"i ~~~~RESTRICTED

VILE t}fl Report No. AF- 1 7a

This report was prepared for use within the Bank and its affiliated organizations.They do not accept responsibility for its accuracy or completeness. The report maynot be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

CURRENT ECONOMIC POSITION

AND PROSPECTS

OF

NIGERIA

January 23, 1964

Department of OperationsAfrica

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EQUIVALENTS

Currency

Currency Unit: Nigerian Pound (h)

U.S. $1 = L0. 357 (7 shillings 2 pence Nigerian)

i1 = U.S. $2. 80

hL million = U.S. $2,800,000

Weights

All tonnages are expressed in long tons (2, 240 pounds).

1 long ton = 1. 12 short tons = 1.02 metric tons.

Fiscal Year

The fiscal year is April 1 to March 31.

C 01 T TS

BASIC DATA

MAPS

INTRODUCTION

SUI24ARY AND CONCLUSIONS

I. THE BACKGROUND ...................................... 1

II. THE NATIONAL DEVELOPMI'T PLAN: 1962-68.......... 3

Objectives, Priorities and Targets ............... h LThe Government Capital Programs ..... 5Financing . ....................................... 6Progress in 1962/3................... . ........ 8Prospoects . ...... . , , . .. ....... 10

III. THE ECONOIIY IPl 1961-3 ..... ............... . 11

Incomes, Wages and Prices . . . 11Public Finance . ......................... 12NIoney and Capital '-iarkets.. ......... .......... , 14External Trade and Payments . .. 17External Debt .............................. , 19

IV. THE lIAJOR ECONOMIC SECTORS. . .. 21

Agriculture ... ..... 21Livestock....... , 23Forestry ..... 23Fisheries .......................... oo . . . .. . .... 23'ining ......... .... ,,, .,.e.I..................... 23Industry ...... .... , ........... 2hTransport and Communications ...... . 26Electricity . ............ , ..,... - ....... 27Water Supplies ...... .. . .27

V. CREDITORTHINESS ... .. 28

STATISTICAL APPENDIX

ANNEX - Report on the National Development Plan, 1962-68 (separatevolume)

BASIC DATA

PopulationArea (millions)

Area and Population (s2uare miles) (mid-1963 estimates)

Eastern Nigeria 29,484 85,716Northern Nigeria 281,782 20,681Western Nigeria 30,454 )74o6IMiid-Western Nigeria 14,922 )Federal Territory L2 10

Total 37s213

Last census 1952/3. Estimated population growth rate, 2 percent per annum.

Gross Domestic Product 1960 (at market prices)£1,100 million ($3,000 million equivalent)

GDP per capita 1960. About £30 ($84 equivalent)

Gross Investment 1960. £168 million = 15 percent of GDP

Government Finance. Fiscal year ended iiarch 31, 1963

Federal Regional Total£ million

Current receipts 70 66 136Current expenditures 61 60 121Capital expenditures 35 29 64

External Trade 1962

Exports £ million percent Imports £ million percent

Groundnuts and products hi 24 Miachinery and vehicles 48 24Cocoa 33 20 Food and beverages 28 13Palm products 26 15 Textiles 24 12Petroleum 17 10 Petroleum oils 13 7Rubber 11 7 Chemicals 12 6Tin 7 4 Clothing and footwear 8 4Cotton and cottonseed 7 h Constructional steel 7 4All exports 169 100 All imports 203 100

Balance of Payments 1962 Public External Debt 1963

£ million £ millionIrnports (cif) 20Exports (fob) 167Invisibles (net) -23 At June 30 1963 67.5Current deficit -61 Reported additions 15.4

External Assets Sentemiber 30, 1963 £ million

Governments, Federal and Regional 20Central Bank 69Semi-official 14Commercial banks (net) 2

Total 107

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INTRODUCTION

This report brings up to date the information in the reportentitled "The Economy of Nigeria' dated November 14, 1961 (EA 127a). Itis based mainly on information gathered in Nigeria in l1arch and April 1963.

SUMMRY AND CONCLUSIONS

1. One of the outstanding features of Nigeria is the low average in-come level: the per capita income is about £30 ($85) a year. Neverthelessthe economy is based on solid foundations, The country has a generous en-dowment of natural resources, exports are fairly well diversified, and rapidindustrialization is adding variety to production and providing import sub-stitutes. The infrastructure has been built up to impressive levels but hasbeen outgrown by the demands of an expanding economy. The fiscal and mone-tary policies followed by the Government have in general been sound andsensible. The average growth rate in the past decade has been good, buthas recently been somewhat spoiled by the effects of falling prices for mostmajor exports.

2. A further decline in export prices is forecast and will be one ofthe many and difficult problems ahead of Nigeria in its vigorous efforts todevelop. In the light of the expected adverse movements in the terms oftrade and increasing import demands, the external reserves are now no morethan adequate. Rising recurrent expenditures are making it more and moreof a problem to provide surpluses for development financing, but more couldbe done to contain the increases. The low prevailing level of incomes makesthe generation of domestic savings and revenues difficult. There is a seriousshortage of the skills needed to prepare and implement development programs.

3. The determination to develop on sound economic lines is apparentthroughout Nigeria. The country is now in the second year of a NationalDevelopment Plan which, for the first time in Nigeria, sets out nationalobjectives and coordinates the several government capital programs withina consistent framework for the development of the economy as a whole. Itcan now be seen that the intended capital expenditures of the Governmentshave grown too large. There is a real danger that unless they are reducedthey will take too much away from private investment upon which rests amajor share of the responsibility for the successful implementation of thePlan.

4. The Plan has started slowly. Government capital expenditureshave been much below the planned average rate, but the shortfall has notbeen uniformly distributed. Expenditures on social, defense and adminis-trative projects have been too high, and not enough has been spent ondirectly productive projects, the infrastructure needed for economic growth,and technical education. The effects of public investment in 1962-4 ongrowth, income generation and revenues are therefore not likely to be asgreat as forecast, while the resultant increases in recurrent expendituresare likely to be greater. Nevertheless, there is time to restore thebalance of government capital programs and, with increased reliance onprivate investment, to achieve the planned growth targets. Much less ex-ternal finance has been received than was postulated in the Plan, and theuse of domestic resources has been heavier than intended. There has not,therefore, been the conservation of domestic resources or the relief tothe balance of payments that might be expected with the lower rate ofcapital expenditure; and Nigeria will have more difficulty than was en-visaged in providing the domestic counterpart to external aid in the fu-ture. The Plan as a whole has already proved of great value in definingdevelopment problems and compelling rational solutions to them.

- ii -

5. Until quite recently Nigeria financed the greater part of its

capital expenditures from domestic savings, taking advantage of favorable

export prices. With the fall in prices, savings are no longer adequate

for the task and additional taxation revenues are limited by the necessityto avoid disincentives to private enterprise. The country's justifiable

need for external assistance is thus, both absolutely and proportionately,

much greater than in the past. The present level of external debt is rel-

atively low, but Nigeria cannot undertake to borrow on conventional terms

the full amount of capital that it can put to fruitful use. If the whole

of the capital required were borrowed on conventional terms, debt service

payments would rise by 1967/8 to about 13-17 percent of export earnings,which would clearly be too much for Nigeria to handle. The satisfactoryeconomic performance and development effort, together with the low averagelevel of incomes, support the case for making available to Nigeria substan-tial external assistance in the form of grants or loans on very easy terms.

I. THE BACKGROUND

1. The Federal Republic of Nigeria lies in the tropical rain forest

and Guinea savannah zones of West Africa. It has an area of 357,000 square

miles, and its population of some 40 million;/ is much the largest in Africa.

Nigeria now comprises four Regions, Eastern, Mid-Western, Northern and Western

Nigeria, and the Federal Territory of Lagos.

2. The political division of Nigeria to some extent reflects the

ethnic and physical divisions of the country. The largest Region, Northern

Nigeria, ranges from dry savannah land in the north to a transitional

climatic zone along the Niger and Benue rivers in the south. It is peopled

mainly by Hiuslim Hausa, Fulani and Kanuri tribes who have retained much oftheir traditional culture. The three southern Regions lie in the rainforest area: they have been much more exposed to European influences thanthe North. The East is the most densely populated, largely by Ibo andIbibio peoples. Western NJigeria is peopled by the towJn-dwelling Yorubas:and the new Region of Mid-WJestern Nigeria contains the former minority

groups of the Wiest, the Edos, Urhobos, Ibos, Ijaws and others.

3. Nigeria has an abundant supp2.y of potentially productive land;

water and forest reserves, and its economy is based upon them. Agricul-ture provides one-half the gross domestic product, supports three-quartersof the population and supplies about 80 percent of the country's exports.Almost all Nigeria's food reqluirements are domestically produced, and

although food production is the main element in GDP, progress away from

a subsistence economy has been such that probably less than one-fifth of

GDP is now consumed directly by producers. Knowledge of how best to

exploit the country's resources is not yet fully available, production

techniques are backward, productivity is low, and the means to increase

production are inadequate; the potential for increasE.output is consider-able. Agriculture is fairly well diversified nationally but less so re-gionally. Food crops are grown throughout the country with an increasing

trade in produce between areas. Export and industrial crops tend to be

concentrated in Regions: palm products in the Epst and West; timber and

rubber in the i1id-W1est, cotton and groundnuts in the North; and cocoa in

the West.

4. The country has moderately good mineral resources. Tin, colum-

bite and coal have long made useful contributions to the economy, and

petroleum is rapidly becoming an important export. Manufacturing industry

is still small in relation to GD? but has been developing at a great pace.

The larger industrial enterprises have been established mainly with foreign

capital, but small industries have been developed largely by Nigerians.

Raw materials are abundant, the labor force is industrious, intelligent and

adaptable, although skills and experience are scarce, and there is a poten-

tially large domestic market. There has been an impressive achievement in

1/ A census taken in 1962/3 was rejected for reasons of unreliability: a

new census is now being taken, but the results will not be available for

some time.

- 2 -

providing basic services in recent years, but most have not yet caught upwith the demands of economic expansion and the present infrastructure isinadequate as a base for further growth.

5. Productivity and incomes are low, the average per capita incomebeing solne £30 ($84), and Nigeria cannot yet generate internally sufficientsavings to promote an adequate growth rate. Mloreover, export earnings, al-though capable of improvement, are inadequate for irmport requirements ifthe economy is to develop. A growing amount of import substitution is pos-sible, but the external reserves built up in the past from favorable exportprices are now equivalent to only six months imports and can no longer be re-lied upon to finance the projected balance of payments deficits.6. TwJo important constitutional changes have been made recently. OnOctober 1, 1963, Nigeria; which became an independent state exactly threeyears earlier, became a Republic within the Commonjealth. A President re-places the Queen as head of state, and the right of appeal to the JudicialCommittee of the Privy Council has been ended, othernise the new constitu-tion is similar to that previously in force. .he second change concernsthe formation of the new Region of Mid-`Jestern Nigeria from the Delta andBenin provinces of Western Nigeria, following a referendum in July 1963.Initially the Region is being governed by Administrators appointed by theFederal Government: elections are due earlythis -ear and it is expectedto have its own elected Government by February 1964. The formation of thenew Region involves the political transfer of one-third of the area and aquarter of the population of Western Nigeria.

7. Nigeria's major political parties each originated in one of theRegions: The Northern People's Congress (NPC) in the North, the ActionGroup (AG) and the United People's Party (UPP) in the iest, and the Nation-al Convention of Nigerian Citizens (NCINC) in the East. The AG andNCNC in particular have attempted to become national parties. The FederalGovernment is a coalition of NPC, NCNC and UPP, with AG in opposition.NCNIC controls the Government of Eastern Nigeria and NPC that of the Nlorth.The West is governed by a coalition of UPP and NCNC, with the AG formingthe opposition. Political alignments in +he mia-WJbt are still fluid...

8. Early in 1962 the AG, then the ruling party in Western Nigeriaand the opposition in the Federal Parliament, was split by dissensinn inits leadership. Disturbances in the Regional legislature led to a sus-pension of the Government, a state of emergency and the appointment ofFederal Administrators. Normal Government was restored in January 1963,with one section of the AG now formed into the new United People's Partyand governing in coalition with the former Regional opposition, the NCMC:the AG became the opposition. A commission of enquiry meeting in 1962 chargedthat there had been mismanagement of the public funds of the Region'sdevelopment agencies and marketing board; judicial action on the chargesis pending. The troubles of the AG have been further compounded by theconviction of a substantial part of its leadership on treasonable felonyand related charges. Lengthy sentences were imposed and appeals are pend-ing. The validity of the Regional Premier's appointinent has been questioned,

- 3 -

and there has been much negotiation between the three major parties on pos-

sible coalitions.

9. A census taken in 1962/63 was rejected on grounds of unreliabiliti.The census has an important bearing on the distribution of parliamentary rep-

resentation and therefore on which Regions and which parties will dominate the

Federal Government. Federal elections are due next year, and a change in dis-

tribution could upset the present balance of power, A new census is presently

being conducted with inter-Regional supervision.

10. Despite the political upsets in the past two years, the political

climate has remained quite calm and there have been no significant manifesta-

tions of popular discontent. Political rivalries are strong, party relation-

ships are confused, and the parties themselves are based essentially on Re-

gional and tribal loyalties. In such circumstances, political stability is

not easy to maintain. Nevertheless, the unity of the Federation does not

appear to be in any immediate danger.

II. THE NATIONAL DEVELOPMENT PlAN: 1962-68

11i Nigeria's first National Development Plan, covering the six years

1962/63-1967/68 came into effect in April 1962. It marks the first attempt

to set out national development objectives and to coordinate Federal and

Regional capital programs within a framework of national accounts projections,The Plan postulates an annual rate of h percent for the growth of GDP, annualgross fixed investment of 15 percent of GDP and Government capital expendi-

tures of £654 million over the six-year period.

12. The Plan was prepared by a small group of experts in the several

planning units, working in cooperation with the executive and financial de-partments, in little more than a year. Much essential basic information

was lacking or poor in quality and frequent recourse to informed guesses was

necessary. In view of the shortages of time and staff a conscious decision

was taken to concentrate on overall objectives, targets, policies and

programs in the cointext of an economic framework outlining forecast develop-ments in the years to 1968. This decision inevitably prevented sufficientattention being given to the preparation of sector programs and individual

projects: it can now be seen that had time been allowed for this many sub-

sequent problems might have been avoided.

Objectives, Priorities and Targets

13. The National Plan was conceived as the first of a series of three

or four plans which could carry Nigeria to self-sustaining economic growth

and economic independence. It therefore gives most emphasis to measures

likely to lead to a rapid increase in the volume of domestic resources avail-

able for future investment. The highest priority is given to expanded pro-

duction and increased productivity in agriculture and industry. The Plan

recognizes that these cannot be achieved by direct investment alone and gives

high priority also to technical and vocational education, and to the develop-

ment of basic public services. The role of the private sector as the most

effective channel for rapidly increasing domestic resources is also recog-

nized, and the Plan is concerned to ensure that it should be enabled to de-

velop to the fullest extent possible. A lesser priority attaches to proj-

ects not offering an economic return and to the many otherwise desirable

improvements in health, welfare, education and other public services.

14. The planning authorities made a careful assessment of the resources,

internal and external, likely to be available to Nigeria in 1962-8 and pre-

pared a set of national accounts projections covering this period to serve

as framework for the Plan and as a consistency test. Gross domestic prod-

uct was assumed to grow at 4 percent a year, compound, and it was further

assumed that this rate of growth could be achieved if gross fixed invest-

ment were at the rate of 15 percent of GDP annually; but only if the pro-

portion of investment going to directly productive projects were to be in-

creased and given priority in time. Private consumption was to be allowed

to increase by only 2.8 percent a year (less than 1 percent per capita)

while government consumption would rise by 57 percent during the plan period.The import surplus1< to be financed by public and private capital inflows,was expected to average 6 percent of GDP. Gross domestic savings were pro-jected as 10.3 percent of GDP.

15. Given the lack of time, staff and data available, the preparationof the overall planning framework and projections was a considerable achieve-ment. The targets set were not overambitious and may still be realized.

Inevitably, with changing economic circumstances and better information,

weaknesses in the basic calculations and assumptions have been displayedunderlining the need for them to be kept under continuous review. However,planning staff effort should not be diverted at this stage from the morepressing tasks of sector programming and project preparation.

16. The planning authorities were aware that the size of public in-

vestment should be limited as much by the level of taxation that could be

imposed withou1 inhibiting private endeavor as by executive capacity and

the inflow of external assistance. Nevertheless, in the division of plannedcapital formation between the public and private sectors, private invest-

ment was treated as a residual item after providing for government capitalprograms of £654 million and other public investment which brought thetotal of public capital formation to £794 million. Private investment,

set at a total of £390 million, was projected at a lower rate than in re-cent years and below the rate that might reasonably be expected in the plan

period.

1/ Including external debt service.

- 5-

The Government Capital Programs

17. The capital expenditure programs of the Governments and statutorycorporations as set forth in the Plan amounted to £654 million, after deduc-tion of assumed underspending.

£ million

Federal Government program 234Federal Statutory Corporations 173Eastern Nigeria program 68Northern NIigeria program 89Western Nigeria program 90Total Government programs -757

The average annual rate of expenditure implied was £106 million (net ofinter-government transfers), compared with a previous peak level of £80million.

18. The subsequent addition of new proJects, a greater volume thanforeseen of uncompleted projects carried over from earlier plans, andundercosting of projects in the Plan, have now raised the total cost towell over £700 million. Government capital expenditures are expected tototal only some £176 million in the two years 1962-4, which would leavesome £550-600 million for the remaining four years. The Governmentsclearly cannot hope to undertake programs of this magnitude, implementa-tion of which would depress private consumption and hold private invest-ment much below the possible level. Since the Plan requires the maximumallocation of resources to investment yielding high and quick returns,private investment must be allowed to expand as much as possible ratherthan be restricted. Moreover, the executive capacity of the Governmentsinposes limitations on the capital expenditures that can usefully be madeif they adhere to the objectives and priorities of the Plan. There areacute shortages of professional and technical skills, more especially inthe priority sectors, and although strenuous efforts are being made toremedy manpowier deficiencies these will restrict possible expendituresfor some time to come. It is believed that prograris of £600-660million or so over the plan period would, however, be feasible; thiswould entail capital expenditures of £420-Eh80 mlillion in 196h-8.

19. Rapidly falling export prices, together with the concentrationof public investment on infrastructure and social projects in the previousplan period had reduced the rate of growth of GDP from 6 percent in theearly 1950's to 2 percent in the late 1950's. The planning authoritiestherefore decided that in order to sustain the average growth rate of theprevious decade (4 percent) with gross fixed investment at 15 percent ofGDP it would be necessary to ensure that priority in the allocation of re-sources should go to projects giving the highest and quickest returns andthat these projects should also have priority in time. The sectoral alloca-tions of government expenditures in the Plan were therefore markedly dif-ferent from those of the previous programs;

-6 -

1955-62 1962-681/b million Percent L million Percent

Primary production 19 5 92 14Trade and industry 11 3 90 13Electricity 22 6 102 15Transportation 121 34 144 21Communications 15 4 30 4Water supplies 17 5 2 4Education 24 7 70 10Health 11 3 18 3Other 110 31 107 16

Total 351 100 677 100

21 Before allowance for underspending.

The increased importance attached to agriculture and industry is obvious inthe figures: these sectors must clearly have the highest priority in orderto generate incomes and savings for future investment. However, it is doubt-ful if extension services and other facilities can be expanded quickly enoughto permit expenditures of 490 million on agriculture during the plan period.The highest priorities within the agricultural sector, broadly the develop-ment of peasant agriculture, are heavily dependent on extension and othergovernment provided services. The large allocation to industry represents inpart the use of scarce government resources for excessive participation innew enterprises. Infrastructure allocations reflect the continuing need forheavy investment in this sector, to support agriculture and industry, if theeconomy is to grow as planned. The amount provided for Electricity includesalmost b70 million for the Kainji Dam hydroelectric project, much the largestproject in the Plan. The increased allocation to the educational sectorfollows the priority given to it in the Plan but may involve too great aburden of recurrent costs for Nigeria to sustain.

20. The increased total cost of the programs, the need to keep expendi-tures below the planned level and the undercosting of projects have destroyedthe validity of the original sector allocations. A recalculation of projectcost/benefit ratios and a reassessment of project priorities within sectorsare necessary before revised sector allocations can be determined. In fact,a reassessment of priorities is constantly being made, to some extent, asindividual projects or programs are appraised for financing.

Financing

21. Domestic resources for the government programs as shown in the Plantotal b263 million. Foreign loans and grants were assumed to provide 50 per-cent of the total finance required, b327 million, leaving an uncovered gap of664 million to be filled by economies in recurrent expenditures and by othermeans. The structure of the economy and the need to avoid disincentives toprivate savings and investment limit the scope for increasing taxation reve-nues. There is some room for increased tax rates, however, as well as forsome new taxes, and further contributions to revenues could be secured by im-proved tax collection and by putting more government services on a self-sup-porting basis. It might help to ensure funds for development if the risingrevenues from petroleum were assigned directly to the capital budgets ratherthan treated as recurrent revenues. Nevertheless, the main source of recur-rent surpluses must be drastic reductions in government current expenditures.

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If these can be made, it is possible that, together with the resourcesgenerated by the statutory corporations and marketing boards, and newinternal borrowing, the Governments might raise internally up to L330million for their programs without inhibiting private investment.

22. A preliminary assessment of the external funds so far offered forprojects in the Plan by Governments and international institutions, includes:

l millionU.S.A.-/ 80U.K. 21Germany 9Netherlands 2Switzerland 2Canada 5I.B.R.D. 5

Total 124

1/ Including technical assistance.

Offers of assistance from Eastern European countries are believed to total119 mil'lion. Nigeria had undrawn balances of earlier loans amounting toT6 million at the beginning of the Plan period, and has since negotiated some1,4 million in short-term credits. Altogether, about -150 million is atpresent available or on offer for the financing of the Plan (excluding U.S.technical assistance grants).

23 It is reasonably certain that additional offers of aid will be made.For example, the Bank and IDA together are presently considering loans andcredits amounting to some L50 million, and this, together with other pros-pects, could well bring the total assistance available to b280 million. Theindications are that the element of "soft" loans and grants in this amountwill not exceed b90-110 million, which would leave a balance of b170-190million to be found in the form of conventional loans. However, Nigeriaprobably should not borrow as much as this on conventional terms in the planperiod: it would therefore appear that the assistance likely to be availableand acceptable might be not more than b260 million. Resource availabilitywould thus indicate that total government capital expenditures should notexceed L550-600 million in 1962-8:

b million

Budget surpluses 75Other revenues 10Use of reserves 46Statutory corporations 75Marketing boards 45Central Bank 30Domestic borrowing 50

Total internal resources 330

Assumed external assistance 260

590

- 8 -

24. Data on private investment in recent years are sketchy and unre-liable, but indicate that it has increased rapidly from £h6 million in1954 to £73 million in 1960 and to about £80 million in 1962. Domesticprivate investment has probably been of the order of £50 million a yearrecently, and can be expected at least to continue at that level, givinga total of £300 million or so for the plan period. The private capitalinflow has also increased rapidly, and is currently close to £30 milliona year. Planned investment in oil exploration and production alone is£140 million for the plan period, and if other private foreign investmentmerely continues at present levels, the total capital inflow in 1962-8should easily reach £220 million. If private investment is not restrictedby overlarge government claims on resources, it could amount to £500 mil-lion or so in the plan period, rather than the £390 million projected inthe Plan.

25. The Plan's balance of payments projections showed a total cur-rent account deficit, including external debt service payments, of £h80million to be financed entirely by public and private capital inflows.A review of the conponents of the projections suggests a total deficitof £500 million; the capital inflows which now seem lillely, together withthe use of reserves which has already taken place, wiould cover this def-icit. This supposes, however, that some external aid would be availablefor some local cost financing in the government programs, both to meetthe capital needs and to cover the foreign exchange gap.

Proress in 1962/3

26. Although GDP probably did not rise significantly in 1962/3, thiscould not be ascribed to any failure of the Plan: there was some improve-ment in economic conditions in the latter part of the year which shouldpersist through 1963/4. Private investment was appreciably higher thanthe annual average forecast in the Plan, but, as government investmentwas lowyer, gross fixed investment was some £10-20 million below the targetfigure.

27. The annual average rate of government capital expendi-ture requiredby the Plan is £106 million: in the first year provisional actual expendi-tures were £74 million (excluding Federal transfers to Regions). This wasa fair achievement for the beginning of a new program, and only a littlebelow the peak level of 1960/1. However, it was only possible because ofthe large carry-over of projects from earlier plans. Failure to bringnew projects to a state of readiness, delays in securing external assist-ance, and financial and political problems in Western Niigeria were the mainreasorswhy expenditures were so far below the required average rate.

28. The direction of expenditure in 1962/3 was much less satisfactorythan the amount:

1962-68 1962/3 1963/hPlan totals Revised estimates Estimates

£ million Percent £ million Percent £ million Percent

Expenditures917 / 141.1/ 1/

Prinary production 91. i 11.2 12 11.1 7 10Trade and industry 90.3 13 5.2 6 9.3 8Electricity 101.7 15 5.9 6 12.6 11

Transport 1h3.8 21 28.3 30 32.8 29Communications 30.0 h 2.7 3 1.h 1Water supplies 2h.311 4 4.8 5 6.h1/ 6Education 69.81- 10 7.1 8 11.0- 10Health 18.2 3 2.8 3 1.8 2Defense 29.7 h 6.2 7 9.6 8Other 77.3 11 19.h 21 18.9 16

Total 676.8 100 93.6 100 114.9 100

Less underspending -23.0 - -15.4 - -21.8 -

Plus revotes - - - - 13.0 _

Total 653.8 78.2 - 106.1

T7ilncluding Federal grants to Regions.

The Plan requires that investmrent in the directly productive sectors should

have priority in time as well as in claim on resources; but this was not

the case in 1962/3. As a result of the preponderance of projects carried

over, expenditures reflected past rather than planned investment patterns and

a disturbingly large proportion was devoted to social, administrative anddefense projects. The priority sectors, especially agriculture and tech-

nical education, received much less than the intended investment. The ef-

fects of this distortion of the priorities envisaged in the Plan will be

a tendency for recurrent costs to rise faster than planned and for incomes

and revenues to rise more slowly. The latter effect, however, should be

largely offset by the rate of private investment being higher than postu-

lated in the Plan.

29. The Plan assumption that 50 percent of the governnent programswould be financed from external sources was not realized in 1962/3. Only

£14 million of foreign loans and grants was received, less than 20 percent

of capital expenditures. The Governments therefore used far more of theavailable domestic resources than had been intended. To some extent this

wias justified, since external assistance is not normally available for

jork in progress; but sorme new projects which might have oualified for

external aid wrere financed from domestic resources, and some continuing

projects could have been deferred.

- 10 -

Prospects

30. Government capital expenditures are expected to rise to £102 mil-

lion this year and gross fixed investment might well exceed the planned total

of £187 million. Considerable effort has gone into project preparation in

the past year or so, but the greater part of currently available domestic

resources are comrmitted to continuing projects and it ill not be until

1964/5 and later that the balance of the government programs can be restored.

If the Plan targets are to be achieved, there must be a reater dependence

on private investment to generate incomes and revenues while the Government

programs must be both restricted as to size end concentrated on projects

leading directly or indirectly to high economic returns.

31. The Governments hope to receive some £30 rillion in external as-

sistance in 1963/4, but this will cover less than 30 percent of proposed

expenditures. Domestic resources are therefore being used up more ouickly

than intended: current budget surpluses will provide 43 percent more inthe first twro years of the Plan than they were assumed to provide over the

six-year period, all but £5 million of the assumed cash balances will have

been used, and there will have been a heavy drain on the domestic borrow-

ing capacity envisaged in the Plan. Nigeria will hencefonrard have much

greater difficulty than was foreseen in providing domestic resources ascounterpart to foreign aid. The creation of the new Mid-Ilestern Region

will inevitably increase recurrent and unplanned capital outlays and so

make it more difficult to find resources for development programs. It

wrill nowi be necessary to generate much larger budgeti surpluses to com-

pensate for the early use of accumulated reserves; with tax revenue in-

crea3es limited by the economic structure and by the need to avoid dis-

incentives to the private sector, these surpluses must come largely from

a drastic attack on current expenditures. External finance to the fullextent possible must now be sought for every eligible project.

32. The increased and urgflent tasks of the executive departmentsresponsible for the implementation of the priority sectors of the pro-

grarmis require that renewed efforts should be made to recruit additionalexpertise, which must cnme mainly from overseas, and to train Nigerian person-

nel. This is especially necessary in respect of professional staff to prepare

and evaluate projects, and to determine sectoral priorities and allocations.

33. In qiuantitative terms the Plan has got away to a slow start.

But there appears to be still time for the targets to be achieved if

the Governments have the will to talce the necessary steps and can carry

the Nligerian people with them. In the period since the Plan was in-

troduced there has been an encouraging increase in the realism of the

Government approaclh to development. Iiany new policies and measures have

been introduced to restore the Plan to its original intent and objectives.If these attitudes are maintained, the appropriate policies vigorously

applied and political stability continues, then there is every hope that

the Plan, iwith the modifications indicated, can be successfully implemented.

The Plan itself deserves much credit for throwing government policies into

relief and compelling rational decisions and actions. In this, and in

other respects it has already proved of great value to Nigeria.

- 11 -

III. TIE ECONOMY INq 1961-3

Incomes, Wlages and Prices

34. The year 1960 sawr some recovery in the rate of increase in Gross

Domestic Product, which had been about 6 percent in the early 1950's but,

consequent upon the decline in export prices, had averaged only 2 percent

in the second half of the decade. There are no national income statistics

for the past twro years, and only tentative data for 1958-60, but the

evidence sugEests that in 1961 a high-level of activity was sustained for

much of the year. Agricultural production was high in the 1960/1 crop

year and more than offset the sharp fall in commodity prices: Marketing

Board payments to producers of the major export crops increased by more

than 10 percent. i-lineral production was also higher than in the previous

year, whilst the output of domestic manufacturing industry continued to

expand rapidly. Building and construction activities appear to have

reached record levels, and the service industries and food production are

assumed to have kept pace. Government investment was a little below the

peak level of 1960/1 but this seems to have been offset by a rise in

private investment. Private consumption expenditures probably increased

and government consumption certainly did so. Imports surpassed the pre-

vious year's record.

35. Before the end of 1961, however, the economy ran into difficulties

which persisted through most of 1962. Production of eXport crops showed

mixed results, with major reductions in paLn products and cotton more than

counterbalancing increases in groundnuts and cocoa. World prices further

declined and mar}eting board prices to producers were considerably re-

duced. To this depression of consumer purchasing power twas added a sub-

stantial burden of new taxation, and with the running dowm of the pre-

vious year's inventory accumulations, internal and external trade werebelowr normal. IJestern Nigeria was affected by political problems, as

well as by the fall in cocoa prices, and government investment dropped

sharply. Eastern Nigeria suffered from the reduced volume and value of

palm products. Public investment as a whole showied no increase on the

1961/2 level and private investment seemed not to increase at the former

rate. Industrial output continued to expand, although perhaps at a

slightly reduced pace. Construction activity was maintained at a high

level, and tin and petroleum production increased. It is very doubtful

if GDP increased even in monetary terms, and real domestic product almost

certainly fell. A reduction in private consumption is indicated and is

reflected in the significant reduction in consumer goods imports.

36. Towards the end of the year, there were signs of an upturn in

the economy and the improvement in economic conditions has continued into

1963. Production of most major crops increased substantially in the

1962/3 season: a drop in cocoa production has been accompanied by an

improvement in prices, and prices for some other major exports have risen

coincidentally with output. The marlceting boards made further cuts in

- 12 -

producer prices for a number of crops, so that the benefits were not entirelypassed on to farmers. Industrial output is believed to have doubled between1960 and 1962, but it is still less than 3 percent of GDP. Government invest-ment is expected to show a marked increase this year and there is no sign ofa slackening in private investment. The outlook for the 1963/4 crop seasonis good.

37. Nigerian consumer prices indices are not a reliable guide to gen-eral price movements within the economy as a trhole. They are based on smallsamples, relate to a few major cities and are not seasonally adjusted. Until1960 the avera,e annual increase had been less than three percent, but in1961 the unweighted average increase was almost 6 percent and in 1962 itwas 10 percent. In general, price rises have followed the wage increasesof 1959/60 and tax increases in 1960 and 1962. Since the mid-1962 peak,following increased import duties, consumer price indices have declinedand in Ilay 1963 were mostly about 7 percent below the level of ilay 1962.It would appear that the inflationary influences of public sector deficitfinancing and a rapid rise in the volume of commercial bank credit to theprivate sector have been largely offset by declining farm incomes, slightlylower public investment, the shift in short-term borrowing to Nigeria andthe drawzing down of foreign exchange reserves.

38. Wage movements tend to follow government salaries, and thesehave not been increased since 1959/60. The Government's policy is toresist both public and private sector increases except where justifiedbyv inproved productivity. lHages have remained fairly stable since 1960,but there is growring pressure for increases and the Government has re-cent:1y initiated an enquiry into the present wage structure.

Public Finance

39. The recurrent expenditures of the Federal and Regional Govern-ments have been rising rather faster than current revenues in recent years,resulting in an accelerated diminution of the budEet surpluses availablefor development financing:

£ millionL955/6 1961/2 1962/3 1963/h

Revisedestimates Estimates

Recurrent revenuesImport and excise duties 31 63 70 75Export duties and produce taxes 15 13 14 13Direct taxes 8 15 16 17Other 12 40 36 8

Total 7 131 7 143

Recurrent expenditures 53 110 121 135Current surplus 13 22 7 8Capital expenditures 16 60 64 81Overall deficit -3 -39 7 -72

- 13 -

Past development expenditures have been mainly concentrated on infrastructure

and the social sector, and the effects of this on recurrent costs are now

becoming apparent. Government development services, such as agricultural

extension, financed from the current budget have also been increasing, and

there has been the inevitable rise in costs associated with the added respon-

sibilities of a newly-independent nation. The recurrent costs of education

have become a heavy and increasing burden, especially to the Regions, and

defense and security expenditures are also rising appreciably. All the

1Nigerian Governments realize the necessity to restrain the upsurge of recur-

rent expenditures, and some steps have been taken to do so, or are in con-

templation. These should help to arrest the increase but are not yet suf-

ficient to generate the surpluses Niigeria will need in the coming years,

and which must be obtained primarily by expenditure economies since poten-

tial revenue increases are limited.

4o. Current revenues have risen from 8 percent to about 12 percent

of total GDP, or about 15 percent of monetary GDP. The tax burden is thus

moderately heavy, but still below that of many other African countries.

There are in addition substantial current revenues of local authorities

and the important contribution to development financing made from the cur-

rent surpluses of the marketing boards and the profits of the statutory

corporations. Together these sources provided some £35 million in 1962/3,

a further 3 percent of GDP, and should do better in the future. Import

duties, which provide almost half Nigeria's current revenues, have been

imposed primarily for revenue purposes. They were increased considerably

in 1960 and 1962; in the latter year the increases were also intended to

curb consumer imports. Yields from import and export duties will be af-

fected by import substitution and declining commodity prices, respectively,

The rate of company taxation is already 40 percent and cannot be increased

without discouragement to private investment: revenues from this source

are at present much affected by exemptions awarded to new enterprises.

Personal income taxes are difficult to apply and collect: pay-as-you-earn

schemes have been introduced and rates have been increased in the last two

years. There is still room for some further increases, but improvements

in assessment and collection, for which there is ample scope, offer better

prospects than higher tax rates and would be less discriminatory. Excise

taxes, at present applied only to beer, tobacco, matches and mineral waters,

together with increased charges for public services, offer the most promis-

ing field for new revenue sources. Petroleum exports are expected to in-

crease sharply over the next five years, and as a result rents, royalties

and taxes should double, or even treble, by 1968. This would more than

offset the loss of the once-for-all capital payments for licenses and leases

which heavily inflated total receipts from petroleum companies in 1961-3.

hl4 Government capital expenditures increased rapidly in the late

1950's as large development plans were implemented: subsequently, however,

with the completion of planned projects, delays in completing others, and

slow progress in preparing new projects, the level of capital expenditure

fell slightly. Budget estimates for 1963/4 indicate a rise of almost a

third in capital expenditures. In the latter half of the 1950's it was

- 14 -

possible to finance more than a third of government development expenditures

from current surpluses: the overall deficits were largely covered by run-ning down the considerable external reserves and cash balances of governments

and marketing boards. Foreign loans and grants were only necessary to cover

15 percent of capital expenditure in 1955-62. In 1961/2 and 1962/3 furtherextensive use was made of reserves, and domestic borrowTing became more im-

portant (much of it the counterpart of external assets centralized in theCentral Bank): external sources covered 10 percent of expenditures in 1962/3.

42. The Giovernments have pursued generally sound fiscal and monetarypolicies in the past and the indications are that they will continue to doso. However, they have now run into a situation which offers greater tempta-

tions to unwise policies than formerly. A shortage of capital is a newfeature in Nigeria, and with the exhaustion of reserves and real difficultiesahead in generating current surpluses, there will be great pressures to re-sort to inflationary deficit financing. Similarly, the delays and frustra-tions attendant upon securing foreign aid for urgent projects make short-termsuppliers' and contractors' credits seem attractive, although their effect

on the country's ability to borrow for development is wholly adverse. It willclearly call for more financial virtue than has hitherto been required tomaintain Nigeria's economic stability, and as time goes on the need for morestringent economic and financial measures will impose even sterner tests ontha Government0n

Money and Capital Mirkets43. A number of important developments have taken place in the last two

years as a result of which Nigeria now has the basic elements necessary for

the growth of money and capital markets. In part these developments reflectthe wish of the Government to have funds invested abroad repatriated, tocentralize external assets, and to provide investment media in Nigeria for

surplus funds; in part they reflect a policy of Nigerianization of thecredit base and the move towards a situation in which the Central Bank wouldhave effective control over credit.

hh. Treasury Bills were first issued in 1960 and have proved highlysuccessful in providing an investment outlet for repatriated funds and the

surplus funds of banks and other institutions. They are now issued weekly,up to a possible limit of 40 percent of estimated current Federal revenues.The Central Bank encourages the growth of the market by rediscounting asseasonal and other needs dictate at a small margin on the issue rate. Theinterest offered by the bills has attracted a large volume of funds andfrom the original issue of £4 million in April 1960 the total outstandingrose to a peak of £26 million in October 1962; it has since fallen to £22

million in August 1963.

45. Success has also attended the endeavor to develop a market forcommercial bills, and, at the same time, to provide an alternative toborrowing abroad to finance the marketing of export crops. In the 1962/3

crop season, export produce of the Northern Nigeria Marketing Board wasfinanced by bills discounted through a consortium of commercial banks andacceptance houses. The Central Bank is prepared to rediscount or refinance

- 15 -

the bills; at the peak of the 1962/3 season its rediscounts were £10 million.

Commercial banks find the 6 percent discount rate attractive; their holdings

of Nigerian trade bills rose from a previous average level of about £1 mil-

lion to £3 million at end 1962 and a peak of almost £12 million in 1iay 1963.

It is proposed to extend this system to other Regions.

46. In 1963 call money facilities were made available to the comm,lercial

banks and their customers by the Central Bank, using short-dated Treasury

Bills. By June 1963, there was £5 million at call with the Central Bank.

Commercial banks' interest rates must now be linked to the rediscount rate

of the Central Bank. This has been progressively reduced from 6 percent

in October 1961, to h percent. M"ost commercial bank operations are wlithin

the range 6.5-8 percent, with a prime rate of about 7 percent. The Central

Bank is now able also to decide which liouid assets of the banks may foin

part of the required 25 percent minimum holding.

47. The capital market has also developed rapidly in the last two years.

since the establishment of the Lagos Stock Exchange in June 1961. Seven in-

dustrial issues and five of government stock have been issued through the

exchange. The official list of securities now covers 36 Government and in-

dustrial issues. Government Development Stock was first issued in 1959,and

altogether there have been four issues of multiple maturities, ranging from

5 to 25 years at interest rates of 5 to 6 percent, to a total of £34 million.A great part of the earlier issues was taken up in exchange for foreign secu-

rities held or liquidated by governmental agencies, but the demand from

savings institutions and individuals has expanded in encouraging fashion

The Central Bank undernrites the issues and maintains the price of the

stock: so far it has been able to dispose of its holdings as market de-

mand arises. The volume and value of transactions on the stock exchange

have increased considerably, with pension and provident funds the mainstay

of development. The Government, the Central Bank, and industrial and fi-

nancial enterprises are trying to encourage private holding:s of securities,

with some success. The development of a private market is important, both

because of the need to encourage domestic savings to participate in industry

and public investment, and because the possibility of repatriating external

assets is now much less than formerly.

48. The Government has promoted the establishment of a Nigerian Industria:'

Development Bank (I,IDB), in which IFC is to participate in partnership with the

Central Bank and overseas investors, and which w,ill assist in mobilizing Ii-

gerian capital for industrial ventures. The new institution, and similar instL

tutions in the Regions, are discussed in Chapter VI of the Annex.

49. A National Provident Fund launched in October 1961 provides savings

and insurance facilities for non-pensionable employment: by MIay 1963 it had

invested £2.4 million, mainly in government securities. Savings through

other pensions and insurance facilities are also increasing. At the end of

1962 the Government embarked on a national savings campaign, through which

it hopes to mobilize £1 million a year. Post Office savings deposits have

been increasing in number and declining in individual amount, reflecting

- 16 -

the rising number of small savers. Commercial banks savings deposits haveincreased rapidly; by more than 50 percent since the end of 1960.

50. The parity of the Nigerian pound wsas fixed in terms of gold ratherthan sterling in June 1962. Shortly thereafter West African Currency Boardnotes and coin ceased to be legal tender in Nigeria and by the end of 1962had virtually all been redeemed. Nigerian currency in circulation at theend of the vear has been steady at £87 million for the past three years,but with marked seasonal variations. The foreign exchange cover legallyrequired for the currency issue has now been reduced to 60 percent: inOctober 1963 the actual cover was 79 percent and the Central Bank heldsubstantial foreign assets in excess of the legal cover. 1>loney supply in-creased by about h percent in 1961 from a monthly average of £108 million.In 1962 it fell by almost two percent to £110 million. Allowing for someincrease in the velocity of circulation, this supports the belief that GDProse by 3-4 percent in 1961 and perhaps dininished slightly in 1962. Inthe first half of 1963, moner supply has been some 5 percent higher thanin the corresnonding period of 1962.

51. Le_islation introduced in 1962 has increased the Central Bank'sability to influence bank liquidity and interest rates, and has generallystrengthened the banking structure. Commercial banks desposits have con-tinued to move upward, but the increase has been confined almost entirelyto time and savings deposits: these have been an important disinflationaryfactor. Loans, advances and investments totalled £60 million at end-1960and £82 million at end-1962; by mid-1963 they had further increased to £85million. This increase is largely due to the shift in short-term exportcrop and working capital financing to Nigeria from abroad (and is thus lessan increase in credit than a change in its source) and to the growth of theeconormry. Increased financing of crop exports, and the large number of newenterprises in Nigeria, many having no internally generated or overseassources of funds, have also contributed to the rise in credit demand. CentralBank credit to the comimercial banks has exoanded considerably in line withseasonal needs, especially at the end of 1962. In the three years sinceJune 1960, howjever, the Central Bank's net credit to the public sector hasincreased by only £h4 m,illion and to the private sector by less than £7 mil-lion.

52. The Central Bank has played a major role in the development ofNigerials money and capital markets. Nlonetary developments in Nigeria arealready much less responsive to the influence of overseas financial centers.Considerable progress has also been made towards meeting all short-termcredit needs domestically and saving the foreign exchange costs of borrow-ing abroad. The seasonal inflow and outflow of funds has diminished asthe range of investment media and financing instruments available ujithinNigeria has increased, and more domestic use is being made of commercialbank deposits. The change in the system of crop financing should enablethe Central Bank to have a voice in marketing board price policy, which isof great importance in determining monetary conditions. There is a grow-ing need for a national governmental reviewi of board policies and the fullimplications for the economy of producer price changes.

- 17 -

External Trade and Payments

53. The balance of payments trends established in the mid-1950'scontinued through 1961. With rapidly rising capital expenditures and growingconsumption imports increased faster than exports, the expanding volume ofwhich could barely keep pace with declining prices. In consequence, tradedeficits increased from 1955 onwards and capital inflows were not sufficientto finance them: the Government prefering to finance capital outlays byreducing external assets rather than incur unnecessary external debt burdens.

54. Imports in 1961 were at a record level of £222 million, reflectingthe high level of public and private investment, increased consumption andthe stockpiling of consumer goods and some capital goods. In the latterpart of the year, there was a decline in imports which continued throughmuch of 1962. In part this was due to the substantial increase in importduties over a wide range of consumer goods imposed in late 1960 and April1962, but the main factors were the decline in consumer purchasing power,increased domestic output and the after-effects of inventory accumulationin 1961. Although there was some recovery in imports in the second halfof 1962, the rate of 1961 was not reached and for the full year importswere £19 million below the 1961 figure. The pattern of imports in 1962showed that the Government's policy and measures to restrain consumer im-ports had been successful: they fell sharoly; particularly textiles andbeer for which domestic production is becoming increasingly important. Onthe other hand, imports of most capital goods continued to increase, es-pecially machinery, equipment and constructional steel.

55. Provisional data for the first half of 1963 show that imDortsincreased by 5 percent over the comparable period of 1962, and apparentlythe somewhat changed pattern of 1962 is persisting.

56. The Government has adequate means to control the inflow of con-sumer imports, both through import duties and by its ability to influencedisposable incomes. If these measures continue to be effectively applied,capital goods can be imported in increasing volume without a disproportionateincrease in total imports. The rapid increase in the production of Nigeriansubstitutes for imported manufactures will continue to be a major factor inreducing the rate of growth of imports.

57. The proportion of imports to GDP has risen from 16 percent in 195h,to 20 percent in 1960, and fallen back to around 18 percent in 1962. Inthe same period, exports have declined as a proportion of GDP from 19 per-cent to about 1h-15 percent in 1962. The index of expbrt prices.fell by,10 percent between 1954 and 1960, and in the last two years has. fallen bya further 11 percent. This sharp decline has offset the considerable in-crease in the volume of exports. The substantial arov,-th in the volume of mostmajor crop exports has been achieved despite increasing domestic consump-tion and rising domestic absorbtion of products for manufacturing and proces-sing. It has also been achieved in the face of drastically reduced pricesto farmers.

- 18 -

58. Prices on world markets generally continued downward in 1961-2. Theaverage unit values of exports of cocoa, rubber and palm kernels, which in1960 accounted for almost half Nigeria's exports, each fell by about 25 per-cent. Cocoa illustrates Nigeria's export problem: in the last two years thevolume of exports has increased by 30 percent but the value of exports hasfallen by 10 percent. If the average price of the 1950's (say ;250 a ton)

had been sustained, exports in 1962 would have been valued at bh9 millionrather than L33 million.

59. The trend of exports in 1963 is generally good and there should be amarked improvement on last year. The 1962/3 crops were generally much betterthan the previous year's and world market prices in the first half of 1963have continued the improvement that began late last year. The value of ex-ports in January-June 1963 was a little above that of the corresponding periodof 1962. Export prospects must remain a matter of some doubt, but restrainedoptimism seems permissible. The successful implementation of Nigeria's devel-opment plan, and particularly the expansion of the extension services, should

lead to substantial increases in the output of agricultural export commodities.To some extent these will be offset by the continuation in the downward trendin prices that has been forecast. The projected fob prices for major agricul-tural exports in 1967, in comparison with actual unit export values in 1962,are as follows: W/long ton

b/long ton 1962 19671962 1967 Cotton lint 252 225

Cocoa 171 160 Groundnuts 61 50Palm kernels 46 40 Groundnut oil 98 85Palm oil, edible 76 70 Rubber 190 160

On the other hand, Nigeria is seeking new markets for its agricultural outputand hopes to more than compensate both for price falls and the effects of theEuropean Economic Community. The value of petroleum exports will probablytreble in the next five years and further improvements in the value of exportsmight come from increased processing of domestic products and the export ofNigerian manufactures to other African countries. On the whole, the increaseof just over 40 percent in total exports projected in the Plan for the period1962-1967 does not appear unreasonable.

60. The direction of Nigeria's external trade has continued to shift away

from the United Kingdom, with Ljestern Europe, the United States and Japan be-coming more important as suppliers and markets. Nigeria thus has both a widerchoice of sources of supply and more diverse markets, and sz long as an openeconomy can be preserved this should help to mitigate the expected adversemovement in the terms of trade. In an effort towards the diversification ofexport markets Nigeria is transferring the sale of major export crops fromEurope to Lagos, beginning in October 1963. It is also seeking to stabilizeexport prices at reasonable levels by participating in negotiations for inter-national agreements concerning, especially, cocoa and groundnuts.

61. Net invisible payments abroad have increased in recent years. External

debt service payments, remittances of profits of foreign companies establishedin Nigeria, and the cost of government services overseas have risen and must beexpected to continue to do so. WJith the decline in overseas assets, Nigeria'sinvisible receipts have fallen, and although domestic ownership of shipping and

insurance, and the reduction in short-term borrowing abroad will help to dimin-

ish the deficit, there is likely to be an increasing net outpayment on invis-ible account in the future.

- 19 -

62. The balance of payments current account deficit has increasedsteadily since 1955, rising to £74 million in 1961 Although net invisiblepayments increased in 1962, the reversal of the trend of imports was suchas to effect a substantial improvement in the current deficit which fellto £61 million, the lowest since 1959. It is likely that higher exportsin )963 could lead to a further improvement in the balance of payments.

63. Net capital inflows, at £41 million, were higher in 1961 thanever before. Official loans and grants from abroad fell by £2 million to£11 million, but net private capital increased from £19 million in 1960to £30 million. This latter figure undoubtedly includes a large elementof short-term trade credit, and it is probable that the inflow of long-term private capital was higher than the net figure in 1960 and lower in1961. Short-term movements are also reflected in the 1962 private capitalfigures; the net inflow dropped to £20 million, but there was a large out-flow of short-term trade credit in the first half of the yec.r and the long-term inflow was little, if any, lower than in 1961. The trzansfer of fi-nancing of working capital and export crops to Nigeria also affected short-term capital movements. Government capital receipts were disappointing,loans and grants falling by a further £2 million to £8.7 million in 1962;total net capital inflow for the year was £29 million.

64. With imports rising more rapidly than exports and growring netinvisible payments, the increasing capital inflow has not been suf:i:icientto meet the deficit on current account. Consequently external reserveshave been drawn fairly rapidly in recent years; by £19 million in 1961,£28 million in 1962, and by £17 million in the first half of 1963. Thegreater decline in 1962 than in the previous year, wlhen the deficit wassubstantially higher, is explained by the reduced capital receipts andby the effects of transferring the financing of working capital and cropexports from overseas centers to Migeria, which is estimated to have re-duced external reserves by £15-20 million. The process of centralizingforeign exchange reserves in the Central Bank has continued and at theend of 1962 the Bank held £77 million. A seasonal recovery in reservesmay be possible, but the June 1963 level of £107 million represents barelysix months imports at the 1962 rate. There is now clearly little roomfor a further reduction to finance development. Nigeria has so far beenable to maintain an open economy with few real restrictions on imports orexchange movements. The continued enjoyment of the benefits of interna-tional specialization and trade, and the country's ability to attractforeign investment, will end unless a reasonable cushion of foreign ex-change reserves can be kept in being.

External Debt

65. Nigeria's public external debt has increased significantly inthe past two years, but is still relatively small. From £42 million atthe end of 1961 it has grown to £67.5 million at June 30, 1963. Externaldebt service was 209 percent of 1962 export earnings, and including thematurity of a sterling loan in 1963, is expected to be about 3.3 per-cent of forecast 1963 export earnings.

- 20 -

66. IVith the support of two major oil companies, the Niigerian PortsAuthority successfully floated a loan in the London ;larket in mid-1963:there are indications that Nigeria could raise small additional sums thisway at interest rates around 7 percent. In addition, Nigeria has beenoffered a substantial volume of bilateral and international loans. Inthese circumstances, it is disturbing to note that the country is beingpressed by some countries and commercial interests to accept, and hasbegun to incur, a mounting total of suppliers' credits and similar short-term debt. In all, these now account for J17_ million of the total out-standing debt. They are beginning to erode Nigeria's capacity to serviceexternal debt: further additions to the total could make it impossible toborrow the amounts of external capital Nigeria needs to complete its devel-opment programs.

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IV. THE NAJOR ECONO0lIC SECTORS

Agriculture

67. The greater part of Nigeria's agricultural output, about 80 per-cent, consists of food crops grown for domestic consumption. Apart fromthe purely food crops such as yams, cassava and guinea corn, large quantitiesof rroundnuts and palm oil are domestically consumed. There are no recentdata on the total volume of domestic food production, which is assumed tohave kept pace with the population increase estimated at 2 percent a year.

68. Cocoa is the only major crop grown entirely for export. Productionincreased by 45 percent in the three years from 1958/9 to 1961/2, coincidingwith a fall in world prices. The response of cocoa farmers to the extensionservice, backed up by supervised credit, has been extremely good, and hasdemonstrated that Nigerian farmers adopt improved production techniques whentheir benefits are clearly shown. The 1962/3 season was unfavorable forcocoa and production dropped from 191,000 to 175,000 tons: prospects forthe current crop are better. I1arketing board producer prices were reducedby a third early in 1961 and were further cut for the 1961/2 crop seasonin response to world Drice trends. They were increased by about. 5 percentin 1962/3, but this was not enough to counteract the effects of reducedoutput. IWorld prices have recently shown signs of marked improvement andthere has been a further small increase in the producer price for the 1963/4crop. Prospects for increasing output of cocoa are good. Although manyageing trees on poor land will go out of production in the next few years,new plantings and improved cultivation should enable production to increaseby 5 percent or so a vear over the next five years. The apparent failureof the attempt to obtain an international cocoa agreement is important toNigeria wihich is the world's second largest exporter of cocoa. The futuretrend of world prices must remain in doubt, but there is sorie hope thatprices might be maintained close to present levels for the next year or two.

69. Groundnut production has also increased remarkably in the lastfew years as a result of improved techniques and greater use of fertilizers.I'arkceting board purchases rose by 11 percent to 686,000 tons in 1961/2 andby 26 percent to 865,0oo tons last season. Sales to local mills for oiland cake production have risen to about 175,000 tons a year, but Nigeriaremains the world's leading exporter of groundnuts. The outlook for ground-nut prices on world markets is not good, in spite of the recent upswing,but production should continue to increase beyond recent average levels.Producer prices have been reduced in each of the last two seasons, and willprobably have to be reduced again if the Northern Nigeria Marketing Boardis to generate a trading surplus.

70. ilarketing board purchases of palm products fell sharply in 1962.Bad weather conditions, reduced producer prices (for the first time since1950), increasing domestic consumption, and possiblyr increased smuggling,were the main factors responsible. IJith better weather conditions the1963 crop is exDected to be higher than last year's. The recent trend

- 22 -

has been downward, however, and for the future rising home consumption togetherwith reduced output from wild palms (the main source of output) are expectedto largely offset the effects of newJ plantings and replanting with improvedvarieties. Oil extraction can be increased considerably by the employmentof new, and relatively cheap, hydraulic presses, and this should permit amodest increase in oil exports. No increase in production of kernels forexport is expected for several years.

71. Cotton production as registered by marketing board purchases hasfluctuated violently in recent years. Seed cotton purchases were 151,000tons in 1960/15 83,000 tons in 1961/2 and 148,000 tons last season. Afurther large part of the total production (possibly as much as 60-80,000tons) does not pass through marketing board hands. An increasing propor-tion of output is being sold domestically by the board for use by Nigeria'sexpanding textile industry. The variations in production have been reflectedin exports of cotton lint, which fell to 23,000 tons in 1962. IJith theopening up of new growing areas in Northern Nigeria, improved cultivationmethods, and better pest and disease control, production is expected -to in-crease considerably and cotton lint exports of 71,000 tons are forecast for1967.

72. Rubber is grown mainly in the new .Hid-Wlestern Region. It is notsubject to marketing board control, and this factor has encouraged planta-tion development and the replacement of oil palms by rubber trees on someplantations. Plantation production should increase, but most of the produc-tion is from smallholdings where ageing trees and the effects of "slauEh'tertapping" are expected to prevent any rise in output over the next few yea±b.Therc will be also a growing demand for domestic rubber from local industries.Exports, which increased rapidly up to 1960, have showln no significant in-crease since and are not expected to rise by more than 5 percent above thepresent level of 60,000 tons in the next five years.

73. It is possible to be reasonably optimistic regarding the prospectsfor LTigeria's agricultural exports. Past results have showm that farmerswill respond quickly to proven methods to increase productivity. Consider-able research has been carried out to determine the best cultivation methodsand crop varieties. IWhat is now required is the application of this researchto existing and new farmers, for whom abundant land is available. The re-cent FAO planning mission will shortly be reporting on the lines that agri-cultural development should now take. Agriculture is accorded the highestpriority throughout Nigeria's development programs, but this will be meaninglessunless there is a large and rapid expansion of extension and related services.

74. Generally speaking, Nigeria has sufficient resources of land andlabor for the production of domestic food crops to be left, for the timebeinC, to traditional methods. In some areas there is a risk of soil ex-haustion through over-cultivation with traditional methods: in such areasit may be economically justified to devote effort to improved cultivationpractices for food crops. But the prime need is to improve the oualityand productivity of export crops, and the limited resources of skilled man-powier available for agricultural development services should be utilized to

- 23 -

this end. The potential for higher yields and higher auality from peasantagriculture is enormous: the use of fertilizers, high and quick-yieldingtree crop varieties, improved rubber tapping methods, improved palm-oilextraction processes and better care and management of trees and crops of-

fer great possibilities for both. It must be acknowledged that the returnswill be slow to appear where tree crops recuire several years to mature.But unless effort is concentrated in this direction, Nigeria will be unableto meet the expected fall in world market prices without facing the alter-natives of uncompetitive exports, subsidized agriculture or greatly reducedfarm incomes. Any of these alternatives would be disastrous for Nigeria'schances of financing future development.

Livestock

75. l'iaeria has upward of 6 million head of cattle, almost all ownedby nomadic Fulani herdsmen in Northern Nigeria. Although some 1 millionhead are slaughtered annually, cattle are kept only-in part for economic-rea-

sons. Progress is being made with schemes to settle the Fulani ahd developmixed farming, but the planned- provision of better marketing and transportfacilities is a major factor in-the improvement in beef production. Rapidprogress has b&en made with the development of egg and poultry production,and pork production has increased.sufficientiy to pernit scme exports.

Forestry

76. Over one-third of Nigeria's land is forest land, with the besttimber producing areas concentrated in the hlid-liest. Timber exports roserapidly until 1960, but have since fallen from £7.0 million in 1960, to

£5.7 million in 1962. In the same period, exports of plywood and veneershave risen from £1.0 million to £1.3 million. The adoption of a sound forestryutilization policy is a prerequisite for future development in this sector,,

Fisheries

77. Nigeria's imports of fish have been consistently over £8 milliona year in each of the last fewr years. Domestic outnut is lim,lited, and ap-pears mainly in the form of poor quality dried fish. There is ample scope

for greatly increased nroduction from ocean, inshore and inland sources, espe-cially Lake Chad, provided that adequate marketing and transportationrfaccii-ties are provided as planned. Both FAO and Special Fund are assisting- in re-search into resources and methods. The development of fisheries should bepursued, both for nutritional reasons and to conserve foreign exchange.

1ining

78. Tin production was 8,014 tons (metal content) in 1962, slightlyabove 1961 but still below the maximum of 9,612 tons reached in 1957. Tinsmelting started at the end of 1961 and the total Nigerian output is nowsmelted on the Jos Plateau. The average London price was £888.6 per tonin 1961 and £896.6 per ton in 1962; early 1963 prices remained just above£850 per ton, but ir,proved to £905 in July. At prices of L9d0-950 per

- 24 -

ton now set by the Tin Agreement, Nigeria may well increase its output.The demand for columbite during 1962 was noticeably lower than in theprevious year. The average price paid for columbite dropped steadilyfrom an average of £613 per ton of concentrates in the first quarter toan average of £522 per ton in the last quarter of 1962. The poor demandfor columbite appears to be due mainly to competition from pyrochlor.

79. The coal industry is now meeting competition from oil and natu-ral gas and will later meet further competition from hydroelectricity.However, output was slightly higher in 1961/1963 than in previous yearsdue to increased industrial use of coal. An energy survey is now under-way to determine the most economic way of using Nigerian fuel supplies.

80. Oil output increased from 2.3 million tons in 1961 to 3.3 milliontons in 1962. Production is expected to reach 5 million tons in 1965 and10 million tons within a very few years. From 1937 to 1960 total invest-ments in oil was £90 million: in 1961 and 1962 another £30 million wasinvested. Additional companies obtained prospecting licences in 1962 andsome of them have started exploration work. At Port Harcourt an oil refin-ery with a capacity of 1.9 million tons is expected to start production inmid-1965; it is designed primarily to cover local demand.

Industry

81. In the last two years further progress has been made in expand-ing industrial capacity, especially in the field of textiles, rubber tires,aluminum products, cement, asbestos cement, beverages and tin smelting.The value added by manufacturing industry is believed to have doubled since1960, to £30 million in 1962. Manufacturing is absorbing an increasinglylarge number of wage-earners: from about 30,000 in 1956, the number roseto 50,000 in 1960, and to 73,000 in September 1962. An additional 20,000to 30,000 industrial workers will probably be required during the next threeyears. At the end of 1962 the Federal Ministry of Connerce and Industrywas awJare of 131 proposed projects, 44 of which were at the stage of factoryconstruction; the most important were in the fields of sugar, glass, textilesand vehicle assembly. Governments have been willing to participate in mostof these projects. Private Nigerian entrepreneurs are still investing intrade, building, road transport and other service industries where theyexpect returns to be greater and quicker than in industry. However, withgrowing competition profits are said to be decreasing in these activitiesand there could be a more lively interest on the part of Nigerian business-men towards investment in industry, provided credit, training programs andsupporting services by the Government are made available.

82. Industrial development is influenced more by the rate of privateinvestment, the bulk of which is foreign, than by public capital expendi-ture programs. Government-provided supporting services and governmentpolicies and attitudes towards the private investor are, however, of crucialimportance. Many foreign investors are showing interest in Nigeria and haveapplied for Pioneer Certificates (which allow for income tax relief andother investment incentives), but there have been many complaints about the

- 25 -

interpretation and administration of the system. Delays in processing ap-

plications and uncertainty as to w-rhether the Certificate will be -ranted

have produced frustration and irritation in the applicants at the time w4hen

a feeling of cordial welcome is most important. Some capital has come in

without tax inducements, from firms seeking to protect their present import

markets, but Nigeria needs much more capital than these sources can provide.

83. Land and facilities are among the most effective incentives to

overseas investment that Governments can offer, and Nigeria has rightly

engaged on a program of industrial estates. However, industrialists still

complain of high rentals and difficulties in obtaining adequate electric

power, water and telephones. Limits imposed on the number of foreign per-

sonnel who may be engaged by industrial firms in Nigeria have also caused

difficulty, but this now seems to have been largely overcome.

84. Fear of ambivalence in the Government's attitude towards new in-

dustry arid foreign private investment appears to have decreased. In fact

foreign companies often seek government participation as a guarantee. Un-

fortunately there is still sometimes insistence that local capital in a

specified percentage be accepted as a condition for permitting foreign

capital to enter Nigeria. Where many firms operate wjithin the same in-

dustry, Government does not as a rule insist on joint participation. In

fact with its power to tax, to allow imports and to regulate and engagein industry, as well as to promote Nigerian privately-financed industry,the Nligerian Government should feel secure as to its ability to protect

the economy from exploitation by foreign capital.

85. Public development cornorations designed to provide long-term

industrial finance have deteriorated in the last two years and their

future does not appear particularly bright. The commercial institutions

operating in Eastern and Northern Nigeria have increased their activities,

but their volume remains limited. The goal of industrialization will be

reached chiefly through increasing the rate of private investment, largely

foreign. The Federal Government, therefore, places great store by the

establishment of the Nigerian Industrial Development Bank (NIDB) as a means

of joining foreign private skills, experience and capital with Nigerian

skills and capital in developing new industries and expanding existing ones.

86. The largest government industrial investment proposed is for an

integrated steel mill. The plant would have a capacity of 160,000 tons

of crude steel and 130,000 tons of rolled products, and its cost has been

estimated at some £22 million. The electric reduction process has been

recommended; but it has yet to be established that this process is tech-

nically and economically feasible with the raw materials locally available.

Moreover, it wJill need to be shown that the economic return on the invest-

ment represents the best use of so large a sum. Since the plant will re-

quire substantial power it should not, in any case, be completed before

the Niger Dam is producing electricity.

- 26 -

Transport and Communications

87. Road transport in Nigeria has expanded rapidly in recent years.The number of vehicles has increased from 23,000 in 1953 to 58,ooo in 1960,and to an estimated 8h,o0o in 1962: the latter figure includes L2,000private cars and taxis, and 28,000 commercial vehicles. Freight carriedby road is estimated to have increased from 8h0 million ton/miles in 1953to 2,h00 million in 1962. Road construction and maintenance has not beenable to keep pace with present or expected traffic, and although there arenow 45,500 miles of roads, only 7,700 miles are bituwnenized or tarred. Recon-struction and improvement Qf existing roads, together with improved maintenance,are more pressing needs, than, with a few exceptions, new roads.

88. The railway system is in the process of being extended by 400 milesto a total of 2,180 miles. The extension, wqhich is being partly financed bythe Bank, is intended to open up transport facilities in a potentially im-portant agricultural area in north-eastern Nigeria: so far 210 miles havebeen completed. A survey to determine the most economic feeder road systemto support the extension has just been completed. The Bank has providedhalf the cost of the survey. Railway freight traffic has increased from1,103 million ton/miles in 1960 to l1h20 million in 1962; it is expectedto rise to almost 2,000 million ton/miles in 1967. In the same period,passenger traffic has increased by more than one-third to 482 million pas-senger/miles. Operating costs have risen, while competition from roadtransport has increased, and the Railway Corporation has experienced sub-stantial losses in each of the last four years.

89. Exports through Nigerian ports have almost doubled in the lasttwo years, reflecting the rapid increase in oil exports: export cargohandled in 1962 amounting to 5.8 million tons. Import cargo handled hasrisen only slightly, from 3.15 million tons in 1960 to 3.18 million tonsin 1962. Recent improvements to facilities at Port Harcourt and improve-ments in the Delta ports should help to relieve the present congestionat Lagos where work has begun on wharf extension and additional facilities.The Bank is providing part of the cost of the extensions to the wharves.The expected groTwth in Nigeria's foreign trade will make further exten-sions at both Lagos and Port Harcourt necessary within the next few years.

90. Internal air traffic, both passenger and freight, has declinedfollowing recent reductions in the route services offered by NigerianAirw¢ays, effected to cut operating losses. Aircraft arrivals from abroadhave increased by 7 percent in the last two years, but passenger arrivalshave probably increased by a much greater proportion.

91. Communications services, including telephones, telegraph andpostal services, are inadeouate for present demands, and cannot supportthe growing needs of industry and commerce. AID is conducting a surveyof telecommunications needs, and an interim development program to coverthe most pressing requirements has been proposed. Postal services arealso being improved. The Government is initiating measures to make theseservices self-supporting.

- 27 -

Electricity

92. Sales of electricity by the Electricity Corporation of Nigeria(ECN) have increased by an average of 23 percent a year for the last fiveyears. In 1962/3 they were 524 million kwh. ECN generated 6L5 millionkwh in 1962/3 and a further estimated 126 million kwh were generated byprivate suppliers. Host of ECN's plant consists of small and inefficientsteam or diesel stations, and the present installed capacity 234 UI.W is in-sufficient even for present needs. Retail sales are forecast to grow ata rate of 19.5 percent a year, falling to 11 percent by 1968/9 when themaximum load is expected to reach some 300 ill and energy generated 1,500million kwh.

93. ECN has embarked on a six-year proaram to provide about 220 iHIof additional generating capacity and to link much of its plant througha national transmission line system. The additional capacity should meetNigeria's needs until 1969 when it is intended that the Kainji Dam hydro-electric station should come into operation. The national grid would, withextensions, absorb the output of the proposed hydroelectric station.The Kainji Dam, on the Niger River, is much the largest project in thecurrent development program. It is intended to have an installed capacityof 320 INW initially and 960 NW when fully completed; and would meet Nizeria'spower requirements at least until 1982. The Dam will also bring benefits toagriculture, fisheries and transportation.

9h. Negotiations for a Bank loan to ECN for part of its six-year programhave been completed. The Bank has also appraised the Kainji Dam project withfavorable conclusions, and it is probable that negotiations for a loan to theNiger Dams Authority will begin in the near future.

Water Supplies

95. Considerable public investment has been made in water supplies inthe past few years but both urban and rural supplies are inadequate. Urbangrowth and the rapid increase in industrial demand make the orovision ofincreased urban water supplies a matter of some urgency. The Governmentsare putting them on a self-supporting basis, which should help to encourageexternal aid for their financing. Increased water supplies are likely tomake the absence of wTater-borne sewerage systems in the major cities morestrongly felt.

- 28 -

V. CREDITWORTHINESS

96. Nigeria has a good record of growth over the last decade and thereare solid foundations for future growth. The country's resources are ampleand varied, agriculture is capable of substantial development, industry isexpanding rapidly, and petroleum will soon be the leading export. The Gov-ernment is determined to foster economic progress, and Nigeris is now inthe second year of a development plan designed to make the best possibleuse of its resources. It will not be easy, however, for Nigeria to over-come the many and formidable problems which lie ahead. In three years ofindependence there have been no severe economic tests for the Government.The political tests of the past two years have been surmounted and thecountry's leadership is growing in experience, but internal stresses arebound to continue and will continue to test the country's leadership. Aslow start has been made to implementing the planned public investmentprograms, which have now grown in size and cost to a level which threatensto inhibit growth in the private sector. Capital, skills and experienceare scarce, and it will be difficult to generate revenues and keep doiTnrecurrent costs in the face of pressure for improved social amenities andhigher personal incomes, but more can be done. External reserves are stilladequate, but no longer offer the comfortable cushion that they did a fewyears ago, especially as a further adverse movement in the terms of tradeis forecast.

97. There is evidence that the Nigerian Governments recognize the problemsand are moving towards rational solutions to them. There is reason to thinkthat the past record of sound fiscal and monetary management will be maintained.if this is so and the new economic policies associated with the Plan are ef-fectively implemented, internal and external financial stability should bepreserved. In these circumstances, Nigeria would be able to utilize fruit-fully some £270-360 million of external assistance over the plan period.

98. Nigeria's ability to service large amounts of external debt is as yetuntested. The present external debt is relatively low, but the short-termdebt incurred in recent years has added disproportionately to debt-serviceobligations. It is now the Governments' policy to restrict short-term fi-nancing. However, even assuming that short-term borrowing is kept to anabsolute minimum, to borrow the full amount of external capital requiredover the plan period on conventional terms would raise Nigeria's debt-service liabilities to 13-17 percent of export earnings by 1967/8. Thiswould clearly be too great a burden when the country would still be farfrom having achieved self-sustaining growth. To meet Nigeria's needs forexternal assistance, therefore, and in recognition of the development ef-fort which is being made and the good record of economic growth, as well asof the low average level of incomes prevailing in the country, the totalshould contain a generous admixture of grants and loans on soft terms0To the extent that Nigeria incurs further short-term debt it will impairits ability to borrow on conventional terms but would not strengthen itscase for grants and soft loans.

STATISTICAL APPF2DIX

Table IJo.

Giross Dom.estic Product by Industrial Origin ....... ....... 1

Ciross Domestic Product by Category of Expenditure, 1957 1-larketPrices. ..0,4 ........ *. ... * .a.. ..... ., . ..... 2

Gross National Product by Category of Expenditure, CurrentMarket Prices .. .. . ..... ....... . ... .*.* * * * * ** 3

Gross Expenditure, Distribution as Percentage of Gross DomesticProduct ..... ....... .. .. t

Consumer Price Indexes . ..................... .

Produce Purchased by Mrarketing Boards. . . 6

ilarketing Board Producer Prices ............................... 7

Ilarketing Board Trading Results . . 8

14arketing Boards' Break-even Prices . ............... ; 9

Industrial Output - Value Addedd 10

Principal Development Institutionst. . ... 1

Traffic Trends -Past and Projec et.. 12

Electric Power Production - Past and Projected ............ 13

Central Bank of Nigeria, Balance Sheet... 1

IHoney Supply . . .15

Commercial Banks .. .......................... , , 16

Commercial Banks - Classification of Loans and Advances. 17

Imports and Exports ..... . .18

Imports and Exports - Index Numbbers . . 19

Average Unit Prices of Princial Ep xp o... 20

Principal Exports by Volume .......... .. ... 21

Principal Exports by Valu e . ... ........ 22

Export Prospects - Volume. .... . . ........... . ...... ... ... .... 23

Export Prospects - Summary............................ 24t

_2-

Tabls No.

Principal Imports .... . ................................ ......... . 25

Balance of Pa77ments . ........ ........ ... * . .. ..*. .* 26

External Rleserves ............... ............ 27

Government Revenues and Expenditures ............................ 28

Sources of Government Revenue........ .. 29

Governmnent Recurrent Expenditures . . .... 30

Government Capital Ex)enditures .... ............................ 31

Public Canital Expenditures and Financial Resources, 1955-62 and1962-68...... .. * * .. .. . . ....... * * * .. * o . .. o. * 32

National Development Plan, 1962-68. Consistency Test .33

Gross Domestic Product 1950-1960, and Projection 1960-1967 ...... 34

Shares of Sectors of Production in Gross Domestic Product....... 35

Expenditure as Percentage of GDP . .... ......... ........... 36

Investment and Savings Estimates, 1950's and Projections 1962-68 37

Estimates of Savings and Revenues 1955-1962 and 1962-1968. . 38

Federal Governr,ment Capital Expenditures 1955-1962 and 1962-1968. 39

Eastern Nigeria Capital Expenditures 1955-1962 and 1962-1968.... 40

Northern Nigeria Capital Expenditures 1955-1962 and 1962-1968 .. 1

Western Nigeria Capital Expenditures 1955-1962 and 1962-1968.... L2

Progress with the Plan - Governments' Capital Programs.......... L3

Federal Government - Progress with the Plan. .... Li

Eastern Nigeria - Progress with the Plan . .......... 5

Northern Nigeria - Progress with the Plan.. . 46

Western Nigeria - Progress with the Plan ... 7

External Public Debt .......... ....... . .. ..... . . ........ . 48

External Debt Service . ............... . .. .. ........... 49

Table 1

Gross Domestic Product by Industrial Origin

1957 Factor Prices( million)

1950 1952 1954 1956 1957 1958 1959 1960

Agriculture 378 431 471 460 471 476 477 496Livestock 60 53 56 58 58 60 60 60Fishing 10 10 10 13 13 15 15 16Forestry 9 10 12 14 15 16 20 25Mining & petroleum 8 8 8 10 9 9 10 11Manufacturing 3 5 7 10 11 14 14 16Handicrafts 1/ 16 16 16 16 17 18 24 27Public utilities 1 1 1 2 2 2 2 3Transport and

communications 31 39 54 68 78 86 92 99Construction 20 19 38 37 43 44 53 73Owuiership of buildings 9 9 10 10 10 11 12 15Land development 8 8 8 8 8 8 8 8Government 2/ 15 20 18 29 31 30 39 43Distribution, etc 121 166 164 143 144 149 156 169

Gross Domestic Productat factor cost 689 794 872 876 910 940 980 15 o86

1/ Electricity and water.

2/ Distribution, banking, insurance, professions, domestic services,miscellaneous services, residual errors, etc.

Source: P.N.C. Okigbo - Nigerian National Accounts, 1950-57and Federal Ministry of Economic Development.

Table 2

Gross Domestic Product by Category of Expenditure

1957 Market Prices(L million)

1950 1952 1954 1956 1957 1958 1959 1960

Consumers' expenditure 609 696 775 799 816 830 830 870

Government currentexpenditure on goodsand services 24 34 31 44 48 57 70 77

Gross fixed investment 48 75 93 108 113 122 137 158

Increase in marketingboards' stocks -7 2 -6 -5 9 n.a. n.a.

Plus Exports (f.o.b.) 100 112 132 139 129 144 163 171

Final expenditure 774 918 1024 1084 1114 1163 1209 1276

less Imports (c.i.f.) -75 -108 -132 -181 -176 -182 -212 -253

Gross Domestic Productat market prices 699 809 893 903 939 971 988 1023

Source: P.N.C. Okigbo - Nigerian National Accounts, 1950-57.Federal Office of Statisticsand Federal Ministry of Economic Development.

Table 3

Grcss Natiornal Product by Category of Expenditure

Current Market Pricesmi , illion)

1950 1954 1955 1957 1260

Consumers' e:penditure 457 673 743 816 922

Government currentexpenditure on goodsand services 17 28 39 47 90

Gross fixed investment 31 71 86 113 158

Increase in marketingboards' stocks -4 -7 5 9 10

plus Exports of goodsand services 89 155 128 129 182

Final expenditure 590 920 1001 1114 1362

less Imports of goodsand services -65 -126 -152 -176 -2h4

Gross Domestic Productat market prices 525 794 849 938 1115

Net income from abroad -3 -1 -1 5 -6

Gross National Productat market prices 522 793 848 943 1112

Source: P.N.C. Okigbo- Nigerian National Accounts, 1950-57.Federal Ministry of Economic Developmentand Federal Office of Statistics.

Table 4

Cross Expendituire

Distribution as Percentage of Gross Domnes';,i^. Product

Current Market Prices

1950 1954 1955 1957 1960

Consumers' expenditure 87 85 87 87 83

Governm.ent currentexpendituire on goodsand services 3 4 5 5 8

Gross fixed investment 6 9 10 12 14

Increase in marketingboards' stocks -1 -1 1 1 1

plus Exports of goodsand services 17 19 15 14 1.6

Final expenditure 112 116 '18 119 122

less Imports of goodsand services -'.2 -16 -18 -29 -22

Gross Domestic Productat market prices 100 100 100 100 100

Source: Table 3.

Table 5

Consumer Price Indexes

Lagos Ibadan Enugu Kaduna Port195T3-l00 195T = 100 1973---loo 1957 = 100 Harcourt

and -AbaAnnual Averages 1960 = loo 1957-loo

1956 117 114 112 - -1957 119 117 112 100 1001958 119 110 115 103 n.a.1959 124 112 119 109 n.a.1960 132 117 119 108 1091961 1391/ 127 122 115 1171962 110- 137 1]9 122 121

Quarterly Averages

1960 Jan-Mar. 130 115 116 107 108Apr.-June 133 117 123 108 108July-Sept. 133 119 120 110 110Oct.-Dec. 133 118 115 108 109

1961 Jan.-Mar. 136 124 117 109 114Apr.-June 140 128 121 115 118July-Sept. 142 130 124 120 117Oct.-Dec. 14hL, 127 125 117 117

1962 Jan.-Mar. 108-' 133 136 116 120Apr.-June. 1121/ 142 158 126 125July-Sept. 1121/ 141 158 125 121Oct.-Dec 1081/ 131 146 120 118

1963 Jan.-Mar.2/ 108 131 144 120 118

2/April 110 129 145 121 118Maya! 110 132 147 121 117

1/ Base: Average 1960 = 100.2/ Provisional.

Source: Federal Office of Statistics.

Teble 6

Produce Purchased by Marketing Boards(thousand long tons)

1/ 2/Crop years 1950/1 195)4/5 1956/7 1958/9 1959/60 196,0/1 1961/2 1962/-

CocoaWestern Reirlon n.a. 84 128 132 146 182 186 n..Total 110 85 131 134 149 186 191 175

Palm oilEastern Region n.a. n.a. 162 167 170 170 161 123Total3/ 167 216 164 184 190 190 173 130

Palm kernelsEastern Region n.a. n.a, 211 211 212 208 208 169Western Region n.a. n.a, 235 226 198 197 201 174Total 381 462 461 455 428 423 430 358

GroundnutsNorthern Region 1h3 373 358 533 445 619 686 866Total 143 373 358 533 445 619 686 866

Seed cottonNorthern Region 42 99 73 87 86 151 83 1)43Total 42 100 7a 89 89 152 83 1 45

Benniseed 4 16 16 16 21 27 21 21

So,ya beans 4 9 16 3 4 14 15 27

17 Crop years are the buying seasons of Mlarketing Boards, as follows:

Cocoa: September - AugustPalm products: January - December; date are for calendar years

1950 etc.Groundnuts: November - MaySeed cotton: Northern Region, November - March; Western Region,

March - June.2/ Totals include Southern Cameroons, excluded from subsequent years.3/ Totals for 1954 include Southern Cameroons. Purchases in 1963 are estimated

to be:Palm oil, 150,000 tons andPalm kernels, 400,000 tons.

)4/ Provisional.

Source: Federal Office of StatisticsNigerian Produce Marketing Company Limited.Regional Marketing Boards.

Table 7

Marketin Board Producer Prices(£ per long ton, unless otherwise stated)

1950/1 1954/5 1956/7 1958/9 1959/60 1960/1 1961/2 1962/31/ 2/

Cocoa- 120 196 146 146 156 156 96 1013/

Palm oil 53 65 50 50 47.8 47.8 47.8 404/

Pairn kernels 26 33 30 29 29 29 29 255/

Groundnuts 21.2 44.7 45.0 42.8 44.2 45.2 42.1 38.86/

Seed cotton 4.0 6,o 5.9 6.0 6.1 6.05 5.35 4.87/

Benniseed 20.0 35.5 35.5 39.5 39.5 44.9 44.9 44.9

Soya beans 19.5 19.9 17.9 17.9 19.9 26,0 26.o0 22.3

1/ Grade I, Western Region.2/ Reduced to 1108 on January 23, 1961.3/ Special Grade, Eastern Region: calendar years 1950 etc. Price for 1963

is 0ho.4/ Western Region: price for 1963 is L25.C/ 1950/1 and 1954/5; Standard Grade, Northern Region: thereafter Special

Grade, Northern Region.6/ Grade NAI, Northern Region. Prices are in pence per pound.7/ Northern Region.

Note: All prices are shown net of Produce Sales and Purchase Taxes.

Source: Regional Marketing Boards.Nigerian Produce Marketing Company Limited.

Table 8

Marketing Board Trading ResultsL million)

2.956/7 1957/8 1958/9 1959/60 1960/1 1961/2

Ea3tern RegionPalm Kernels -0.1 +0o6 +3.2 +2,6 - +0.7Palm oil +1.7 +0.3 +0.9 +0.1 +0.3 +o.6

Northern Re-fgionGroundnuts +3,0 -2.0 +0o8 -1.o)Cotton +0.1 -0.9 -1l0 -1.0 -1.3)

Western RegionCocoa -1.2 +4L9 +7.8 +1.1 -1.2Palrm kernels -0.2 +0.1 +2.6 +2,2 -0.5

1/ Calendar years, 1957, etc.

Source: Regional Marketing Boards.

Table 9

Ilarketing Boards' Break-even Prices(£ per long ton)

EdibleCocoa Palm oil Palm kernels Gr2cbuts

Western Region Eastern Region NorthernR-

1/Long-term price: cif London 170 75 47 less cif costs -10 -7 -6 -6

Long-term fob price, Nigeria 160 68 1 50less: .export duty -16 5 -3 -5

produce tax - h -4 -2 -3,5other Board costs -19 -1 -8 -8L5

Board's Break-even Priceat port of shipment 121 1}5 28 35

Current season producer prices2/ 101 h0 25 39

1/ Planning forecasts of long-term prices cif London.27/ 1962/3.

Source: Regional Marketing Boards, andMinistry of Economic Development.

Table 10

Industrial Output, - Value Added

(E thousand)

1950 1954 1957 1960

Bakeries 19 95 210 316Grourndnut-oil milling 182 389 29162 2j610Margarine 3 12 18 18Beer and soft drinks 257 689 1,684 29800Tobacco 1,336 2,004 2J111J 2,190Textiles 9 45 377 613Rubber Processing 22 108 595 1,378Tanning 9 21 39 41Saw milling 394 1,h35 1,531 1,809Cement - - 372 15160Canning - 13)Meat oreparations - 13 51)Soap 303 512 663)Perfumery 18 113 161)Plastics - - 9) 2,715Tyre retreading - - 44)Furniture 36 177 279)Prestressed Concrete - - 41)Metal products 154 475 h77)Boat building 4 21 103)

Total 2,745 6,108 10,941 15,650

Source: P.N.C. Okigbo - Nigerian National Accounts, 1950-57and Federal Ministry of Economic Development.

Table 11

Principal Development Institutions

SmrITlary of Capi.tal Resources, Investments ard Loans

(£ thousand)

Eastern Northern NTorthern Western Western lhvestrne''tNigeria Region Developments Nigeria Region Company ofDevaopzn.ent Development (Nigeria) Development Finance NigeriaCorporation Corporation Liii ited Corporation Corporation Limited(3-31-61) (3-31-62) (3-31-61) (3-31-62)1/ (3-31-62)1/(2-28-63)

CaDital Resources:Capital - paid in

and granted 8,650 9,821 619 11,379 654 l,00'5Less development

grants 681 3,958 - 3,609 -Plus (less) surplus

(cumulative loss) (818) 94 (5) (2865) 207 140

Net Worth 7,151 5,832 614 4,905 862 504L0Long-term loans 526 - 25 8,;1 1 _4,105 - -

Tctal capitalresources 7,677 56832 639 13,146 L,967 I_,L

Reqresented by:2/investments:

Agriculture 2,376 425 - 5,816 -ILndustry and

co.rrrerce 1,908 1,967 182 1,977 1,579 2148I.oans:Agriculture 293 11 - - 1,484 98Industry andcomnnerce 347 1,212 261 h,1i4 1,908 193

Other3/ 1,877 1,683 150 59 106 53Fixed Assets 4/ 220 149 2 907 348 22Short-term

investments 5/6/ - 429 9 214 - 363Net current assets

(liabilities 6/ 616 (44) 35 329 (458)

Total 7,677 £5.32 639 13,446 4,967 1,040

1/ Provisional figures.2/ Distrii-ution between categories may not be entirely accurate.3/ Loans to cooperatives and local authorities, and loans which cannot be

otherwise allocated.1/ Acministrative.

A/ At market prices.L/ Largely committed to approved projects.

Source: Development institutions concerned.

Table 12

Traffic Trends, Past and Projected

Annual orAverage

Freight AnnualMillion ton/miles Percentage

Year Rail Road River Total Increase

Pa3t 1955 937 1,200 99 2,236 18 91956 1,002 1,330 101 2,483 11.01957 1,099 1,500 110 2,709 9.11958 1,065 1,710 100 25875 6011959 1,214 1,830 120 3,164 10.11960 1,103 2,010 120 3,233 2,21961 1,393 n.a. n.a. n.a. n.a.1962 1,)19 2,4001/ 1251/ 3,9451/ n.a.

Projected 1967 1,750 b,070 145 5,965 9.11972 2,000 6,480 240 8,720 7.9

PassengersIiillion passenger/miles

Rail Road Air Total

Past 1955 349 5,600 9 5,958 1051956 395 6,4b0 10 6,845 1)491957 445 7,000 12 7,451 8M61958 459 7,900 13 8,372 12c41959 372 7,930 15 8,317 -0.71960 358 8,710 14 9,082 9G21961 b67 n.a. 18 n,a. n.a.1962 513 9 ,5)48J'/ 121/ 10,0801/ n.a.

Projected 1967 465 12,h00 28 12,893 5.11972 485 16,200 57 16,742 5.4

1/ Provisional.

Source: Federal Office of Statistics.Stanford Research Institute, The Economic Coordination ofTransport Development in Nigeria, 1961.

Table 13

Electric Power Production, Past and Projected

Energy Generation (million KWH)

Electricity NigerianInstalled Maximum Corporation Electric

Years ending Capacity Demand of Supply IndustrialMarch 31 MW 1, 4 2/ Nigeria Corporation Undertakings Total.

1956 84 39 154 73 11 238

1957 104 42 186 83 12 280

1958 107 54 230 82 14 326

1959 118 64 284 47 16 346

1960 125 73 34b 63 17 423

1961 169 94 Ul4 95 18 554

1962 206 122 532 101 16 649

1963 234 136 645 113 13 771

Projected:

1964 2)43 Y 161 804

1966 3562/ 223 1,112

1968 401l/ 288 1,458

1970 8012/ 363 1,865

1972 9612/ 447 2,302

I/ At January 1.

2/ ECN only.

Source: Federal Office of Statistics.Electricity Corporation of Nigeria.

Table 14

Central Dank of Nigeria

Balance Sheet

( L million)

31 December1959 190-S 961 :962 3.9633

Liabilities:

Capital paid-up ard reserves 0.3 1.3 1.7 J.,9 2,1Nigerian currency in circul-

ation 54.4 77.1 80,1 87.36 91,7

DepositsGovernments ) ±.1 1.6 1.4 1.3Bankers )3.1 1.4 3.4 1.4 1.1Others ) 0.3 0.2 0.5 o.8

Other liabilities 0.1 1.2 1.8 29' 2.3

Total liabilities 57e9 82.4 88.7 94.5 99.2

Assets:

External reservesGold - _ 7.1 7c1 7.1Foreign government securities

and balances with foreignbanks 52.8 76.5 68.3 69.6 57.4

West African Currency Boardnotes and coin 4.7 1.1 0.4 - -

Total external reserves 57.5 77.6 75.8 76.6 64.5

Federal government securities - 1.6 4.5 1.5 17.3

Rediscounts and advances - 1.8 7.0 14.8 15.9

Other assets 0.4 1.5 1.5 1.5 1.6

Total assets 57.9 82.4 88.7 94.5 99.2

Source: Central Bank of Nigeria

Table 15

Morley Supply

(T million)

December 31 .June 30

Currency in circulation I1b 19$9 1960 i96P1962 9M 196Notes 41.8 50.9 60.4 61.5 64.3 54.7 54.3Coin 26.0 24.9 26.4 25.4 23.0 18.2 17.4

Total 67.8 75.8 86.8 86.9 87.3 72.9 71.7

Less cash held by banks 6.7 8.5 8.1 7,6 7.5 6.0 5.3

Net circulation 61.1 67.4 78.8 79J3 79.8 66.9 66.4

Demand deposits 40.3 40.2 41rl 41.7 45.3 39.4 42.1

Total money supply 101.4 107.6 119,9 121.0 125.1 106.3 108,5

N4OTE: Includes Southern Cameroons for 1958 and 1959

1 Includes West African Currency Board (WA1ACB) notes and coin in circulatianfor 1958 and 1959 and WACB coin in circulation for 1960 and 1961.

Source: Federal Office of Statisticsand Central Bank of Nigeria

Table 16

Commercial Banks( T rn=1llio,n)

December 31 J_ ,T.e 301955 1959 1960 19Tl--962 _962 ].93

Deposits:Demand 40.3 40.2 41.1 41,7 45.3 39.4 42.1Time 6.7 10.8 9.0 14.1 17.4 14.7 1J8.3Savings 11.1 14.3 18.4 21.2 2l.2 23.4 26.1

Total 58.1 65.3 68.5 76.9 86.9 77.5 86.5

Loans and Advances 38.3 40.9 57.0 60.0 77.0 61.1 78.91/

Investments 1.3 1.3 1.0 1.3 1.6 2.0 1.52/ 3/ 3/

Cash and Banks 6.3 9.9 10J1 11.1 14.7 9.L 1104

Net Balances withBarn's Abroad 10.3 11.0 2.9 14.4 12.9 6.2 5.4

Nigerian Treasury Bil'ls - - 1,.9 3.0 3.4 8.9 5.3

NOTE: Southern Cameroons included in 1958 and 1959,

1/ Excluding Nigerian Treasury Bills.2/ Cash plus net belances with banks in Nigeria._/ Including call money with the Central Bank (-3.8 million in June 1963).

Source: Central Bank of Nigeriaand Federal Office of Statistics.

Table 17

Commercial Banks - Classification of Loans and AdvancesE m l ion)

Dec.31 Dec.31 June 30 Dec.31 June 30 Dec.311959 1960 1961 1961 1962 1962

AgricultureCocoa 2.6 2.7 0.7 2.8 1..3 4.7Groundnuts 3.4 5.2 1.7 5e9 2,3 8.6Other Export Crops 2.4 3.0 3.1 3.4 3.7 4.1Other Agriculture 1.0 0.4 0.3 0.4 0.3 0.7

Mining and Manufacturing 2.1 3,0 2.7 3.8 4.2 6.4Wholesale and Retail Trade 13.6 21.0 18.5 19.4 27.1 27.7

Construction 3.1 3.6 5.4 5.5 5.4 5.21/

Other 12.8 18.1 15.9 18,6 16.8 19.6

Total 40.9 57.0 48.3 60.0 61.1 77.0

1/ Including call loans and bills discounted.

Source: Central Bank of Nigeria.

Table 18

Importsand Exports{E million)

1958 1959 1960 1961 1962

Imports (c.i.f.)

Food, Beverages and Tobacco 23.8 26.6 30.1 28.8 28.3Raw Materials 2.0 2.1 2.2 2.5 2.4Fuels and Lubricants 8.9 10.4 11.3 1344 14.1Chemicals 8.9 10.1 12 .2 12.6 12,3Mianufactured Goods 81.4 83.7 10eO0 111.3 94.7Machinery and Vehicles 39.i4 42.7 51.7 50.4 48.3Other Imports 265 2.6 3,4 3.4 2,9

Total 167.0 178.2 215v9 222.3 203.0

Exports (f.o.b.)

Food, Beverages and Tobacco 3244 44O0 43.0 37.0 3765Raw Materials 79.9 9202 94.3 98.7 82,2Fuels and Lubricants 1.4 3,0 4.5 11.8 16,9Oils and Fats 1644 18.4 19.3 18.3 1.51Manufactured Goods 1.2 1.3 144 1.6 8,9Other Exports 1.4 l,6 2.9 2.7 3,3Re-exports 2.86 3 l 4 1 344 4.6

Total 135.6 163.6 169e7 173.5 168.6

Source: Federal Office of Statistics.

Table 19

Imports and Exports - Index Numibers

1950 1955 1958 1959 1960 1961 l962

ImportsQluantity 56 124 151 164 192 195 182Prices 92 98 99 97 102 102 101

ExportsQuantity 85 99 105 126 124 147 156Prices 73 88 85 89 90 84 80

1/Ternis of Trade 79 90 86 92 88 82 79

1/ Price index for domestic exports divided by price index for imports.

Table 20

Average Unit Prices of Principal axDortsp long ton)

1952 JIM4 1956 1958 1959 1960 1961 1962

Cocoa 250 399 205 306 268 238 183 171

Groundnuts 85 70 62 53 55 69 65 61

Palm kernels 61 49 45 46 60 62 49 46

Petroleum - - - 4.0 5.0 5.2 5.1 5,0

Rubber 226 140 168 182 217 250 201 190

Palm oil 102 64 80 74 75 76 80 75

Groundnut oil 158 123 117 95 97 114 110 98

Cotton 349 283 255 233 198 230 240 252

Tin ore 725 500 540 516 559 568 638 683

Source: Federal Office of Statistics.

Table 21

Principal Exports by Volume(thosandlong tons)~

1950 1956 1958 1959 1960 1961 1962

Cocoa 100 117 88 1h3 154 184 195

Groundnuts 317 448 513 498 332 I94 530

Palm kernels 410 4S1 441 430 419 411 367

Petroleum - - 245 537 847 2,239 3,368

Rubber 14 38 42 53 58 55 60

Palm oil 173 185 171 184 183 165 119

Groundnut oil 4 35 40 48 47 45 63

Cotton 13 28 34 37 27 46 23

Cotton seed - 37 60 45 40 73 43

Timber (logs) 9 11 15 19 22 20 161/

Timber (sawn) 1 2 2 2 2 2 2

Colum.bite 1 2 1 2 3 2 2

Tin (metal content)G 10 6 6 8 8 8

1/ Million cubic feet.

Source:Federal Office of Statistics.

Table 22

Principal Exports by Value(E -.Li on)

1950 1956 1958 1959 1960 1961 1962

Cocoa 19.0 24.0 26.8 38.3 36.8 33.7 333

Groundnuts 15.3 27.8 26.9 27.5 22,9 32.2 32 4

Palm kernels 16.7 20.4 20.5 26,0 26.1 19.9 169

Petroleum - - 0.9 2.7 4.4 11.5 16.7

Rubber 2.8 6.4 7.6 11.6 14.2 11.0 11o4

Palt oil 12.1 JL.9 12.7 13.8 14h0 13.2 9.0

Groundnut oil 0,3 4.1 3.7 4.6 5.3 5.0 6,2

Co-tton 3.0 7.1 7.8 7.3 6.2 111 54,

Cotton seed - 0.9 1.1 0.9 1.0 1Z9 1c0

Timber (logs) 2.1 2,9 4.1 4.9 5.9 55G4

Timber (sawn) 0.3 1.0 1,2 1,2 1l1 1,2 123

Colurmbite 0.3 1,8 0,$ 1.1 2i1 1.2 1.1

Tin 6.o 7.2 3.9 4.2 6.0 6.6 7.1

All DomnesticExports 88.9 132.3 132.8 160,5 165.6 170J1 164.0

Source: Federal Office of Statistics.

Table 23

Export Prospects - Vol1Xie('000 long t

1961 '-61 1962 PrciectionsBa c.Actual Actual 1962 l699763 19g196_'lear-____

Cocoa 170 184 195 173 187 197 207 218 229

PaLm kernels 420 411 367 420 420 420 420 420 4202/

Palm oil - edib-1h160 144 115 164 179 191 192 191 1922/

Palm oil-teThnical 34 21 3 37 38 39 40 41 42

Cotton lint 410 46 23 42 45 48 54 63 71

Cotton seed 46 73 43 52 59 65 78 96 113

Grouridnuts 438 494 530 470 490 515 559 601 650

Groundnut oil 51 45 63 51 58 65 71 78 78

Groundnut cake 34 75 88 34 38 43 47 51 51

Rubber 57 55 60 61 61 6L 62 62 633/

Timber 26 22 18 28 28 28 29 32 33

Petroleum 2,224 2,239 3,368 3;000 4,500 5,300 6,800 8,200 9,700

Tin 9.5 8 8 9.5 9.5 9g5 9.5 9.5 965

Columbite 3.6 1.8 2.3 3.9 4.3 4.6 5.1 5.5 6.0

1/ Averages used as a base for calculating export increases.2/ The original projections are now believed to be too high: it is unlikely

that exports will rise in the Plan period above the average for the lastfew years, i.e. 140,000 tons for edible palm oil and 20,000 tons fortechnical palm oil.

3/ VLillion cubic feet.

Source: Federal Ministry of Economic Development.

Table 24

Export Prospocts -_ummary

Prices f,o.b. (£ per long ton) Volume ('000 tons) Value (Z million)1967 1967

1962 1967 1962 Plan RevisedPlan21/ Fore- 1962 / ore-/ Fore-1 1962 Fore,/ Fore-

Plan estimate- 1962 Actual-- cast3/ Actual -cast- cast Actual cast°' cast'

Cocoa 160 171 178 195 229 28A5 33.3 36.6 37.8Palm kernels 41 h6 h20 367 420 17.4 16.9 17.h 1h43Palm oil - edible 68 76 163 115 192 11.2 8.8 13,2 838- technical 57 53 37 3 42 2.1 0.2 2.4 1.0Cotton lint 225 252 142 23 71 9.5 5,9 16eO 16.0Groundnuts 50 61 470 530 650 23.5 32.h 32.5 32.5Groundnut oil 86 98 51 63 78 h.5 6.2 6.6 6.6Rubber - 1962/65 210 190 61 60 12.8 11.4

- 1966/67 160 63 10.1 9.3Tin (metal) 760 917 9.5 8,o 9.5 7.2 7.1 7.2 8.3Petroleum 5,3 5.0 3,000 3,368 9,700 15.9 16.7 51.4 56.8

All Domestic Exports 162.7 164.0 233.6 231.6

1/ Estimates made in 1961 by IBRD and Federal NIinistry of Economic Development; prices were assumed in the Plan to rununchanged fron 1962 to 1967, except for rubber,2/ Average unit prices of exports in 1962.

P/ Plan forecast of exports in 1962./ Actual exports in 1962.g/ Plan forecast of volume of exports in 1967.g/ Expcrt values based on Plan forecasts of volume and prices.7/ Export valuzs based on Plan forecasts of voltme (except for ,paln oil and petroleum, where revised forecasts havebeeoo us3d) and Plan forecasts of prices (modified as rlecessary in the light of miore recent forecasts).

Source: National Development Plan: 1962-68.Federal MA-ni½str:r of Econo.mic Developmentand IBRD Econo;mz;^ Staff.

Table 25

Principal Imports

IJnit 1956 1958 1960 1961 1962Cotton piece goods million

sq. yds. 149 173 211 245 149Rayon piece goods million

sq. yds. 158 152 101 90 44Beer million

imp. galls. 606 623 7.2 7.1 5,0Unmanufactured thousand

tobacco tons 2.5 2.4 1.8 1.9 119Bicycles thousands 181 115 160 99 79Private cars and

taxis thousands 7.0 8.2 14 .6 14.b 13e2Cement thousand

tons 489 477 626 177 335Corrugated iron sheets thousand

tons 50 30 38 34 30Commercial vehicles thousands 8.1 6.9 6.4 8.0 6.7Petroleum oils 1/ million

imrp., galls. 90 116 143 168 176Electrical machinery value £m. 5.0 5.9 9.7 8e2 10.8Other machinery value £m. 9.0 11.7 15.4 18.0 20.8

1/ Retained imports.

Source: Federal Office of Statistics.

Table 26

Balance of Payments

(£ million)

19.54 1957 1959 1960 1961 1962

Cutrrent Account

Exports (f.o.b.) 149 126 162 167 171 167Imports (c.i.f.) -116 *-155 -180 -217 -224 -205

Balance of trade +33 -28 -18 -50 -53 -38

Services (net) -7 - -15 -18 -1il -16

Private donations -1 -2 -5 -6 -6 -6

Current balance +25 -34 -39 -74 -74 -61

Capital Account

Private capital (net) +10 +17 +24 +19 +30 +20

Official loans andgrants (net) -1 +3 +8 +19 +11 +9

Net change in assetsof:

Governments n.a,2/ n.a.2/ 18 +11 +2 +12harkcting boards -15 -2 -3 +15 +18 -1Other official -12 +3 +42 +16 +3 +11Commercial banks -8 +6 -2 +15 -9 +7Central Bank - - -58 -20 +2 -1

Errors and Omissions +1 +7 +4 - +18 +4

1/ Subject to revision.2/ Included in other official.

Source: Federal Office of Statistics.Central Bank of Nigeria.

Table 27

External Reserves

( million)

at March 31 at Sept.301955 957 1959 -1961 1962 1963 19-63

Central Bank - - - 66 66 62 69

Currency Board 54 61 60 9 6 - -

Federal Government 47 52 49 31 30 27 13

Regional Governments 23 42 36 21 20 6 7

Local Governments 3 3 3 4 4 n.a. 3/ n.a. 3/

Marketing Boards 74 38 31 8 -1 -0 5

Regional Develop-ment Corporations 13 9 6 1 1 n.a. 3/ n.a. 3/

Other semi-official 20 11 14 12 8 10 3/ 9

Total official 234 216 199 152 134 105 103

Net balances of com-mercial banks 2/ 29 23 26 10 12 6 2

Total 263 239 225 162 146 111 105

-/ Provisional2/ Including Post Office Savings Bank3/"Other Semi-official" inoludes Local Governments and Regional Develop-

ment Corporations.

Source: Federal Office of Statisticsand Central Bank of Nigeria

Tab]e 28

GJovernment Revenues and Expenditures

(£ million)

Federal East North West Total

1957/58 Revenues 42 13 13 16 83Current Expenditure 31 12 13 12 68Current SurDlus '1 0 -O 4 1Capital Expenditure 16 2 6 14 29Overall deficit v -2 -7 -° -14

1958/59 Revenues 47 13 '5 17 92Current Expenditure 35 1 13 114 72Current Surplus 12 2 2 3 19Capital Expenditure 27 3 6 6 42

Overall Deficit z -1 --3 -23

1959/60 Revenues 50 15 18 20 102Current Expenditure 40 13 15 17 8,Current Surplus 10 2 3 2 17Capital Expenditure 33 4 6 19 55Overall Deficit -23 -2 -3 - 9 -38

1960/61 Revenues 63 17 18 20 118Current Expenditure 146 15 17 21 99Current Surplus 17 2 1 -0 20Capital Expenditure 39 4 7 14 63Overall De°icit -22 -2 -1 14 -L4

1961/62 Revenues 67 19 21 24 131Current Expenditure 53 17 19 20 1-10Current Surplus 7 2 2 4 22

Capital Expenditure 29 9 9 13 60Overall Deficit -16 -7 -7 -9 -39

1962/63 (Revised Estimates)Revenues 70 20 24 23 136Current Expenditure 61 18 22 20 121Current Surplus 9 2 2 3 -17Capital Expenditure 3 12 8 8 64Overall Deficit -6 -10 -6 -6 -48

1963/64 (Estimates)Revenues 75 22 24 23 143

Current Expenditure 6 20 24 21 135

Current Surplus 6o 1 0 1 iCapital Expenditure 50 11 8 11 81

Overall Deficit -10 -10 -72

Source: Data supplied by Federal and Regional Ministries of Finance.

Table 29

Sources of Government Revenue* ~~ ~ ~~~~~1/ 2/

1957/8 1958/9 1959/60 190O/1 1961/2 1.962/3 1963/'-2(3 miJ1icnr --

Tmport and exc-iseduties cn tobacco 8 8 9 8 8 8 9

Import duty on motorspirit and diesel ol12 2 5 6 7 9 10

Other import andexcise du-ties 29 30 33 46 48 52 56

Export duties andproduce taxes 13 16 17 15 13 13 1h

Income and otherdirect taxes 11 12 10 12 13 16 17

Ot'her revenues 21 24 29 31 42 38 38Total revenues 8T -72 T107 11B 131 T36 TT

as percent of total revenues

Import and exciseduties on tobacco 10 8 9 7 6 6 6

Import duty on motorspirit and diesel oil 2 3 5 5 5 7 7

Other import andexcise duties 35 33 32 39 36 38 39

Export duties andproduce taxes 15 18 16 12 10 10 9

Income and otherdirect taxes 13 13 9 10 10 12 12

Other revenues 25 26 29 26 32 28 26Total revenues _m'100 100 'OO 100

1/ Revised Estimates.2/ Estimates.

Sources: Federal and Regional Ministries of Finance.

Table 30

Government Recurrent Expenditures

E million PercentFederal East North West Total of Total

1957/8Defense 2 - - - 2 3Education 1 6 3 5 14 20Health 1 1 2 1 5 8Primary production 1 1 2 1 4 6Transport, Caommunications

and public works 8 1 2 1 12 18Public Debt Service 2 0 0 1 3 4Administration and other 15 4 6 3 28 41Total 31 1_ _3 12 -6 100

1961/2Defense 5 - - - 5 4Education 3 7 4 9 23 21Health 3 2 2 2 9 9Primary production 1 1 2 2 6 5Transport, Communications

and public works 13 2 2 2 18 17Public Debt Service 6 0 2 1 9 8Administration and other 22 5 7 4 40 37Total _5_ 17 ___ 20 110 100

1963/4(Estimates)Defense 6 - - - 6 4Education 5 8 5 9 27 20Health 4 2 3 2 12 9Primary production 1 2 3 2 9 6Transport, Communicationsand public works 15 2 3 2 22 16

Public Debt Service 12 1 2 1 15 11Administration and other 26 5 8 7 44 32Total -69 2_0 __ _ -1-35 100

Source: Federal and Regional Ministries of Finance.

Table 31

Government Capital Expenditures

(£ Millions)

Year Federal Fast North West Total

1955/'6 6 2 3 5 16

1956/7 11 2 5 5 23

1957,/8 16 2 6 4 29

1958/9 2? 3 6 6 42

1959,160 33 4 6 12 55

1960/61 39 4 7 14 63

1961/62 29 c 9 13 60

Total 1/ 161 27 42 59 289

1/ Excluding expenditures of Statutory Corporations,except thosemade from funds provided by governments.

Sou.rce: Data supplied by Federal and Regional Ninistries of Fin,arc'm

Talle 32

Public Capital Expenditures and Fin2ncial Resources

1955--62 and 1962-8

1955--62 l9629-8

£ Million % of Total £ Njillion % of Total

Expenditure

Agriculture 19.1 5 91.8 14Trade and industry il.h 3 90.3 2-3Electricity 21.8 6 101 7 15Transport

Roads 52.9 15 77.7 11Rail 42.7 12 20,2 3Ports and waterways 22.7 6 39.1 6Air 2.7 1 6,8 1

Communications 15iO 30,0 4Water supplies 17.4 5 24J3 hEducation 23.9 7 69.8 10Health 10.6 3 18.2 3Other 110.L 31 107X0 16

Total 350.6 100 676.8 100less Underspending - - -23.0 -3

Total 350.6 100 653.8 97

Financial Resources

Current bud0et sur-pluses 124.9 36 16.9 3

Other ievenues 3O6 1 9.4 1Use of reserves 320o 9 37.5 6Statutory corporations 37.2 11 80.0 12Marketing boards 69.8 20 39.1 6Domestic borrowing 30.9 9 80.1 12External loans andgrants 52.2 15 327.1 50

Uncovered gap - - 63.7 10

To-tal 350.6 100 653.8 100

Source: Data supplied by Federal and Regional Yinistries of Financeand National Development Plan, 1962-68.

Table 33

National Developroent Plan, 1962-68

Consistency Test with National Accounts _rojections

(At constant 1960 prices)

(f million)

Total1960/1 1962/3 1963/4 1964/5 1965/6 1966/7 1967/8 1962--68

A-vai2able Resources

Gross domesticproduct 1112,5 1203M3 1251.4 1301.5 1353.5 1407.7 1464,.0 7981,5

Imrport surplus 6265 83.9 77.6 76.1 7487 86.4 81.8 480o,

Total resources 1175.0 1287.2 1329.0 1377.6 1428.2 1494.1 1545.8 8462fO

Use of Resources

Privateconsumption 922~0 986.5 1013.8 l036.8 1062,3 1094.6 1125el 6319-1

Gcvernmentconsumption 85.0 110.2 118.9 132.9 154.4 162,4 173.3 8L31'

Gross fixedinvestment 158.0 179.7 186.8 193.6 200.6 207e2 215.4 1183 3

Inventoryaccumulation 10.0 5.7 3.6 3.4 3.5 3.3 4.1 23,6

External debt..service - 5.1 5.9 10.9 16.4 26.6 27.9 92e8

Source: W. Stolper: Prospects for the Nigerian Economy,

Table 3h

Gross Domestic Product

(At Viarket Prices)

1950-1960, and Projection 1960-1967

(£ million)

Excluding terms Including terrmsof trade effects of trade effects

at 1957 prices

1950 699 6961951 754 7601952 809 8151953 828 831195h 893 9121955 922 9341955 90h 9051957 939 9391958 971 9781959 988 1,0061960 1,023 1,0j341961 at 1960 pri ces

1960 1,113 1,1131967 1,522 1,L6h

Annual rates of growTth (compound)

1950-1960 3,9%o 4.0o1950-1955 5.7% 6.1%1955-1960 2.17 2l0/

1960-1967 4.6% L.Os

NOTE: The GDP series including terms of trade effects wascomputed as follows:

(i) deflate exports by the index number of import prices;

(ii) add the difference between exports deflated Ity import pricesand exports deflated by the index numbers of exportprices to GDP in constant prices.

Sources: National Development Plan, 1962-68 andW. Stolper: Prospects for the Nigerian Economy.

Table 35

Shares of Sectors of Production

In Gross Donmestic Product

(Two-year averages, as percentagesof GDP at factor cost)

1950/51 1955/56 1959/60

Agriculture 56 53 8Livestock 8 7 6FishLng 1 1 2Forest products 2 2 2Flining and Oil 1 1

Primary Industries 68 64 58

I'lanufacturing, utilities 1 1 2Handicraft 3 2 3Construction 2 4 6

Secondary Industries 6 7 11

Transport and communications 5 7 9Ownership of buildings 1 1 1Government 2 3 4Land development 1 1 1All other services 18 17 16

Tertiary Industries 27 29 31

Total 100 100 100

NOTE: Figures for 1959/60 are based on 1957 price data; their com-parability to other percentage figures tased on current pricedata may be slightly limited.

Source: P.N.C. Okigbo - Nigerian National Accounts, 1950-57and Federal rinistry of Economic Development.

Table 36

Fxpenditure as Percentage of GDP

(at market prices)

1950 195t, 1955 1957 1960 1962/621/ 1967/681Y

Private consurmptio:i 87 85 87 87 83 82 77

Public consumption 3 4 5 5 8 9 13

Fixed investment 6 9 10 12 14 15 16

Change in Stocks 2/ -1 1 1 1 0 0

Net current accountbalance 5 3 -3 -5 -6 -6 _6

Total (GDP) 100 100 100 100 100 100 1CO

1/ Fiscal years.

2/ Partial data for Nlarketing Boards only.

Source: Table 3and W. Stolpert Prospects for the Nigerian Econorny.

Table 37

Investment and Savings Estimates,

1950's and Projections 1962-68

(£ million)

Projections1951 1953 1955 1957 1959 1962-1968

(aimnual average)'Gross Domestic Investment

Pub-lic 16 20 35 46 59 1i0Private 26 39 56 76 78 65Inventory accun-iulationl/ __

Total h2 59 91 122 137 209

Current Account BalanceIncl factor payments 7 16 --21 -41 -h9 -80Excl. factor payments 12 19 -22 -46 -47 -72

SavirgsDomestic 54 78 69 76 90 137National 49 75 70 81 88 129

NOTE: For estimates of factor payments during 1962-68, see Table 38.

1/ For 1951-1959, included in public and private investment.

Source: 1951-1957: P.N.C. Okigbo - Nigerian National Accounts, 1950-57.Nation'al Developrrment Plan' 1962-681959: Federal IPinistry of Economic Development.

Projection: V, Stolper, Prospects for the Nigerian Econo=

Table 38

Estimates of Savings and Revenues

1955-1962 and 1962v-1 968

1955-62 1962-627 £ million)

Gross national savings 1/ 582 77hGross domestic savings 595 820Gross savings of public sector 2/ 3)° 252Current revenue of governments 3/ 676 980

Cross national product 1/ 6,980 7,935C-ross domestic product 6,993 7,982

(as % of GDP)

Cross national savings 8.3%o 907%Gross domestic savings 8o5 10-3%Gross savings of public sector h49%ro 3.1 %Current revenue of governments 3/ 9.7% 12,32

(rate of taxation)1955/62-1962/68

Mlarginal rate of gross national savings 13.826Iarsinal rate of gross domestic savings 15 62%Mlarginal rate of gross savings of public sector negativeYarginal rate of taxation 20.1%6

NOTES: Figures for 1955-62 are partly estimated.

harginal rates of savings and taxation were computed as the ratios bet7wee:the increase in the annual averages of savings and taxation (in £ figures?and the increase in the anrual averages of GDP (in £ figures) from 1955-62to 1962-68.

1/ The difference beti,een gross national savings and gross domestic savings (alsobetwTeen GDIP and GDP) consists of net factor payments with the rest of the world.For the period 1962-68 only interest payments on the public external debt (as--sumed to amount to roughly one-half of external public debt service) were in*-cluded. This is presumably understating future factor payments due to the restof the world, and therefore overstating the national savings rate.

2/ Includes savings from the current budgets of Federal and Regional Governmentsand Local Authorities, gross profits of statutory bodies and loans and grantsfrom IarkEting Boards. Savings of the public sector in 1962-68 are underesti.mated to the extent that additional resources might be forthcoming from harket-ing Boards and by the inclusion of amortization payments on external debt inrecurrent expenditures.

3/ Current revenues of Federal and Itegional Governments only.

Source : National Development Plan, 1962-68, wV Stolper: Prospects for theNigerian Economy, and P.N.C. Okigbo. Nigerian National Account L05O.- 7.

Table 39

FLd.ral Goverrimcnt Capital Expendi-tures. 19~5-62 and 1962-68

195 5 62 1.962-3

mi.l-lion Percent T million Percent

Primary production 0Q9 0 20,5 5

T'rade and industry 1.8 1 4400 11

Electricity 19.3 9 98.1 24.t

Transport: Roads 23.2 11 37.8 9

Railway 42.7 21 20.2 5

Ports and Waterwrays 22.7 11 39.1 9

Air 2.7 1 6O.8 2

onmTan i v-ti cns 1KG 7 3-.0 7

Wilater Suoplies 1.8 1 1.9 0

Education 81 it 29.2 7

Health 3.3 2 10.3 2

Other 63.1 3n1 7__6 18

Total 204h6 100 h12A5 100

Source: Federal Miinistry of' Finance.Federal Miinistry oI Economic Development and National DevelornentPlan, 1962-68.

Table 4o

EastertNirera Capital Expenditures, 1955-62 and 1962-63

1955-62 1962-68

D million Percent L million Percent

Primary production 3%6 12 ,°.4 LO

Trade and industry 2.4 8 12.9 17

Electricity - - 0,6 1

Poads 7.3 25 8.8 12

Waoer supplies 3.5 12 f.. 7

Education 2.3 8 8.8 12

Health 2.0 7 1.8 2

Other 8.2 28 68 9

Total 29.3 100 75.2 100

Source: Ministry of Finance, Eastern Nigeria.Ministry of Economic Planning, Eastern N-igeriaand National Development Plan, 1962-68.

Table ll

Northern Nigeria Capital Expenitums 19 5-62 and 1962-f8b

1 9 55' -6 2 1962-68

D million Percent T million Percent

Primary production 3,8 8 22.5 23

Trade and industry 2.9 6 9 9 10

Electricity 0,9 2 1.5 2

Roads 11.3 23 24.7 25

Water supp'lies 5.8 12 7.4 7

Education 7.3 15 18.9 19

Health 2.6 5 4.4 4

Other 13.9 29 965 1.0

Total 48.5 100 98.8 100

Source: l'inistry of Finance, Northern Nigeria.lvlinistry of Economic Planning, Northern Nigeriaand National Development Plan, 1962-68.

Table 42

Western Nigeria Capital Expenditunres 1955-62 and 1962-63

1955-62 l962-68

E million Percent b million Percent

Primary production 10.8 16 18.4 20

Trade and industry 4.3 6 23.4 26

Electricity 1,6 2 15 2

Roads 11.1 16 6.3 7

Water supplies 6.3 9 9.9 11

Education 6.2 9 12.9 14

Health 2G7 4 1.6 2

Other 25.2 37 16.3 18

Total 68.2 100 90.3 100

Source: The Treasury, Western Nigeriaand National Development Plan, 1962-68.

Table L 3

Progress with the Plan - Governments' Capital Programs

(Z million)

1962-8 1962-8 1962/3 1963/4 1964-8Plan Revised Revised

Totals Totalsl/ Estimates Estimates BalancesFoxpenditure

Priniary production 2/ 91.7 92.4 11.2 1.l1 70.1Trade and incdustry 90.3 8904 5.2 923 7b.9Electricity 101.7 118.7 5.9 12.6 100.2Transport

Roads 77;7 80o.8 11.7 12^8 56.3Railways 20.2 25,1 5.4 8,9 ll.1Ports and waterways 39.1 45.0 923 8.5 27.2Air 6.8 7,7 1.9 2,6 3.2

Connmunica-tions 30.0 28ji 2.7 1.4 240OWater supplies 2143 2h14 4,8 6.4 13.2Education 2/ 69.8 7214 7.1 11.0 5143Heal-th 18.2 18.8 208 1.8 114.2Defense 29,7 34.3 6.2 9.6 JA8,5Other 77.3 86.5 19.4 18.9 48.2

Total 676.8 723.9 93-6 114.9 515.4less Uinderspending -23.0 -30.1 -15-4 -21A8 -11 5plus Rev'rtes - ___ - 13.0 5;6

Total 653.8 693.8 78,2 106.1 509,5

Financial ResourcesBudget surplus 16.9 24.o 15.5 8.6 -0.1Other revenues 914 10.3 2.7 1.1 6.5Use of reserves 37.5 37,4 15.0 17.8 4.6Statutory Corporations 80.0 75.9 9.2 12.1 r4,6Marketing Boards 39.1 39.1 4.5 6.5 28.1Borrowing from Central

Bank 33.7 hO.0 5.0 - 35.0Internal loans and grants b6.4 60.3 12.2 29.5 18.6External loans and grants 327,1 347.0 14.1 30.5 302.4Uncovered gap 63.7 59.8 - - 59.8

Total 653.8 693.8 78.2 106X1 50905

1/ Revised totals for expenditures for Federal Government and F-astern Nigeria only.2/ Including Federal Grants to Regions.

Source: Federal and Regional hinistries of Finance.Federal Piinistry of Economic Development.Regional hinistries of Economic Planning.National Development Plan, 1962-68.

Table 4

Federal Government - Progress with the Plan

(£ lNillion)

1962-8 1962-8 1962/3 1963/h 1964-8Plan Revised Revised Estimates Balances

Totals Totals Estimates

ExpencditurePrimary production 20.5 1/ 20.6 1/ 5.2 2 202 3/ 132Trade and industry 4.0 4.2 23 4.9 37.0Electricity 98.1 115.1 5.9 12.6 96.6Transport

Roads 37.8 ko0.8 6.1 8.7 26,ORailways 20.2 25.4 5X 8.9 11.1Ports and waterways 39.1 45.0 9e3 8.5 27.2Air 6.8 7.7 1.9 2.6 3.2

Communications 30.0 28.1 2.7 1.4 24.0WIaer supplies 1.9 2.0 04h 0.5 1.1Education 29.2 4/ 32.3 4/ 3.6 5.3 5/ 23.4Health 10.3 11.0 1.9 0.7 8-dDefense 29.7 34.3 6.2 9.6 18.5Other UL49 52.2 13.6 13.3 25,3

Total 4L12.5 458.7 64.5 79.2 315,0less Underspending -5.6 -13.3 -14.9 -17.0 _plus Revotes - - - 13.0 5.6

Total 406.9 445.4 49.6 75.2 320.6

Financial ResourcesBudget surplus 27.0 27.0 9.0 5.5 12e5Use of reserves 30.0 30.0 12.1 11.2 6.7St,atutory corporations 80.0 75.9 9.2 12.1 54.6Borrowing from Central Bank 33.7 40.0 5.0 - 35x0Internal loans and grants 30.0 30.0 2.1 18.0 9.9External loans and grants 203.5 222.7 12.2 28.4 182.1Uncovered gap 2.7 19.8 - - 19,8

Totals 406.9 445.4 49.6 75.2 320.6

1/ Including grants of £10 million to Regions.2/ Including grants of £4 million to Regions.3/ Including grants of £1 million to Regions.E/ Including grants of £7.2 million to F.egions.5/ Including grants of £3 million to Regions.

Source: National Development Plan, 1962-68.Federal 1inistry of Finance.Federal 1Ninistry of Economic Development.

Table L5

Eastern Nigeria - Progress with the Plan

(; million)

1962-8 1962.-3 1962/3 1963/4 196h-8Plan Revised Revised

Totals Totals Estimates Estimates BalancesExpenditures

Agricultuare 30.4 30,9 2,7 3-9 2)j.,3Trade and industry 13.5 12,5 2,L 3.0 7 1Roads 8.8 9.0 2.1 1.6 5 3Waater supplies 5.1 5.1 12 1.0 2;.9Edticatio4n 8.8 3c3 0.7 lL 6,2Health 1.8 1.8 0.2 0,2 1 hLLOther 68 8,5 3.1 1.9 365

Total 75.2 76,1 12,h 13.0 50,7less Underspending -.75 -6,9 -0.5 -2.1 4 3Total 607 69,.2 11l 9 10 .9 ___

Financial Resources

Budget surplus -5.5 6o0 1,6 103 31Use of reserves 60o 3,5 35 3W0 -3,0Narketing board 14,l 141 2.0 4h0 8.1Internal loans and

grants n.a. 11.5 2 0 1,8 7.7External loans and

grants 33e9 34.6 0,7 0.4 336 5ENDC plantation

earnings 2,0 2,0 - - 2,0Realization of in-

vestments 2.0 2.0 - 2,0Other revenues 3.2 3.2 2.1 o0L' 0 7Uncovered gap 12.0 - 7 - 7.7

Total 67.7 76.9 119 10.9 4604

Source: National Development Plan, 1962-68.Ministry of Finance.Ministry of Economic Planning.

Table 46

Northern Nigeria - Progress with the Plan

(£ million)

1962-8 1962-8 1962/3 1963/4 19614-8Plan Revised Revised

Totals Totals Estimates Estimates BalancesExpenditures

Agriculture 22.5 1.6 3.0 17.9Trade and industry 11.14 0.2 1.0 -10,2Roads 24.7 1.9 1.6 21,-9Water supplies 7.14 12 2.14 3.6Education 18.9 1.6 1.3 16.0Health 4.4 0.5 0.5 3.14Other 9.,5 1.3 114 6.8Total 77 11.2 79-,less Underspending -9 9 -2.7 j -702Total T9 -_ -8.5

Financial Pesources

Budget surplus -16.1 -11.5 2.0 0.5 -17.0Use of reserves - 2.4 2.1 0.3 Marketing board 15.0 15.0 - - 15.0Internal loans and

grants 16.4 1/ 10.1 3,1 6.0 1,0External loans and

grants U-.5 41.5 o.6 1.3 1426OthEr revenues - 0.9 0.5 0.4 -Uncove;ed gap 29.1 30.5 - - 30.5Total 78.9 T8.9 7201

,/ Including £12 million borrowing through Federal Government.9/ Reserve Expenditure

Source: National Development Plan, 1962-68.Mlinistry of Finance.Miinistry of Economic Planning.

Table 47

Western NiFeria -_Progress wHith the Plan

(£ millionl)

1962/31962--8 1962-8 Estimated 1963/4 1964-8Plan Revised Actual

Totals Totals Ex.penditures Es-timates BalancesExpenditures

Agriculture 18G4 1.7 2e0 1L.7Trade and industry 24.9 0.3 0.4 24.2Roads 6.3 1.6 0.9 3.5Water supplies 9.9 2.0 2,5 5OuEducation 12.9 1.2 3.0 8.7Health 1.6 0.2 0.4 1.0Othler 16.3 1.4 2.3 12,6

Total 90.3 8.4 11.5 70.4less TJnderspending -

Total 90.3 T877 11 50-T

Financial hesources

Budget surplus 11.5 5.5 2.9 1.3 1,3Use of reserves 1.5 1.5 -2.7 3.3 0.9hiarketing board 10.0 10.0 2.5 2.5 5.0Internal loans andgrants 8.7 5. 0 3.7 -

External loans andgrants 45.2 45.2 0.6 0.4 44.2

Other revenues 2.2 2.2 0.1 0O3 1.8Uncovered gap 19.9 17.2 - - 17,2

Total 90,3 90.3 8.4 11.5 70.4

Source: National Development Plan, 1962-68.The Treasury.I-inistry of Economlc Planning and Ccrmunity Development.

Table 48

Public External Debt

Debt outstanding at June 30, 1963:

2R million $ million

Total, including undisbursec. 67,5 189.-0

Publicly-issued bonds l0 8 t0e3Privately-placed debti/ 1l,6 32.4IBRD loans 14o4 LOD4US Government loans l 3 3 5UK Government loans 2h49 69,6Israeli Government loan 2.8 7-9Swiss Government loan 1,7 L09

Major reported additions, July 1 to December a, 1963:

; million $ million

Total, debt contracted 154 h3432

Publicly-issued bonds 4, 2 11L9US Government loans 7,4 20G7UK Government loan 15 4,2German Government loan 2o3 604

1/ Data in respect of supplierst credits are largely estimates.

Source: IBRD Economic Staffs Statistics Division.

Table L9

Est.iniated De'bt So7,i.ce Payments, 1963-68

Debt Outstandi"g Annual Pa.ymentsYear c:n JanualyL1W7- Amcrtization Interest- Total

1963 60.7 3.5 2.4 5.2

1964 75.2 3.7 3.0 6.7

1965 72.0 L.1 3.5 7.6

1.966 68.7 9.8 365 13.3

1967 60.1 It.6 3.1 7.7

1968 55.9 4.hI 2.8 7.2

1/ Including undisbursed loans and major reported additions July 1, 1963to December 4, 1963.

Source: IBRD Economic Staff, Statistics Division.