Document Type

Annual Report

Publication Title

Central Bank of Nigeria Annual Report and Statement of Accounts


The Nigerian economy showed improvement in 1989 compared to 1988. Economic Growth: Gross Domestic Product (GDP) increased by 4.0%, driven by growth in agriculture and industry. The overall balance of payments moved from a deficit to a surplus, largely due to a significant increase in crude oil exports. The unemployment rate declined slightly, with more jobs created through government programs. Nigeria's external assets increased significantly, reflecting a deliberate policy to build official reserves. Inflation: Despite some improvement, inflationary pressures remained high, with domestic prices rising by 40.9%. Stagnant Manufacturing: Manufacturing production grew at a slow pace due to high production costs and weak demand. Oil exports accounted for a vast majority (94.9%) of total exports, highlighting the vulnerability to fluctuations in oil prices. Limited Non-Oil Exports: Non-oil exports grew modestly but remained a small portion of overall exports.

Breakdown of Nigeria's external management efforts in 1989 indicate that: Debt Management: Progress made in refinancing short-term trade arrears through agreements with the Paris and London Clubs; Debt Conversion Program attracted foreign investment and reduced external debt by $306.7 million. World Economic Activity: Global economic slowdown led to decreased growth rates, trade, and higher inflation; Efforts to strengthen the international monetary and financial system intensified. International Commodity Markets: Generally depressed due to excess supply and commodity agreement issues; International cocoa and coffee agreements faced difficulties. International Trade: Total world trade increased but at a slower pace than in 1988; Instability in foreign exchange markets impacted trade expansion. Lending by International Financial Institutions: Increased lending by the IMF to developing countries; World Bank Group's global lending commitments increased; Loan commitments by the African Development Bank Group to Nigeria increased. West African Clearing House: Transactions through the clearing house declined for the fifth consecutive year. Overall 1989 marked a year of improvement for the Nigerian economy, with efforts to address adjustment program challenges showing some success. However, significant challenges like inflation and dependence on oil remained to be tackled. Nigeria made some progress in managing its external debt in 1989. However, the global economic slowdown and depressed commodity markets presented challenges.

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