Balance of Payments: Nigerian Experience: 1960-2012

The paper examined balance of payments: Nigerian Experience: 1960-2012 using time series data from 1960-2012. The study explored secondary data from the Central Bank Statistical Bulletin for the period of 1960 to 2012 and used various econometric analyses and/or statistical analytical (E-view 7.2) method to examine the relationship between balance of payments and economic growth. The paper tested the stationary—through Group unit root test. The co-integration technique employed in this study is [19] approach in assessing the co-integrating properties of variables, especially in a multivariate context to determine the long-run relationship among the variables examined. Further effort was made to check the causality relationship that exists between the two variables by employing the Pairwise-Granger causality at one lag period. From the result of empirical findings, it was discovered that in Table 3 there was unidirectional from RGDP to BOP, EXCH, EDR, and from EDR to FTD and bidirectional causality only between EDR to EXCH. The paper however recommended that among others the government should encourage the exportation of non-oil goods into world market, that the revenue from the oil is diversified into other viable aspect of the economy, that policies (such as monetary or fiscal) are put in place to check balance-of-payment deficits, inflation rate should be maintained at single-digit level to enable the private investors to have a conducive atmosphere for production of goods for export, and also reduce the external borrowing tendencies, even when borrowed should be utilized on mega or capital projects that have multiplier effect in the economy.