       0.1       0.2       0.3       0.3        2.0       2.0       3.8      5.8       4.0
General aeministration          0.6       1.2       1.3        1.0      1.0       17.7      17.7      17.1      19.4      15.3
Total 2/                   3.6       6.6      7.5        5.0       6.7      100.0    100.0    100.0    100.0    100.0
Source; Data provided by the Nigerian authoritiesa.
I/  Prelimitnary.
2/  Totals may not agree with stm of components due to roundinR.



- 48 -
Table 5.2:  Nigeria:  Planned and Actual Federal and State Government Investment
Outlay Under the Third National Development Plan and Projected
Investment Outlays Under the Fourth National Development
Plan by Sector, 1975/76-1979/80 and 1981-85
1975/76-1975/80        1981-85       1975/76-1979/80      1981-85
Revised  Actual         Proj.        Revised  Actual        Proj.
plan                                plan
(In millions of naira)             (In per cent of total)
Economic.sector                 16,600      17,187        40,381      62.8       58.4        57.5
Agriculture                    2,000       2,107         8,827       7.5        7.2        12.6
Mining and quarrying           1,500       1,407         5,409       5.7        5.0         7.7
Manufacturing                  3,200       2,570         7,812      12.1        8.7        11.1
Power                          1,400       1,721         3,106       5.3        5.8         4.4
Transportation            )    7,900       6,814        10,707      29.8   ( 23.2          15.2
Communications            )                1,779         2,000              (   6.0         2.8
Other                           600         726         2,520       2.3        2.5         3.6
Social sector                    2.900       4,048        12 2,323    10.9       13.7        17.5
Education                      2,100       2,994         7,703       7.9       10.2        11.0
Health                           800         603         3,044       3.0        2.0         4.3
Other                            ...         451.        1,576       ...        1.5         2.2
Regional development             2,900       3,114        11,370      10.9       10.6        16.2
Housing                        1,300       1,967         7,599       4.9        6.7        10.8
Water supply              )    1,600         871         3,117        6.0   (   3.0         4.4
Other                     )                  276           654              (  0.9         0.9
Administration                   4,100       5,084         6,202      15.5       17.3        8.8
Tbtal                      26,500     29,434        70a6        100.0      100.0      100.0
Source: Data provided by the Nigerian authorities.



- 49 -
Table 5.3:  FEDERAL GOVERNMENT BUDGETARY REVENUE, 1978/79-1982
(In million of Naira)
-   978/79  -1979/80-           1980 17           1981 1/   1982-_ T
(9 months) (12 months)
Federal collected revenue 2/        7,156.4  12,227.3   11,850.0        15,800.0   12,476.0   11,016.0
Taxes on net income and profits 3,557.1   6,352.0    7,270.4           9,693.8    6,921.0    6,241.0
Company income tax 3/             418.9      550.6       455.7         607.6       537.1       550.0
Petroleum profits tax 4/        3,020.9   5,787.4    6,785.6         9,047.5.   6,336.1    5,676.0
Personal income tax                 --         2.8         3.1           4.1         3.3         --
Other                              17.3       11.2        26.0          34.6        44.5        15.0
Taxes on domestic production
and consumption                   279.2      318.6       361.5         482.0       529.4       793.0
Taxes on international trade    1,338.2        914.7       649.8         866.5    1,605.1    1,150.8
Import duties                   1,331.1      9033        6398          853.1    1,482.3    1,137.0
Export duties                       1.5        0.5         1.7           2.3         0.1         2.2
Other 5/                            5.6       11.4         8.3          11.1       122.7        11.6
Nontax revenue                    1,981.9   4,642.0    3,568.3         4,757.7    3,420.5    2,831.2
Of which:  petroleum
royalties and dividends        (1,745.2) (4,308.7)  (3,121.9)    (4,162.5)  (3,373.9)  (2,624.0)
Less share of states and local
governments                      -1,407.4  -3,336.5   -2,900.0        -3,866.7   -4,626.0   -4,298.0
Federal retained revenue            5,749.0   8,890.8    8,950.0        11,933.3    7,850.0    6,718.0
Memorandum items
Petroleum receipts                4,809.0  10,096.1    9,907.5        13,210.0    9,710.0    8,300.0
Nonpetroleum receipts             2,347.0   2,131.2    1,942.5         2,590.0    2,766.0    2,716.0
Sources: Recurrent and Capital Estimates of the Government of the Federal
Republic of Nigeria; and data provided by the Nigerian authorities.
I/  Revised estimates.
2/ Gross receipts less repayments.
3/ Includes the company income tax, back-duty penalties, surcharges on
pioneering companies, and supertax (arrears).
41  Includes an amount of N 894.6 million earmarked for capital funding of
joint venture activities by the Nigerian National Petroleum Corporation.
5/  Includes stamp duties and the capital gains tax.



- 50 -
Table 5.4:   FEDERAL GOVERNMENT BUDGETARY CURRENT EXPENDITURE, 1978/79-1982
(In millions of Naira)
1978/79   1979/80             1980 1/            1981 2/    1982 2/
(9 months) (12 months)
General services                   1,075.5   1,602.7    1,046.0         1,394.6    2,610.6    2,286.7
General administration             304.3      588.4       444.0         592.0    1,331.7    1,044.5
Defense                            590.6      775.2            )              )     725.1       660.8
Justice                             33.9       39.4       602.0)        802.6)       62.6         5.9
Police                             146.7      199.7            )              )     491.2       387.3
Community and social services        291.4      625.4       577.3         769.7       860.9       893.4
Education                          166.3      435.7       44.           590.8       543.7       549.4
Health                              78.6      101.7        53.8          71.7       119.8       155.8
Others 3/                           46.5       88.0        80.4         107.2       197.4       188.2
Economic services                    126.2     224.0        242.9         323.8       409.0       361.7
Agriculture                          3.T4    -P 775      -34.3                                      4 33.9  -7g47
Fuel and power                       4.8       10.6        92.7 4/      123.6         9.7         8.9
Manufacturing and co struction   75.1         120.4        87.1         116.1       306.1       264.5
Transportation and communication 32.9          55.5        47.1          62.8        59.3        53.9
Sonstatutory transfers to the
states                            396.9      996.9        423.5         564.6         2.0         --
Interest on public debt             423.8      449.3        600.0         800.0       555.4    1,019.9
Total                        2,313.8   3,898.3    2,889.7         3,852.7    4,437.9    4,561.7
Sources: Recurrent and Capital Estimates of the Government of the Federal Republic of
Nigeria; and data provided by the Nigerian Authorities.
1/ Actual Treasury returns.
2/ Budgetary estimates.
i Housing, water, sanitation, and recreation.
i1 Including other economic services.



- 51 -
Table 5.5: FEDERAL GOVERNMENT BUDGETARY CAPITAL EXPENDITURE AND LENDING,
1978/79-1982
(In millions of Naira)
1978/79   1979/80               1980              1981 1/   1982 1/
(9 months)  (12 months)
General services                    969.8   1,064.9        498.2          664.3    1,156.4      817.3
Defense                           613.7      622.9       242.3         323.1       594.0      447.9
Other                             356.1      442.0       255.9         341.2       562.4      370.0
Community services                  282.8      319.8       639.6         852.8    1,274.4       799.8
Housing                           129.5       68.1       251.6          342.6      469.0       174.6
Water                             150.3      191.6       369.3         492.5       710.5      562.3
Other                               3.0       60.1        13.3           17.7       94.9       62.9
Social services                     120.2      624.3       534.0         712.0       813.3      630.9
Education                          70.4      498.8       503.9         671.9       629.9      500.0
Health                             49.8      125.5        30.1           40.1       183.4     130.9
Economic services                 2,308.1   3,458.1    2,783.1         3,710.7    6,333.8   4,623.7
Agriculture                        76.5      196.9       219.1         292.1       411.9      531.4
Manufacturing, mining, and
quarrying                       257.8   1,228.4        857.4       1,143.2    3,496.3 2/2,399.5 2.1
Transport and communications  1,464.6   1,492.8    1,453.9           1,938.5    2,148.1   1,317.4
Power                             509.2      540.0       252.7         336.9       277.5      375.4
Unallocable                         551.7      641.0       685.0          913.3       700.8     801.0
Lending to the states             490.6      616.9       657.6         876.8        383.0     430.0
Other 3/                           61.1       24.1        27.4           36.5      317.8      371.0
Total                        4,232.6   6,108.1    5,139.9         6,853.1   10,278.7   7,673.3
Less amount reserved 4/                 -         -            -             -     2,873.4   2,061.7
Total                                   -          -           -             -     7,405.3   5,611.6
Sources: Recurrent and Capital Estimates of the Government of the Federal Republic of
Nigeria; and data provided by the Nigerian authorities.
1/ Budgetary estimates.
2/ Includes an amount of N 894.6 million for capital funding of joint venture activities by the
Nigerian National Petroleum Corporation.
3/ Including expenditure for the development of the Federal Capital Territory and membership
contributions, as well as lending to international financial institutions.
4/ Thirty percent of total federal capital expenditure excluding unallocable items.



- 52 -
Table 5.6:   FINANCING OF THE OVERALL BUDGET DEFICIT, 1978/79-1982
(In millions of Naira)
1978/79   1979/80               1980                 1981        1982
(9 months)  (12 months)
Federal retained revenue           5,749      8,891      8,950         11,933         7,850       6,718
Current expenditures               2,314      3,898      3,200 1/       4,267 1/      4,438       4,562
Current surpluses                  3,435      4,993      5,750          7,666         3,412       2,156
Capital expenditures and
net lending                      4,233      6,108      6,000 1/       8,000 1/      8,030 1/   5,612
Treasury clearance fund (net)    -484           314           -             -             -            -
Overall surplus or deficit (-) -1,282          -801       -250           -334        -4,618      -3,456
Financing                          1,282        801        250            334         4,618       3,456
Foreign borrowing (net)              925         93         130           173           500          500
Gross. borrowing                  (993)      (184)   ( .)              (.)           (700)       (700)
Amortization                      (-68)      (-91)                 (  C...)         (-200)      (-200)
Domestic borrowing (net)             357        708         120           161         4,110       2,956
Nonbank                            -63        901        240            320           584
Banking system                     723        -97       -140          -186          3,526
Commercial banks               (-449)   (1,052)       (155)         (207)         (-556)    (     .)
Central Bank                 (1,172)  (-1,149)    (-295)           (-393)        (4,082)    (     .)
Residual financing 2/             -303        -96         20             27             8          --
Source: Staff estimates based on data provided by the Nig;erian authorities.
1/ IMF estimates.
2/ Mostly comprising discrepancies between Treasury and Central Bank data.



- 53-
Table 5.7:    NIG'ERIA - DIRIVATION OF DOMESTIC DEFICIT
(In millions of Naira)
1978/79      1979/80      1980 1/         1981         1982
1.  Foreign Revenue                     4,766       10,096        13,211        9,710        8,300
2.  Oil profits tax                     3,021        5,787         9,048        6,336        5,676
3.  Rents and royalties                 1,745         4,309        4,163        3,374        2,624
4.  Domestic Revenue                    2,390        2,131         2,590        2,766        2,716
5.  Total revenue                       7,156       12,227        15,800       12,476       11,016
6.  Federal current expenditure         2,314        3,898        4,267         4,438        4,562
7.  Plus: 0.48 x Transfers to States   675            1,601        1,856        2,220        2,063
8.  Subtotal                            2,989         5,499        6,123        6,658        6,625
9.  Less: foreign int. payments 2/        -83           -77          -52         -100         -100
10. Less: domstic int. payments 2/    -151            -118          -202         -365         -250
11. Subtotal                            2,755        5,304        5,869        6,193         6.275
12. 0.20 x (11)                           551        1,061         1,174        1,2,59       1,255
13. Foreign expenditures (9 + 12)         634         1,138        1,226        1,339        1,355
14. Domestic expenditures (S - 13)   2,355           4,361        4,897         5,319        5,270
15. Federal capital expenditures        4,233         6,108        8,0C0        S,030        5,612
16. Plus: 0.52 x transfers to states   732            1,735        2,011        2,406        2,235
17. Subtotal                            4,965        7,843        10,011       10,436        7,847
18. Less: extern. financial oblig.    -143            -175          -224         -261         -122
19. Subtotal                            4,812        7,668        9,787        10,115        7,725
20. C.5 x (19)                          2,406        3,834         4,893        5,087        3,862
21. Foreign capital (18 + 20)           2,549        4,009         5,117        5,348        3.984
22. Domestic capital (17-21)            2,416        3,834         4,897        5,088        3,863
23. Total foreign exp. (13 + 21)        3,183        5,147         6,343        6,687        5,339
24. Total domeztic exp. (14 + 22)    4,771           8,195         9,794       10,407        9,133
25. Domestic deficit (4 - 25_          -2,381       -6,064        -7,204       -7,641       -6,417
Source: Staff estimate based on data provided by government au-thorities.
1/ On a 12-month basis.
2/ To be revised.



Table 6.1:  MONETARY SURVEY, 1974-81, END OF PERIOD
(N Million)
1974         1975         1976         1977         1978         1979          1980         1981
Foreign assets (net)                  3,500.3      3,667.4      3,395.7      2,961.6       1,453.9      3,480.2      5,604.2      2,542.2
Assets                              3,517.7      3,692.5      3,452.8      2,990.9      1,528.2       3,568.3      5,729.3      2,7t0.2
Liabilities                           -17.4        -25.1        -57.1        -29.3         -74.3        -88.2       -125.1       -168.0
Domestic credit                        -575.2      1,190.1      3,076.1      6,098.6       8,789.1      9,095.1    10,749.5    16,23i.0
Claims on Government (net)         -1,710.5       -607.9        653.0      2,634.0      4,105.0       3,678.3      3,558.7      6,625.7
Claims                              787.4      1,134.5      1,851.9      3,687.6      4,687.1      5,117.2       5,86'.3      3,258.3
Deposits                        -2,497.9    -1,742.4    -1,198.0    -1,053.6           -582.1    -1,438.9    -2,308.6    -1,631.6
Claims on private sector            1,135.3      1,798.0      2,423.1      3,464.6      4,684.1       5,413.2      7,190.8      9,654.3
Money and quasi-money                 2,371.7      4,167.3      5,731.8      7,439.2      8,087.0    10,406.3    13,851.0    15,946.0          @
Money                               1,398.5      2,594.9      3,752.6      5,184.1       5,485.3      6,704.2      8,687.8    10,150.0
of which:  State Governments    (178.7)         (561.3)      (570.9)      (763.4)      (474.9)       (486.8)      (626.4)      (213.5)
Quasi-money                           973.2      1,572.4      1,979.2      2,253.1      2,601.7       3,702.1      5,163.2      5,796.0
Capltal accounts                        106.3        144.3        184.0         237.7        311.0        381.7        456.1        583.4
SDR allocation                           34.4         33.4         33.4          36.1         56.3         8i.8         83.7        157.2
Other items (net)                       412.7        512.5        522.6      1,200.9      1,788.7       1,766.6      1,862.9      2,131.6
Sources Data provided by the Nigerian authorities



Table  6.2:         uwmyRv AccouNts or HIE CEffTRAL mam. IY74-1981, EmD or PilRIOD
(11 liIllion)
1974        1975        1976       1977        1976        1979         1950        1961
Net forelan assete                       3,452.4     3,573.7    j,283.0      2,761.7     1,340.0     3,310.5    3,442.3      2,414.0
Foreign areets                         3,453.5     3,565.9    3,293.2      2,76538     1,350.4     3,332.0     3,583.9     2,451.0
External reeerveo and securities     3,383.9    3,363.1      2,998.9     2,439.3       990.8     3,020.1     3,119.3     1,932.4
Reserve position in the Fund            25.5       153.7       244.6       269.3       308.2       227.3       257.6        331.4
SDR holdings                            35.8        42.1        44.8        58.3        56.3        61.6        92.0        177.2
Government                               6.3         5.0         4.9         4.9         1.1         2.6         10.0        10.0
Foreign liabtlities                       -1.1       -12.2       -10.2        -4.1       -10.4       -21.6       -36.6       -37.0
Not domestic credit                     -2,263.3   -1,170.6       -397.9    1.044.8    3,222.6       1,816.3    1,732.5       5,310.9
Clam  on Fedoral Goveroaentt/ (nUt)  -2,478.3   -1,428.5        -687.1       629.5    2,613.1    1,082.0          976.2    4,600.3
Advance                                 --          --          --       1,226.2    1,166.4         --           --          -
Treasury btill                          18.9          1.3        4.7        161.0.       27.2        23.4         1.1     3,409.9
Tresury certificateo                     0.6          2.6       35.2         79.6    1,177.0      1,086.7     1,591.3     1,113.8
Govern eet *to,k                         0.1        309.8       451.9       216.3      826.6      1,410.6    1,268.4-    1,529.1
LeeS dspo itakl                     -2,497.9   -1,742.4   -1,198.9   -1,053.6         -582.1   -1,436.9   -16884.6   -1,452.3
Clei  on prtvate sector                 195.0        257.9       289.2       413.3       607.5       734.3       756.3       910.4
bill and ntest diScounted              14.8        66.0       112.8        84.3         77.1        79.2        T9.2        79.2
Direct advances and investment         175.2       156.9       161.4        310.0      503.4        540.1       450.3       565.7
Claim. on development banks              5.0        15.0         15.0        21.0        27.0       113.0       226.6       265.5
Claine on co,mercial banks                -           -           --           -          -            --          --
Liabilities to banks                       331.4       902.0     1,094.0     1,189.9        741.4       732.6    1,532.1      1,376.1
Currency in co_ercial banke               68.8       124.8       188.8       191.2        224.5       352.6       403.6       463.8
Banker;' deposits                        262.6       777.2        905.2       996.7       516.9       380.0     1,126.5       690.3
Liabilities to the privat. sector           677.8    1,328.1      1,567.5     2,204.0    2,784.4      3,436.5     4,265.9     5,445.5
Currency in tirculetion                  569.0    1,030.7       1,351.2     1,971.4     2,381.7     2,703.4     3,185.9     4,347.7
State government deposits                  37.1       279.8        46.4        32.9       102.5       225.1       224.8       143.1
Other depoeite                             70.9        17.6       169.9       199.7       300.2       510.0       855.2       947.7
Capital and raeerves                        14.2        19.9        27.0         36.0        44.0        54.0        67.0        91.0
Allocation of SIDRa                          34.4        33.4        33.4        36.1        56.3        61.8        03.7       157.2
Other items (not)                           111.3       119.7       163.2       340.5       936.5       819.9     1,126.1       652.1
*/ Including tecurities sequired from commercial banks
bI Including the counterpart of government foreign sechenge holdings, and IPF Treasury sdjustmente
5 Excludes DM Treasury adjustmnts
Source: Centrel Bank of Nigeris



Table  6.3:   SUMMARY ACCOUNTS OF THE  COMMERCIAL  BANKS, 1974-1981, END  OF PERIOD
(b Million)
1974       1975        1976       1977        1978        1979        1980        1901
NMt foreign Seaete                            47.9        93.7      112.7       199.9       112.9       169.7      161.9       129.2
Aesets                                      64.2       106.6      159.6       225.1       177.8      236.3       250.2       259.2
Liabllitles                                -16.3       -12.9      -46.9       -25.2       -63.9      -66.6       -88.3      -131.0
Resarves                                     331.4       828.7    1,094.0       851.6       741.4       797.3    1,532.1    1,376.1
Currency                                    68.8       124.8      18i.8       221.6       224.5      352.6       403.6       485.6
Dcposits at Central Bank                   262.6       703.9      905.2       630.0       516.9      444.7    1,128.5        890.3
Met domestic credit                        1,708.1    2,360.7    3,474.0    5,053.8    5,566.5    7,278.8    9,017.0   10,770.1
Claims on Federal Government               767.8      820.6    1,340.1    2,004.5    1,489.9    2,596.3    3,r06.5    2,205.5
Bankers' Unit fund                        -           33.5      101.9       324.8        99.4      125.2        19.3        19.4
Treasury bills                           493.6       512.7      467.0       296.0       512.4    1,307.0    1,600.5        917.5
Treasury certificates                    261.8       215.3      587.7       857.8       440.6      837.0       834.3       856.4
Government securities                     10.6        59.1      142.1       243.3       143.5      272.4       524.8       361.9
Stabilization securities                  --         --          40.8       261.4       272.8       --           0.1        --
Investment In call money fund             --                                                        -           -           -
Direct advances                            1.8        --          0.6        21.0        21.2       54.7        27,5        50.3
Claims on private sector                   940.3    1,540.1    2,133.9    3,049.3    4,076.6    4,682.5    6,434.5    8,743.9                                   1
Liabilities to the Central Bank               -- --                   --         --          O- --                   -c
Money and quasi-money                      1,693.9    2,839.2    4,164.3    5,235.2    5,302.6    6,967.8    9,535.1   10,497.5
Demand deposits                            720.7    1,266.6    2,185.1    2,980.1    2,700.9    3,265.7    4,421.9    4,701.5
Private                                  579.1       985.3    1,660.6    2,249.6    2,328.5    3,004.0    4,020.3    4,571.1
State Covernments                        141.6       281.5      524.5       730.5       372.4      261.7       401.6       130.4
Time and savings deposits                  973.2    1,572.4    1,979.2    2,255.1    2,601.7    3,702.1    5,163.2    5,196.0
Savings accounts                         286.7       521.3      709.2       930.1    1,075.7    1,283.6    1,589.5    1,979.2
Other                                    686.5    1,051.1    1,270.0    1,325.0    1,526.0    2,418.3    3,573.7    3,816.8
Capital accounts                              92.1       124.4       157.0      201.7       267.0       327.7       389.1      497.4
'spital                                     75.5        90.2      104.7       137.9       177.7      211.7       237.6       227.9
Reserve fund                                16.6        34.2       52.3        53.8        89.3       116.0      151.5       269.5
other items (nec)                            301.4       319.5       359.4      668.6       852.2       946.7       736.8    1,279.5
Source: Central Bank of Nigeria



Table 6.4:   LANKING SYSTEM CFEDIT TO THE KCONff , 1970-81
(N Million, and of period)
1970    1971    1972    1973       1974     1975      1976     1977      1978      1979      1960    1981
Credit to Private Sector (net)    478.0   591.2   750.2   845.4   1070.2   1770.1   2417.8   3443.0   4723.0   5416.8   7190.9  9654,2
Central Bank                      129.0    93.6   141.0   108.5    150.4    258.0    289.3    415.3    530.4    734.3    756.4   910.4
Coumeteial Banks                  349.0   497.6   609.2   736.9    919.8   1512.1   2128.5   3027.7   4192.6   4682.5   6434.5  8743.8
Credit to Government (net)          662.4   531.4   591.0   497.1  -1534.1  -1281.5    199.5   2094,4   3345.1   3438.5   3596.6  6614.3
Central Bank                      148.4   232.4   124.2   115.3  -2189.7  -1858.7   -629.9   1015.2   2290.7   1079.7    956.8  4580.9
Commercial Banks                  509.0   294.4   390.4   377.2    650.9    571.1    819.6   1071.2   1046.2   2358.8   2632.4  2026.3
Federal Savings Bank Deposits       5.0     4.6      4.4     4.6       4.7     6.1        6.8       8.0      8.2      -          7.4      7.1
creH it to Dowiestic Ecoiroey (net) 1140.4  1122.6  1269.2  1342.5   -463.9    488.6   2617.3   5537.4   8068.1   8855.2  10787.5 16268.5
Souirve:  Central banlk of Nigeria



Table 6.5: Loans and Advances of Commercial and Merchant Banks by type of Securities
(M million, end of period)
Commercial Banks                       Merchant Banks
1978      1979      1980       1981    1978    1979    1980    1981
Document Bills                  92.0       127.0    170.1       237.8    4.5      1.5      6.4     7.9
Real Estate                    937.5      1142.4   1416.4      1947.2   30.5    34.0    53.1    84.8
Plant, Equipment               480.4       459.8   1028.2      1203.7    4.0      9.6    20.7    48.7
Time and Saving Deposits
Life Insurance Policies
and Other Cash Deposits      293.7       319.8    387.4       525.6    3.1      4.6     9.5    11.9
Corporate.and/or Government                                                                                         t
Securities and Other
Financial Assets             351.9       398.9    639.0       957.2    1.6      5.3    11.7    46.1
Personal Guarantee             190.2       368.7    546.2       636.2   19.6      4.4    10.7    27.5
Otherwise Secured              839.4a    969.0   1390.3 8/  1854.8    76.6  100,6   167.7   232.3
Unsecured                      610.0       745.4    603.1       881.8   17.4    36.8    74.9   111.1
Total                         3995.1      4530.9   6180.7      8244.3   157.3  196.8   354.6   570.3
a/      Residual
Note:   Totals may not add up due to rounding
Source: Central Bank of Nigeria.



Table 6.6: Maturity Patterns of Commercial Banks Loans
(Percentage)
1966   1967A'   1968a-/   196#0/   1970 /    1978 /    1979k/   1980kb    1981k/   1982
Within 1 year  '88.8    1.0       90.4     89.3      89.9      83.8     80.8      77.7      77.0     79.9
1-5 years         9.0    7.0       7.6      8.5       9.4      12.5     17.6      17.4      16.7     16.0
Over 5 years      2.2    2.0       2.0       2.2      0.7       2.7      4.6       9.9       6.3       4.1
a/ Average of monthly proportions
b/ Year ending December 1
c/ February 1982
Source: Central Bank of Nigeria



Table 6.7:   Loans and Advances of Commercial and Merchaint Banks by maturity
(H million, end of period)
Commercial Banks                       Merchant Banks
1978     1979      1980      1981     1978      1979      1980      1981
On Call                      2140.0   2283.7   3247.7   4372.4        13.1      11.6     28.0    36.4
Maturing within 3 months    390.0    427.7    393.0    451.9          11.2      14.7     17.6    29.0
Maturing 3-6 months           347.7    392.1    432.1    459.4        12.0       2.1     11.2    14.3
Maturing 6-12 months          472.9    538.1    729.0   1068.2        24.7      15.9     53.1    66.4
Maturing 1-3 years            354.6    439.4    667.6    730.9        45.8    100.1    152.3   258.1
Maturing 3-5 years            183.3    250.2    406.7    649.3        35.7     41.2      78.6   108.0                   1
Maturing after 5 years        406.8    179.7    304.7    577.2        14.9      11.3    .13.8    53.0
TOTAL                        3995.1   4530.9   6180.7   8274.3    157.3    196.8    354.6   570.2
Note: Totals may not add up due to rounding.
Source: Central Bank of Nigeria



- b1 -
Table 6.8: Investment Portfolio of Insurance Companies
(N million)
Life                   Non Life
1977    1978    1979    1977    1978    1979
Government Securities           35      42       43      30       39      40
Stocks and Shares               22      32       54      17       26      40
Real Estate and Mortgages       27      33       52      13       17       25
Policy and other loans           5       7        9      31       14        9
Bank Deposits and others        32      36       57      28       91      73
Total                          121     150      215     119      187     187
.Source: Federal Ministry of Finance



- 62 -
Table 6.9: Size of the Nigerian Issue Market
Industrial Securities Issued (1961-80)
Cumulative no. of        Cumulative Amount
No. of Securities quoted   Public issues as at the    of Issues as at
Year    as at the end of year              end of year            the end of year
Equities   Debs. & Pref.   Equities  Debs. & Pref.             (N'000)
1961        3             1              3            1                  1,220
1969        8             2              9            2                  7,775
1970        9             2             10            3                 15,675
1971      14              2             15            3                 54,415
1972      21              6             22            9                 69,159
1973      25              6             26            9                 83,422
1974      35              6             36            9                 98,625
1975       35             6             36            9                 99,625
1976      42              8             43           11                125.141
1977      46             10             47           13                191,050
1978      52             12             53           15                235,566
1979      90             12             91           16                320,753
1980      91             14             92           18                361,066
Source: The Nigerian Stock Exchange.



Table 6.10:   Number and Value of Transactions of Lagos Stock Exchange
Number of Transactions                             Value of Transactions (N'000)
Government           Industrial                     Government            Industrial
Years   Securities      %    Securities       %    Total   Securities        X     Securities       X      Total
1961         92       27.5        242       72.5      334      1,420.8    93.4          99.6      6.6      1,520.4
1962        175       25.2        520       74.8      695      4,231.8    92.8         330.6      7.2      4,562.4
1963        296       41.6        415       58.4      711      9.736.8    93.8         646.2      6.2    10,382.8
1964       404        41.0        581       59.0      985    11,819.0    84.5        2,173.2    15.5    13,902.2
1965        391       38.4        627       61.6   1,018    14,389.8    90.7         1,469.6      9.3    15,859.4
1966        501       45.7        595       54.3   1,096    15,226.2    92.9         1,169.4      7.1    16,395.6
1967        336       44.0        427       56.0      768    12,103.4    96.9          300.0      3.1    12,943.4
1968        286       44.3        360       55.7      646    12,582.8    98.4          210.8      1.6    12,793.6
1969        307       55.5        246       44.5      553    16,190.0    98.9          180.0      1.1    16,570.0
1970        303       47.8        331       52.2      634    16,396.0    98.6          238.0      1.4    16,634.0
1971        204       21.4        748       78.6      952    16,342.0    90.3        1,753.0      9.7    18,096.1
1972        258       28.7        640       71.3      898    26,190.0    96.4          982.6      3.6    27,172.6
1973        232       34.4        537       65.6      819    91,858.0    99.4          527.8      0.6    92,385.8
1974        256         8.4     2,807       91.7   3,063    48,374.2    97.4         1,298.5      2.6    49,627.7
1975        193       27.8        501       72.2      694    62,830.0    98.6          403.0      1.4    63,733.0
1976        321       31.6        696       68.4   1,017   111,282.0    99.5           560.0      0.5   111,842.0
1977        337       20.4      1,314       79.6   1,651   178,183.0    99.3         1,223.0      0.7    18,006.0
1978        259       11.9      1,912       88.1   2,171   226,692.0    98.6         3,045.0       1.3   229,736
1979        145        5.1      2,706       94.9   2,851   143,501.0    98.6         1,987.0      1.3   145,488
1980        263        3.2      7,902       96.7   8,165   512,034.0    99.9    10,816.0           2.1   522.851
Source: The Lagos Stock Exchange.



- 64 -
Table 7.1: Index of Major Crops Production; 1976/77-1980 1/
(Index)
1976/77      1977/78         1978/79       1979/80        1980
Millet              100.0         113.5           98.9          85.1          65.4
Yams                100.0          75.0           72.2          64.8          57.3
Maize               100.0          81.5           48.3          45.7          36.8
Cassava             100.0          80.7           72.0          68.0          64.0
Rice                100.0          42.3           72.2          45.6          25.0
Melons              100.0          81.5           64.0          51.4          50.8
Cocoyams            100.0         105.6           58.9          33.3          26.8
Groundnuts          100.0         102.2          141.9         158.9         146.7
Cotton              100.0          43.5           82.0          60.1          44.6
Source: Data provided by the Nigerian authorities.
1/ Crop year May-April.



- 65 -
Table 7.2:  Index of Industrial Production, 1970-81
(Base: Quarterly Average 1972,= 100)
Total all
Manufacturing    Mining    Utility    Industries
1970                                  89.0            80.2       68.4         82.7
1971                                  92.8            85.6       87.9         87.9
1972                                 100.0           100.0      100.0        100.0
1973                                 123.6           112.6      117.5        116.2
1974                                 119.5           123.4      130.3        122.3
1975                                 147.7            97.8      153.8        115.1
1976                                 182.2           113.4      184.5        137.1
1977                                 193.5           114.6      212.5        143.6
1978                                 221.4           103.6      260.6        145.0
1979                                 327.5           126.0      232.8        192.9
1980 a/                              344.7           113.0      271.7        190.8
1981 b/                              364.2            78.5      327.9        175.7
1980 a/
1st quarter                        363.7           117.6      268.2        199.8
2nd quarter                        284.1           119.1      242.7        174.8
3rd quarter                        366.8           105.6      261.9        192.8
4th quarter                        364.0           109.9      313.9        196.0
1981 b/
lst quarter                        370.5           106.2      318.4        195.7
2nd quarter                        312.9            77.6      337.3        159.0
3rd quarter                        367.4            47.2      328.0        156.2
4th quarter                        406.0            82.9      328.0        192.0
a/ Revised.
b/ Provisional.
Source: Central Bank of Nigeria, computed from data obtained from the Federal
Office of Statistics.



Table  7.3:    Index of Total Manufacturing Production avtd of Selected Products, 1977-81
(1972 - 100)
Total      Beer      Cement      Cotton        Rubber      Soaps andi   Vegetable    Vehicle          Cigarettes         Pharma-
textiles                 detergenrti        oils        assembly                       e:utcl&lt
t4elghts       l00.0       i8.8       4.0        16.2          0o.             8.4            4.1           05            13.5              1.2
1977          266.8        8.65.5   :i7.1      '179.2        109.3          3?8&4            4.8 a     ¾1097.3           122.0           186.6
1978          305 2      285.1   139 6          167..        122. 6         362.5           15.4          9927           129.0           352,6
1979          327.5       Pf 0. 8    161.9      184.2        1¾126          32 5. 5         16.3       ).@138.9          117.3           227.2
19580 I/      344.7      604r8    146.9         257.3        111.8           44e9.2         12.5       2708.2            123.0           122,4
1981 7/       364.2       6(.53    170.2        235.2           ...         596.0            1. ,139.1                   121.3           127.9
1980
|           367. 7     627.3    146.0        277.0             .          575.0            . .       2p 514. 0        1 24. 9         122.0
11           284.1      470.0    146.0        276.9            ...         2 7 0.1          .         2,586.8          125.0            1X0.8
11           366.8      690.9    l 41 2        2380 *G                     70 § 0              .      2,735.9           119.2           126.9
IV           364.0      (i31.0    151.4       237.2            ...         24S.6            ..        3,396.0          123.1            140.0
198)
|F          3  0370, 5  6 29.0    153.0      2 25.3          .=           60.                .       1 .  20 0 .      122.2 2           2I4   9
11           312.9      620.1    167 .4       23440            ...         601 .0           ..        I I 4 3. 9       122.0           1527_1
367.4      69,10. 9    160.3     2 35. 2.        .           60n99                          p 4 7. 0      120.1           130.0
IV           406.0      631,0    200.1        236.1           pr             5,2              o.      4064.6           2i2  .0           29.2
(nnuaUl chn9n8e Itt p[er cett 
19 7             6.7        2.8   B    1                   . la  4           440 49.            3          57r -1,9                      '2. ? 9
1978      I      ko 4      53.9    )01.          -6oPR         12.2          104            6.1           7.        5     5,7            839.0
1979             7.3        9.0      3>I16       1            'I 0."   "'2   1                5.6          14.7           -9.1           -35.6
I98o             5. 3      94.6      -9. 3       a39.           1.1          36..          -23.3         1k46.6            4, ,9 -4 60
98                         0r)      1 5 g t1   .,9   _     8 >t. 6           1 32 ,7         . ..        -fi591  epo   1  4                4. 5
I             1.9            3     4.8       -15.1 4S e                                                -52.3           -22.              1.4
01                        0.0 CIO  14.7      -15.5                        122Q.            -.           - 5S.8          -2P4            26.1.
I1I  e2                     0.0      13. 5       - 12           e           -13. 9                        -58.1            0. 8            2.4
IV            11.5         0.0     32.1         -0.J           ...         1340 Y..                     -68.7            -1 1            7-7
KIt. kae     WI  icw 0Ytt     by NgUrv9r 1"   a it bir I itie.9
7/  8cicvl slonc19



Table  7 . 4:  8ASIC INDUSTIIIAL INDICATORS FOR SELECrED NICERTAN MANU1ACTURING ESTABLIS,4=ENTsL
(1973 - 1977)
Number of      Number   Wages &   Gross  Industrial  Valsve    Net Capital Non-indus-  Value Added  Wage Content  Value Added    Iavestment   Average
Eitablishments  Employed  Salaries  Output       Costs    Added    Expenditure  trial Costs  Content of OL Value Added           per        Output Ratlo  Wages &
(N'OCO) (N'000)   (N'000)   (N'OOO)       (N'000)       (N'000)   Output (S)         (2)          Worker             (a) Salaries
(NOQ0U)                      (1U000)
(1)           (2)         (3) _ (4)    _(5)             (6)         (7)      _(a)         (92z65(4    (10)-(3)*(6)   (1l)-(6)sj(2)  (12)-(7)4(5) (13)-(3)+(2
Veetakble Oil MiliIng
1973                           46            6270       2733    61511    46194       15317       1879          9103          25              18            2443             12           436
1974                           35            7285       2243    49748    28992       20756       -138          4119         42               11            2849              a           308
1975                           46           25826       9621    47460    29070       18570      17532          5449          39              52             719             94           373
1976                           43           16878       8838    65401    45548       19853       9261          2931          30              45            1176             47           524
1977                           47           23817      10367    85109    61517       23591       6263          3106          28              44            ,991             27           436
Rate of Change (73-77)                    0.4           30.5      30.5       6.7       5.9        9.1       27.1        -19.4          2.3            19.6          -16.5             17.6         0.0
Textiles (Spinnine 4 Weaving)
173                            73           39364      22196   159150    96825       62297      16327         32868          39              36            1583             26           564
1974                           70           39829      27955   209803   119593       90210       7045         33645          43              31            2265              a           702
1975'                          68           50241      54072   378063   211329      166734      64434         42138          44              32            3319             39          1076
1976                           41           55009      65263   421207   285417      135790      64008         19443          32              48            2469             47          1186
1977                           57           64961     85426   511959   285158       226441      71791         55109          44              38            3486             32          1321
Rate of Char.ge (73-77)                  -4.9           10.6       30.5     26.5      24.1       29.5       34.2          10.9          2.4             1.1           17.1              4.2        18.6
Made-up Textilq Goods
1973                            15           3007       1614    11593      8050        3544      1818          2567          31              46            1179             51           537
1974                            14           4425       3267    28017    18678         9339      3412          3775          33              35            2111             36           738
1975                           18            4641       3904    26148    14388        11760      3294          4897          45              33            2534             28           641
1976                           15            3926       3761    26997    14545        12452      3807          3457          46              30            3172             31           958
1977                           17            7006       6662    43683    22106       21577      19194          7386          49              31            3080             89           951
Rate of Change (73-77)                    2.5           18.4       32.5     30.5     22.5        43.5       61.0          23.1          9.6            -7.6           21.5             11.8        12.1
Leather Footwear
1973                            18           3981       3645    20208    11978         8230       !683         2502          41              44            2067              8           916
1974                            19           4119       4203    23474    10906        12568       620          3555          54              33            3051              5          1020
1975                           20            4208       5202    44459    14726       29733       1691         20508          67              17            7066              6          1236
1976                           18            4528       6891    30772    15047        15725      2008          7345          51              44            3473             13          1522
1977                           17            4249       7172    31545    15317        16229      1898         10215          51              44            3819             12          1688
Rate of Change (73-77)                   -1.1            1.3       14.5      9.4       5.0        14.6       2.4          32.1          4.4             0.0           13.0              8.5        13.0
Saw Killing
1973                           116           5424       5420    22136    10455        11680      2995          2289          53              46            2153              26          999
1974                           108           9612       6346    24432    11727        12705       1085         6498          52              50            1322               9          660
1975                          139           12114       9711    39124    17027        22097     16311          4190          56              44            1824             74           802
1976                          185           16875      17238    45232    30971        14259     20465        138792          32             121             845            144          1022
1977                          166           19945      19045    75796    35685        40111     20354          7748          53              47            2011             51           905
Rate of Mhange  (73-77)                   7.5           29.8      28.8      28.0      27.9       28.0       46.5          27.5          0.0             0.4           -1.4            14.4          2.0



Table   7 .4  contd.:   BASIC INDUSTRIAL INDICATORS FOR SELECTED NIGERIAN MANUFACTURING ESTABLISHMENTS-
(1973 - 1977)
Number of        Number    Wages &   Gross  Industrial  Value   Net Capital   Non-indus-  Value Added  Wage Content  Value Added                     Investment   Average
Establishmnents  Employed  Salaries  Output          Costs    Added   Expenditure   Trial Costs Content of  of Value Added per worker    output Ratio  Wages &
(N'000) (N4000)   (I4 O00)   (N0ooo)    (DO) (              NOOO (N )    Output (%)       Cl)            (NO0OO)             (I)        (NO000)
(1)             (2)         (3)      (4)        (5)        (6)           (7)            (8)       (9)-(6)4(4) (4 0)-(3)4(6)    (11)-(6);(2)  (12)-(7)T(5) (13)-(3)B(2
Other Wood & Cork Products
1973                             n.a.            n.a.       n.a.       n.a.      n.a.         n.a.       n.a.           n.a.          n.a.             n.a.            n.a.              n.a.          n.a.
1974                               3               50          26       149         6          143         46              2           96               18             2860               32           520
1975                              11             1616       1671     25822      17085        8737        2225           1680           34               19             540/               25          1034
1976                               5              456        492      4513       2346        2167        1171            709          48                23             4752               54          1079
1977                               5              474        538      3688       1803        1885        1105            565           51               29             3977               59          1135
Rate of Change (74-77)                       13.6            75.2      135.0    150.0         **         94).0      168.0           **           17.1              12.7             8.6             16.5          21.5
Wooden Fixtures & Furniture
1973                             n.a.            n.a.       n.a.    n.a.        n.a.          n.a.       n.a.           n.a.          n.a.            n.a.            n.a.               n.a.        n.a.
1974                              84             5066       2846     13824       7875        5948         507           1826           43               48             1174                9           582
1975                             126             7787       5603     27318    14076         13243        5836           2343           48               42             1701              44            720
1976                             117             7831       5212    49120    27187          21933       13488           3337          45                24             2801              61            666
1977                             121             8307       8007    56301    31873          24426       14594           6115          43                33             2940              60            964
Rate of Change  (74-77)                       9.6            13.1       29.5      42.0      41.9         42.8      188.0           35.1           0.0             -8.9            25.9              61.0          14.5
Containers & Paper Hoard
1973                              10             1763       1825     15816      10007        5809         231           1754           37               31             3295               4           1035
1974                              11             1852       2554    25748       16076        9658         475           2190           38               26             5215                5          1379
1975                              14             2121       3601    32671      19274.       13397        1970           2956          41                27             6316              15           1698
1976                              24             3523       4628    48900    29131          19769        3025           3807          40                23             5611               15          1314       C.
1977                              14             2941       6044    59089    35697          23392        4352           7377          40                26             7954               19          2055
Rate of Change (73-77)                         7.0          11.1        27.0      32.0       28.9        32.0        80.0          33.0           1.6             -3.5             19.3             36.5          14.7
Faper Products
1973                               8             1605       1459     17525      10337        7188         909           1826          41                20            4479               13            909
1974                               8             1947       2200    27548      18342         4207         555           3839          33                24            4729               6            1130
1975                              11             2993       5218    49512      33128        16384        3310          5576           33                32             5462              20           1743
1976                              10             3110       4318    51121    31422          19699       13008            386          39               222             6334              66           1388
1977                              12             3412       5574    68498    41561          26935       14631         10160            39               21             7894              54           1634
Rate of Change  (73-77)                        8.5           16.3       31.0      32.0      32.0         30.5        74.0          41.0          -1.0               1.0            12.0             33.0          12.4
Printing & Publishing
1973                              68             8298       9308    35293       16523       18771        3496           4002          53                50             2262               19          1122
1974                              76             9147      11373    46283       21148       21535        5363           5071           50               53             2354              25           1243
1975                              98           12396       13884    69207      27632        41574      83981           5619           60                33             3354             202           1120
1976                              97           12455       27659   101077      37115        63962      91677            1916          63                43             5135             143           2221
1977                              99           13387       22055   114321      43150        71171      97754           5743           62                31             5316             137           1647
Rate of Change  (73-77 )                       7.8           10.0      18.8       26.5      21.5         30.5       94.0            7.5           3.1             -9.1             18.8             48.5           8.0
Types 6 Tubes
1973                               9             2274       2883     24522      11376       13146        1166           5876          54                22             5781                9          1268
1974                               9             2646       3776    33516       12794       20721         147           3562          62                18             7831                *          1427
1975                               7             1772       3101    26780        9653       17127         265           1567          64                18             9665                2          1750
1976                               9             2467       5839    41702      18649        23053        3831          2481           55                25             9345              17           2367
1977                               9             2517       4678    46479        9769       36709        2314           5584          79                13            14584                6          1859
Rate of Change (73-77)                         0.0            2.0       10.2      13.6      -3.0         22.9       14.7           -1.0           7.9            -10.0            20.5              -7.8           8.0



Table   7 .4   contd.:                    BASIC INDUSTRIAL INDICATORS FOR SELECTFD NIGERIAN MANUFACTURING ESTABLIShMENTS/
linoer  t        ,ftili    Wer age.s &   G-.ross eod-/Pustal-                                        Value-  Added  kagde C-te-t       Average   T Ies tuco          Average
Estrbli lotir    Emoapliyped  Sularies  Orptst    Costs         Added l    opsodit-re  trial Casts   C,ute-t If  & Value Added   Productivity  OuLtput R.tA.'  Wages &
(N0 no1   (N 0401    (8i000)   1i000)    (Non)              (NA000)       Otipot (7)        (7            olf Loti (r                    ularlos
(N)                          N0)
(I    _      (2)          13)     I_)           (ul        16)          171           (8)        (9)-(6) (4)  _10)=(3) (6)   li)=lt) (2)  112)=(2):(6)  (1) -(3i.-2
Cents ii t
1913                                5           2861        2989     30744        9636       2111'      19021           15671           69                14            7327               90           1045
1974                                5           2796        3913    401174       11367       23807      10471            S0D7           70                14          10124                37           1400
1975                                5           2158        2380     140( 7        5384       8614      14033              55e          62                28            4001              163           1103
19/(l                               5           3621        6043     14373        14460      39013      14251            2475            73               IS           11023              111           1669
1977                                8           5482        7090    58481        16381       42100      41343            4516           72                17            7680               98           1293
Race of Chage  (73- 77)                         9.9         13.9        18.9   11 .7          11.2        14.8       16.8           -21.9           0.9              4.0       0      .8              1.7            4.3
foni rete Prodoucts
1973                               22           2877        1711    12008          6184       5825       1281             1495          49                29            2025               22            597
1974                               28           3452        7452    19989         8461       11525        -39            3474           58                21            3339                *            710
1975'                              44           5856        5088     41536        18977      72559       5681            59:7            54               25            3852               25            954
1976                               '/.          5946        5625     502l5       22596       27619      12816            3517            55               20            4645               46            946
1977                               67           7301        9565     6R070       33J79       34691       6853            4081           51                28            4752               20           1310
Ratc  of Change (713-77)                      25.0          20.5        27.2      41.5        40.0        42.8       39.9            22.5           0.8             -0.7           18.6              -2.0           17.0
Irou.St-cl & son-Feecoes Metuls
1973                             q.a.           n.a.        n.a.     ro.a.        n.a.        u .a.      n.a.            n.a.          o.a.              n.a.           n.a.             n.a.           n.a.
1975                               18           2462        2185     56682       38125       18556        844            0657           33                12            0537                 5           778
1975                                6            720         822     29002        4714       24293        936              959          84                 3           33740                4           1142
1976                               )0           2289        3139    57940        24779       33161        1352            3351           57                9           14487                 4          1371
1977                               11           2804        3004    64591        30063       37028          72           2999            57                8           13285                            1071
Rate of Change (73-77)                       -11.6           3.3         8.3       3.3        -5.1        18.9      -45.9             3.1          14.6              9. 1           15.1                             8.3
lr Vehicle Assomb'ly                                                                                                                                                                                                                        Os
1973                                -.                        -                     -           -           -               -            -                -              -                  
1974                              1i            1966        1530    47472        27172       20300        224             1953          43                 8           10326                 1           778
1975                               11           3603        3759   188506        136303      52203       4895             a627           28                7           14489                 9          1043
1976                               16          10019       10376   375150       303870       71820       5732           53048            19               14            7168                 8          1036
1977                               17           8914       18458   533662       463199       65473      19010           51623            12               28            7345               29           2071
hare of Cbango  (73-77                         9.1          46.0       87.0       84.0       101.0        34.0       e-             1i6.0        -27.5              37.0           -8.2            190.0           28.5
Othee Iduoufuetuelogs
1971                             618           84288      61977   823930        417015      407443      63272          210411           49                15            4834                16           735
1974                             545           80611       70931    875609      446140      429471      40537          153953           49                17            5328                9            880
1975                             666          106191     122408  1571461        852991      718289     137727          221652           46                17            6764                19          1153
1976                             627          122752      177521  2391092      1161217   1229335       156514          148156            51               14           10015                13          1446
1977                             751          148923     226331  2560819       1371611    1194689    360379            379868           47                19            8J22               30           1520
Rate of Change (73-77)                         4.0          12.0       29.5       25.3        26.2        24.0       41.0            12.5          -0.9              4.8            10.6             13.4           15.6
T t, 1
1973                            1008          162012     111766  1234936        654580      580357     113(1078        290364           47                20            3582               19            727
1974                            1045          175799      142800  1518851       787902    820949        71161          235126           43                21            4113                10           843
1975                            1290          244243      250545  2611091      1425757    1185334      364338          333644            45               21            4853                 5          1026
1976                            1276          271685     352843  3814810       2064300   1750510    446414             397151           46                20            6443               26             99
1977                            1418          324440    440016  4382091        2498269    1886448    681913            562195           43                23            5814               36           1356
Ruts ef Change  (73-77)                         7.1         14.9        30.1      28.5        30.9        26.5       43.5            14.1          -1.8              2.8           10.2               13.6          13.3
Neglible.
00 heore tlian o08 percest 
a/  Duts refor toeminsfac-rtinRl  r-tubliohnents repl,ciug ts or more per-ons.
b/  fleein  utput is rho value t   f sales products, plus receipts for resale I.        po-ds sold is the some --   oditi-s us ihen bo ght, value of cinLtra w urk, receipt fur  -inutenance and repairs,
valuse s F ,1sscs produced foer oo  sue Ir  ns _ s the Iali ee   inveerory  -hagos isf i-sih g-udo sod .oRk in progress.
c/  Induotrral ciito consist of costs of  na-erials, fuel, al-ectr- iLy, goods sold in the sase condititn as wRen Sought, cocute work dots hp  rthers on own nah-rials and repairs and
aisetenance week dose by nthers.
d/  Value--ddod me.ns i en-ts valor added and it Is the differenre  heiwree  gross output and icdi,strial cots.
e/   Net capital espenditure is the cent of sew  and  used  -apitCal equipme.rs purrhaurd  oy -utablish-ests d-ilug the year st let ourvey plus Lthe  -alu  of onsets pr-d-ced by own esplopea.
less proceeds fron the sale of ay capItal assets alen-dy lcid bh  the eseablishncnt.
f/  N.-s-tnilssrial costs arc the incidenial espenec  chich are sot part of cents  if the rus  strl-i.ls. e.g. adniu-stratiserspenses.
-uree:  Federal Off- t        Statistics



Table 8.1: Composite Consumer Price Index Rural and Urban Centers
(Base: Average 1976 = 100)
1973 a/   1974 a/    1975    1976    1977         1978     1979    1980          1981
All Items                         66.3       75.2        100.0   123.8   143.0   166.7   186.3   204.8            242.5
Food                              60.8       70.4        100.0   122.0   148.0   171.9   185.7   199.9            250.2
Drinks                            71.4       72.3        100.0   131.8   140.0   154.0   175.8   188.0 b/   193.0
Tobacco and Kola                  91.3       97.4        100.0   142.7   183.1   186.0   202.9   229.2            264.8
Accommodation, Fuel & Light    91.8          93.8        100.0   108.6   127.3   131.4   166.9   170.4            173.2
Clothing                          70.6       83.0        ±00.0   128.1   141.4   176.3   219.1   270.2            313.7
Transport                         70.3       91.8        100.0   116.1   141.1   158.4   195.5   197.3            201.7
Other Purchases                   64.9       73.2        100.0   120.9   136.9   147.1   156.0   181.5            194.6
Other Services                    74.3       80.4        100.0   118.0   143.0   156.7   177.7   235.2            282.7
Rate of Inflation (%)              6.1        13.4        33.0    23.9    15.4    16.6        11.8      9.9        20.8
a/ Consumer price index in urban centers for lower income group.
b/ Estimate. Based on weighted average ratio between food and drink for January through June 1980.
Source: Federal Office of Statistics.



- 69 
Table 8.2: Annual Rate of Inflation (%) 1976-81
(base year = 1975)
Category                1976      1977      1978     1979      1980      1981
Urban                      +24.3    +14.0    +24.3    +11.1    +11.4         20.9
Wage Earners
Lower Income Group       +25.6    +14.0    +21.7    +11.8    +10.0    +19.7
Middle Income Group      +32.1    +12.9    +13.7    +10.6    +12.7         15.2
Upper Income Group       +18.2    +14.0    +25.2    +14.7    +11.9         13.1
Self Employed
Lower Income Group       +23.0    +12.9    +27.3    +10.4    +12.1         22.5
Middle Income Group      +24.8    +12.5    +18.6    +13.2    +11.7         14.7
Upper Income Group       +25.9    +11.1    +20.7    +16.5    +14.3         12.6
Rural                      +23.8    +15.6    +15.5    +11.9    + 9.7         20.8
Total                      +23.9    +15.4    +16.4    +11.8    + 9.9         20.8
Source: Federal Office of Statistics.



Table 8.3: AVERG  PRICES OP SELC     DO)MESTIC STAPLE FOOD CROPS IN SELECTED STATES 1I
(NAIRA PER TOMN)
STATE                 L A G 0          C R O S S R I V E R          S O l O T O
ITEM/YEAR         1979  1980  1981         1979   1980   1981        1979   1980   1981
RICE; (CLiFA)      624  908  1230           820   1070   1480         710    890   1280
BUNS               760  850  IIIAO          800   800   1190          420    600    860
MAIZE              327  420   580          1040   1270   1560         330    400    500
GARlB (Cassava)    500   580  1200          260   400   1120           _
YAM                785  880   820           340   420    450          540    670   1010
MILE               460   570  730            -      _                 320    350    480
GUIEA CORN          -    -      _            _      _      _          300    330    390
GRCUNDNUT           -     -               -                      -         -      -
sw.k}i                 o r o                    r   N 0 oAsVERUC                 ALL  S'ri
ITEM/YEAR         1979  1980  1981         1979   1980   1981        1979(1)       1980(2)
RICE (CLEAN)       571   960  1260          699   878   1280         684.8          961
B1ANS              535  670   660           445    463    9g0        592            677
MAIZE              695  620   510           266    249   250         531.6          536.5
GARRI (Cassava)    437   570   660           -      -      _         399            505
YAM                262   266   295           _      -      -         481.7          559
MILLET                    -     -            -     230   330         390            365
GUINEA CORN               - _               287    210    340        293            270
CROUINDUT           _    _      -           471    616   1120        471            608
- Not applicable.
n.a. Not available
Source; 'Returns from States Ministries.



Table 8.4:  INDICES OF AVERAGE WEEKLYPRICES (C.I.F.) IN LONDON OF
NIGERIA'S MAJOR AGRICULTURAL EXPORT COMMODITIES
(1974   100)
7a,
Weights         1975       1976        1977        1978        1979        1980          19817
All Commodities           100.0          67.0       106.7       166.3      141.3       152.7       126.4            11.1
Benniseed                   5.4          91.0        90.6       114.9      145.0       138.5       119.9          130.6
Cocoa                      15.3          76.7       131.9       250.8      193.9       183.4       104.7           108.7
Coffee                     10.8         103.4       227.2       409.4       216.5      273.9       169.5           170.7
Copra                       5.6          36.6        39.4        62.2       76.6       100.7        55.3            55.4
Cotton Lint                13.2          81.4       118.6       109.3      114.2       118.0       120.6           123.5
Ginger                     14.8          78.8        79.6       152.5      159.0       214.5        59.8            59.8
Groundnuts                  5.1          68.1        64.7        95.5       102.6        92.9       88.7            94.0Lb
Groundnut Oil               9.9          80.9        72.3        91.0       105.5        72.2       87.5            89.9
Palm Kernels                 4.0         45.2        50.8        74.1        82.3      105.1        55.2            65.3
Palm Oil                    6.0          63.7        57.3        79.1        88.5        92.1       71.9            80.1
Rubber                      7.5          90.8       146.4       157.0      166.4       152.2       147.8           134.8
Soyabeans                   2.4          74.8        77.4       107.3      104.4       108.3       101.9           104.0
/a  As of March 19RI.
/b  As of February 1981.
Source:   Central Bank of Nigeria.



- 72 -
Table 8.5.  PURCHASES ANID PRICES OF OIL PALM PRODUCE, 1971-80
Producer Price                Average f.o.b. Price
Year           Purchases                   Current         Deflated                Current
P.O        P.K             P.O       P.K    P.O        P.K         P.O         P.K
--('O0O Mt)--               --- -…-            …------(-  /Mt)       … -  …-- _______
1971       20          268             89        59      145        96        n.a.        n.a.
1972       13          231             98        59      156        94        n.a.        n.a.
1973       26          306            203       130      305      195         n.a.        n.a.
1974       66          250            265       150      354      201         n.a.        n.a.
1975       35          170            265       150      265      150         n.a.        157
1976        3          154            295       150      242      123         n.a.        236
1977       n.a.        173            355       150      240      101         n.a.         248
1978      n.a.         240            355       150      193       81         n.a.        174
1979       n.a.        231            450       180      2203                 n.a.        a.a.
1980       n.a.        197            495       200      242        98        n.a.        n.a.
n.a. = not available
P.O. = Palm Oil; P.K. - Pal Kernel
Source:   Purchases - Nigerian Palm Produce Board and Central Bank of Niger-ia.
Producer Prices - Nigerian Palm Produce Board and Central Bank of Nigeria.
Average f.o.b. Price - Central Bank of Nigeria.



- 73 -
Table 8-6: PURChASES AND PRICES OF COCOA, 1970-80
YEAR                         PURCHASES                 PRODUCER PRICE
('000 mt)                   (N/Mt)
1970                         308                            310
1971                         257                            310
1972                         241                            310
1973                         215                            450
1974                         214                            660
1975                         217                            660
1976                         166                            660
1977                         204                          1,030
1978                         161                          1,030
1979                         144                          1,200
1980                         114                          1,300
* Estimated:   in the second half of 1930 the unit value had fallen to
about N1,0004t.
Source:       Purchases          - (1970-77) - Nigerian Cocoa Board
Producer Prices   - (19-0-73) - N_gerian Cocoa Board
(1974-80) - Central Bank of Nigeria



- 74 
Table 8.7:  PURCHASES AND PRICE OF COTTON, 1960-80
Year                          Purchases                 Purchase Price
Seed Cotton                 Seed Cotton
('000 Mt)                     (N/Mt)
1960                             151                          n.a.
1965                             129                          n.a.
1970                             113                          n.a.
1971                             110                          n.a.
1972                             137                         133.9
1973                              81                         113.4
1974                             143                         201.6
1975                             170                         308.0
1976                             246                         308.0
1977                             117                         330.0
1978                             117                         330.0
1979                             117                         330.0
1980                              78                         400.0
n.a. - not available.
Source:   Purchases - (Seed Cotton - Nigerian Cotton Board and Central Bank of Nigeria.
Purchase Price - (Seed Cotton) - Nigerian Cotton Board.



- 75 -
Table 8.8:  PURCHASES AND PRICES OF GROULDNVTS, 1960-80
Year           Purchases              Producer Prices        C.i.f. European Ports
('000 Mt)                (N.Mt)               ($/Mt)          (N/mt)
1960              619                       75               197              141
1965              977                       68               206              147
1970              381                       63               230              164
1971              301                       67               249              177
1972              511                       80               261              172
1973               42                       92               393              259
1974              161                      165               607              382
1975               42                      250               452              278
1976               12                      250,              424              265
1977                5                      275               551              355
1978              0.4                      290               618              393
1979               18                      350               564              308
1980               -                       420              n.a.              n.a.
u.a. - not available.
Source:   Purchases - (1960-75) - Groundnut Board.
(1976-78) - Central Bank of Nigeria.
Producer Price - Nigerian Groundnut Board.
C.i.f. European Ports - Oil World.



- 76 -
Table 8.9:  NIGERIA - PURCHASES AND PRICES OF RUBBER
Year    Purchase             Producer Price                Average f.o.b.
('000 Mt)    RSS 1   RSS 3   NSR 5L   NSR 20           Price
(N/Mt)…------ ---    --   …____
1977       25          550      530      575       530           529
1978       22          550      530      575       530           692
1979       21          680     640       690       640           696
1980       20          795     755       795       745           n.a.
n.a. - not available.
Source:  Purchase              -  Central Bank of Nigeria.
Producer Price        -  Central Bank of Nigeria.
Average f.o.b. price -  Central Bank of Nigeria.



Table 8.10: GUARANTEED MINIMUM PRICES OF FOOD CROPS
(Naira per ton)
Growth
Rate
1976    1977        1978        1979 /A    1980       1981       (1976-811
Beans                                          -          180        180         345         345        362        15. Ob-
Cassava (Processed)                            85         110        110        n.a.         n.a       n.a.         n.a.
Maize                                          95         130        130         200         20O        210        14.2
millet                                         80         110        110         220         220        321        26.0
Rice (milled)                                  -          400        400         570         570        596         8.3-l
Rice (paddy)                                  185         240        240         329         329        345        10.9
Sorghum                                        80         110        110         210         210        220        18.4
Wheat                                          -           *          *          235         235        247         n.a.
Yams                                           85         120        120          *          n.a       n.a.         n.a.
n.a. - Not available.
/a Revised.
/b 1977-81.
Source: Technical Committee on producer prices, Central Bank of Nigeria.



Table 8.11: COMMODITY BOARD'S OPERATIONAL SCHEDULE AND PRODUCER PRICES, 1977/78 - 80/81
(N Per Ton unless Stated Otherwise)
Palm Oil                                 Rubber
Cocoa     Special   Technical    Palm Kernels  'Latex   Processed   Groundnuts    Seed Cotton
1977/78
Operational Expenses    167.8         118.0       118.0           84.0       182.5        -             111.6        198.1
Producer Pricesa         1030.0       355.0       325.0          150.0       365.0        -             275.0        330.0
Cost Price Ratio- (2)    16.3          33.2        36.3           56.0        50.0        -              40.6         60.0
1978/79
Operational Expenses    367.8         118.0       118.0          128.3       392.5        392.5         111.6        198.1
Producer Prices,         1030.0       355.0       325.0          150.0       365.0        575.0         290.0        330.0
Cost Price Ratio/(%)    35.1           33.2        36.3           85.5       107.5         68.3          38.5         60.0
.1979/80
Operational Expenses    383.6         125.9       125.9          136.5       402.3        402.3         136.8        211.4
Producer Price           1200.0       450.0       400.0          180.0       420.0        690.0         350.0        330.0
Cost Price Ratio           32.0        28.0        31.5             75.8       45.8        58.3          39.1          64.1.
1980/81
Operational Expenses    389.6         125.9       125.9            154.5     402.3        402.3         136.7        211.4
Producer Price           1300.0       495.0       440.0            200.0     485.0        795.0         420.0        400.0
Cost Price Ratio,/(%)      30.0        25.4        28.6             77.3       82.9        50.6          32.5          52.9
Growth Rates(1977-80)%
Operational Expenses       23.4         1.6         1.6             16.5       21.8         0.8'-'        5.2           1.6
Producer Price              6.0         8.7         7.9              7.5        7.4        11.6b         11.2           4.9
Cost Price Ratio-/         16.5        -6.5        -5.8              8.4       13.5        -9.5¢         -5.4         -3.1
a/  Operational Expenses. 'producer price x 100.
b/ Growth rates for 1978/79 - 80/81.
Sources: Data provided by the Nigerian Commodity Boards.



Table 9.1 Oil Sector Statistics
--------------------------------------------------------__-------------------_________--__-_-__--_-----__------__------__-
1972        1974        1976         1978        1979         1 980       1981         1982
Output(mbd)                                              1.818       2.256       2.067        1.830       2.356        2.063       1.441        1.290
Domestic Consumption(mbd)                               0.0144       0.067       0.082        0.1814      0.189        0.184       0.222        0.274
Net Exports  (mnbd)                                      1.774       2.189       1.985        1.655       2.200        1.918       1.227        1.003
Average Official Sales Price($/b) /1/                     2.82       11.25       12.67        13.89       21.26        35.44       38.90        35.75
Value of Exports($ Million) /2/                          1,716       9,019       9,445        9,455      15,655      24,943       17,162      12,750
as S of total Exports                                  84.0         90.8        89.8        83.5         88.0        91.4         93.9        95.1
Government Oil Revenue(N Million)                          732       4,184       5,484        4,809      10,096      13,210        9,710        8,300
as % of Total Revenue                                  52.7         81.2        77.8         67.2        82.6         83.6        77.8        75.3
-------------------------------------------------------------------__--------__-----__-----------------__-------
Sources: Central Bank of Nigeria, NNPC and staff calculation.
/1/ Thirty-seven degree API marker crude.
/2/ Balance of payments value of exportsz
July 26, 1983






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14.
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