Document Type

Article

Publication Title

Annual Report and Statement of Accounts

Abstract

In 1992, Nigeria's economy faced significant pressures but showed resilience, with rapid growth in output and economic liquidity. The Central Bank of Nigeria (CBN) intensified efforts to achieve inflation and exchange rate stability while improving the efficiency of the financial sector. The financial sector experienced rapid growth and structural changes, with the strongest growth occurring in common unity banking and mortgage finance institutions. Monetary and credit aggregates expanded at unprecedented rates, matching the all-time highs of the oil boom era of the mid-seventies. Interest rates rose significantly, with both deposit and lending rates rising in tandem with the movements of the inter-bank funds market. Financial savings also rose, surpassing the trend since 1988. The money market was dominated by transactions in the inter-bank funds market, and the capital market recovered significantly. The Federal Government's fiscal operations resulted in a larger deficit than the previous year, with a decline in GDP ratio. Public debt outstanding increased substantially by 58% over the 1991 level. The domestic economy grew moderately, but problems of unemployment and low-capacity utilization in the industrial sector persisted. Inflationary pressures accelerated due to rapid growth in aggregate demand and rising production costs. Rural development was facilitated by the Department of Food Roads and Rural Infrastructure (DFRRI) and the Better Life Programme (BLP), which completed rural feeder roads, improved water and electricity supply, and increased supplies of improved fruit seedlings, arable crop seeds, and fish fingerlings. Nigeria's external sector performance deteriorated in 1992, with the overall balance of payments position swinging into a deficit. However, the current account position remained impressive with a much larger surplus compared to 1991.In 1992, industrial countries experienced moderated inflation due to economic slowdowns and tight monetary and fiscal policies. However, developing countries experienced mixed price developments due to wage increases and price deregulation. The Central and Eastern European Countries and the former Soviet Union experienced hyper-inflation due to price deregulation and lack of monetary and fiscal discipline. World trade expansion was sustained, with industrial countries' total trade value rising by 4.3% over 1991. Inflation in major foreign exchange markets persisted due to long-drawn recessionary trends, fiscal imbalances, exchange rate misalignment, weak financial sector, and sluggish economic growth. The International Monetary Fund provided financial assistance to countries with external debt and balance of payments problems. The Central Bank of Nigeria (CBN) issued and allocated stabilization securities to commercial and merchant banks, resulting in a net operating surplus of N6.966.1 million. The bank continued to undertake policy reforms to make the Foreign Exchange Market more efficient and responsive to the underlying macroeconomic environment.

First Page

1

Last Page

173

Publication Date

12-31-1992

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