NIGERIA’S BALANCE OF PAYMENT
Nigeria’s balance of payment and foreign reserves have not been stable since its independence in 1960. At a time, surplus takes place, while at another period deficits occur and this has brought a lot of problems into the country.
During the oil boom of 1973 and 1974, for example, Nigeria had a favourable balance of payments position with a reasonable surplus of B1276.8 million and N3102.2 million respectively as a result of rises in oil price. The period of oil boom did not last long for in 1978, the price of crude oil slumped as a result of the oil glut that took place in the international oil market.
The oil glut reversed Nigeria’s balance of payments to a deficit of N1,293.6 million. This period was followed by balance of payments surplus between 1979 and 1980.
The civilian administration which came in between 1981 and 1983 brought Nigeria’s balance of payment to a deficit. In an effort to control the balance of payments deficit, the government introduced several policies such as Economic Stabilization, Structural Adjustment programme (SAP) with Second-tier Foreign Exchange market (SFEM) as its subsidiary.