Document Type

Annual Report

Publication Title

Central Bank of Nigeria Annual Report and Statement of Accounts

Abstract

In 1997, Nigeria experienced its third consecutive year of macroeconomic stability, resulting in modest improvement in domestic output growth and a persistently low inflation rate. The balance of payments position showed a modest surplus, and significant success was achieved in reducing domestic liquidity growth. Domestic output expanded further due to increased agricultural output and crude petroleum production, while the inflation rate declined further. Domestic output, measured by the Gross Domestic Product (GDP), increased by 3.8% in 1997, as against the average growth rate of 2.3% in the preceding three years. The fight against inflation was highly successful, reaching a single digit of 8.5%. Nigeria's external sector experienced a modest surplus in the overall balance of payments, largely due to an improved position of the capital account. The Federal Government's fiscal operations resulted in an overall operational deficit of N5,000.0 million, financed by the drawdown of accumulated surpluses of 1995 and 1996. Total federally-collected revenue increased by 12.0% to N582,811.1 million, largely due to favorable developments in the oil sector and increased receipts from non-oil sources. Monetary aggregates moderated considerably in 1997, with bank deposit and lending rates falling sharply due to the surge in domestic liquidity early in the year. The dual exchange rate regime was retained, and the spread between the AFEM intervention and parallel market exchange rates widened to 3.6% in 1997 from 2.0% in 1996. The West African Institute for Financial and Economic Management (WAIFEM) began capacity building within English-speaking countries, while the Economic Community of West African States (ECOWAS) and its supporting agencies, ECOWAS Central Banks, and the West African Monetary Agency (WAMA), made further efforts to strengthen economic performance and improve trade flow in the sub-region. The Central Bank of Nigeria faced challenges in macroeconomic management, particularly stemming the growth of domestic liquidity, enlargement of its supervisory purview to cover specialized financial institutions, unresolved banking sector distress, and managing the nation's scarce foreign exchange resources.

First Page

1

Last Page

198

Publication Date

12-31-1997

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