AN ANALYSIS OF DEVELOPMENT IN NIGERIAN BALANCE OF PAYMENT (1995 – 1999)

CHAPTER ONE
INTRODUCTION
In an era when advancements in travel and communication technology have reduced the whole world to what may at best be described as a global village and the barriers that had hither to separated one country from the other appear to have been reduced to the bearest minimum, economic relationships can be established with little or no difficulty amongst nations. Consequently, there is a continuous flow of resources across boarders.  The continuity which characterizes the flow of resources makes reckoning imperative balance of payment statement is the means through which the reckoning is performed ad it is a summary of a country’s international transaction.
SCOPE AND LIMITATION OF THE STUDY        
This study was designed to analyze the recent developments in Nigeria balance of payment from 1995 – 1999.  
a.    For a study of this nature to be useful to many parties at the same time, there is the need for adequate statistics to measure for instance:
i.         The influence of foreign trade and transaction on the national income of the country.  
ii.        To determine the effect of changes in tax and tariff on foreign trade etc.
In Nigeria, the scarcity of accurate national statistics is a common knowledge. Even when they are available, the quantity, quality and turning of the supply is a major problem.  This researcher did not have access to adequate statistics for the type of analysis enunciated above and consequently did not attempt to measure the indexes refereed to above.  
b.   Another problem encountered while conducting this research was that of differentiating the impact of one-policy measures from that of others.  For instance, within the period under study, others policy measures such as income policy, trade as well as fiscal policies were at one time or another targeted at the balance of payments. The result is that even the most rigorous analytical technique cannot sufficiently disentangle the maze of inter relationships and assign success or failure to each policy measure with a time-space dimension.  What this researcher did was to adopt in a global sense a lump sum approach in evaluating the effectiveness of various policy measures on the balance of payments.  
c.   Another important limitation was the scarcity of books and related literature on the subject matter written with the Nigerian background.  As a result of this limitation due reliance was placed on official publications and foreign.  
d.   A fourth and perhaps the most limiting problem encountered was the un-co-operative attitude of some academic staff of some universities and government officials who were consulted for advice. In some cases, some of the officials and lecturers displayed amazing ignorance over the subject matter. In other cases, they were not just willing to co-operate and for these reasons, official publications were extensively used.      
1.1    DEFINITION OF TERMS        
For the purpose of this research work, all terms and expressions used shall be attributed their ordinary interpretations unless otherwise stated. However, the following terms shall mean:                
BALANCE OF PAYMENT:    A systematic record of economic transaction for a given period between residents of an economy and non-residents. These transactions include the provision and receipts of real resources – goods services and income and changes in claim on and liabilities tot he rest of the world.  
MONETARY POLICY:   The management of the expansion and contraction of the volume of money in circulation for the specific purpose of achieving certain declared national objectives.        
EXCHANGE RATE POLICY:  Exchange rate policy involves choosing a foreign exchange management system and determining the particular rate which foreign exchange transactions will take place.  
EFFECTIVENESS:  It is defined as the attainment of pre-determined goals.