FOREIGN EXCHANGE MANAGEMENT UNDER NIGERIA'S STRUCTURAL ADJUSTMENT PROGRAMME
FOREIGN EXCHANGE MANAGEMENT UNDER NIGERIA'S STRUCTURAL ADJUSTMENT PROGRAMME
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Date
1996-06
Authors
AGEBES, OJOBO JAMES
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Abstract
ABSTRACT
This study was undertaken in the Central Bank of Nigeria to examine foreign
exchange mangement in the country since the introduction of the Structural
Adjustment Programme (SAP) in 1986.
The subjects of study were three hundred (300) staff randomly drawn from the
headquarter and all the branches nationwide. The researcher also made use of
questionnaires, interviews, personal observation and documentary sources in
collecting data for this study.
The major findings of this study include the inability of exchange control
measures adopted before the commencement of SAP to turn around the external sector
of the economy, especially since 1982 when Nigeria started to experience serious
foreign exchange problems.
In an attempt to correct the serious disequilibrium in the external sector of the
economy and evolve a more rational basis for foreign exchange management, the
control system was replaced with a market based system with the introduction of the
Structural Adjustment Programme in July 1986. Under the programme, exchange
rate for the nairi is now determined through an auction system based on market
forces.
The study revealed that the main achievements of the new system are the
elimination of payment arrears that proved difficult to tackle during the exchange
control era. the increase in domestic capacity utilisation due to the increased local
sourcing of raw materials, elimination of the over-valuation of the Naira exchange
rate, improvement in the composition of non-oil exports and relatively more relaxed
atmosphere for foreign exchange management.
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The study also revealed that the problems of foreign exchange inadequacy,
dependence on the oil sector for foreign exchange earnings, continuous depreciation
of the naira exchange rate and the attendant inflationary expectations are yet to be
resolved.
In order to find solutions to some of the problems, the exchange rate for the
naira should be determined within a band to ensure stability while still relying on
market forces; demand management policis should continue to be restrictive to
achieve stability in the short run while supply side measures to increase foreign
exchange receipt should be pursued as both a medium and long term objectives.
Description
DEPARTMENT OF BUSINESS ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA.
Keywords
FOREIGN,, EXCHANGE,, MANAGEMENT,, UNDER,, NIGERIA'S,, STRUCTURAL,, ADJUSTMENT,, PROGRAMME.