Nigeria Confronts Post-Crisis Global Economic Realities

Abstract

Nigeria has long been trying to learn how best to manage boom-bust cycles in global commodity prices, adopting an oil-price benchmark for annual budgets while saving revenues above the benchmark in an excess crude account in the half decade before the 2008/2009 global crisis. The crisis and its aftermath now dictate that the country needs additional lessons on how best to manage surge-shortage cycles in global liquidity. Managing frequent external trade shocks is now only a part of the story, managing frequent external financial shocks, particularly with the intricate interactions between the two, is the other part.

Keywords: Nigeria, Boom-Bust Cycles, Global Commodity Prices, Oil Price, Surge-Shortage Cycles, Global Liquidity, Capital Flows, Current Account Shocks, Capital Account Shocks

JEL Classification: F01, F32