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The Size and Sustainability of Nigerian Current Account Deficits

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  • Mr. Olumuyiwa S Adedeji

Abstract

This paper uses an intertemporal model of the current account and macroeconomic indicators to examine the size and sustainability of Nigerian current account deficits over the 1960-97 period. The results indicate that the Nigerian economy appeared to satisfy its intertemporal budget constraint during this period. However there were years marked by excessive current account deficits. The results also support the view that current account deficits accompanied by macroeconomic instability and structural weaknesses can degenerate in to an external crisis.

Suggested Citation

  • Mr. Olumuyiwa S Adedeji, 2001. "The Size and Sustainability of Nigerian Current Account Deficits," IMF Working Papers 2001/087, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2001/087
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    Cited by:

    1. Shruti Shastri & A. K. Giri & Geetilaxmi Mohapatra, 2018. "Testing the Sustainability of Current Accounts for Major South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 19(1), pages 1-21, March.
    2. Ayla Ogus & Niloufer Sohrabji, 2008. "On the optimality and sustainability of Turkey’s current account," Empirical Economics, Springer, vol. 35(3), pages 543-568, November.
    3. Issiaka Coulibaly & Blaise Gnimassoun, 2013. "Current account sustainability in Sub-Saharan Africa: Does the exchange rate regime matter?," Working Papers hal-04141160, HAL.
    4. Aleksander Aristovnik, 2006. "The Determinants & Excessiveness of Current Account Deficits in Eastern Europe & the Former Soviet Union," William Davidson Institute Working Papers Series wp827, William Davidson Institute at the University of Michigan.
    5. Sebastian Edwards, 2004. "Thirty Years of Current Account Imbalances, Current Account Reversals, and Sudden Stops," IMF Staff Papers, Palgrave Macmillan, vol. 51(s1), pages 1-49, June.
    6. Sebastian Edwards, 2004. "Thirty Years of Current Account Imbalances, Current Account Reversals and Sudden Stops," NBER Working Papers 10276, National Bureau of Economic Research, Inc.
    7. O Okiti, 2003. "A Dynamic General Equilibrium Model with Terms of Trade Shocks: A Small Open Economy Case," Economics Discussion Paper Series 0333, Economics, The University of Manchester.
    8. Hamizun Ismail & Ahmad Baharumshah, 2008. "Malaysia’s current account deficits: an intertemporal optimization perspective," Empirical Economics, Springer, vol. 35(3), pages 569-590, November.
    9. Aleksander Aristovnik & Stanka Setnikar-Cankar, 2006. "How Excessive are External Imbalances in Selected Transition Countries?," Prague Economic Papers, Prague University of Economics and Business, vol. 2006(3), pages 243-267.
    10. Alpaslan AKÇORAOĞLU & Erkan AĞASLAN, 2009. "Current Account Deficits, Sustainability and Global Financial Crisis: Evidence from Turkey, 1987-2008," Ekonomik Yaklasim, Ekonomik Yaklasim Association, vol. 20(72), pages 1-20.
    11. Evan Lau & Ahmad Zubaidi Baharumshah, 2003. "Sustainability of External Imbalances: The Case of Malaysia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 48(01), pages 61-80.
    12. Gnimassoun, Blaise & Coulibaly, Issiaka, 2014. "Current account sustainability in Sub-Saharan Africa: Does the exchange rate regime matter?," Economic Modelling, Elsevier, vol. 40(C), pages 208-226.
    13. Ayla Ogus & Niloufer Sohrabji, 2006. "An Intertemporal Benchmark Model for Turkey’s Current Account," Working Papers 0601, Izmir University of Economics.
    14. Benoît Mercereau, 2003. "The Role of Stock Markets in Current Account Dynamics: Evidence from the United States," IMF Working Papers 2003/108, International Monetary Fund.
    15. Alhaji Jibrilla Aliyu & Shehu Mohammed Tijjani & Caroline Elliott, 2015. "Asymmetric cointegration between exchange rate and trade balance in Nigeria," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1045213-104, December.
    16. Apergis, Nicholas & Tsoumas, Chris, 2009. "A survey of the Feldstein-Horioka puzzle: What has been done and where we stand," Research in Economics, Elsevier, vol. 63(2), pages 64-76, June.
    17. Benoît Mercereau, 2004. "The Role of Stock Markets in Current Account Dynamics: a Time-Series Approach," IMF Working Papers 2004/050, International Monetary Fund.
    18. Rihab Bousnina & Foued Badr Gabsi, 2022. "Current Account Balance and Financial Development in MENA Countries: The Role of Institutions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 109-142, March.
    19. G. K. Sanni & A. U. Musa & Z. Sani, 2019. "Current Account Balance and Economic Growth in Nigeria: An Empirical Investigation," Economic and Financial Review, Central Bank of Nigeria, vol. 57(2), June.

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