MODELING OF BALANCE OF PAYMENT AND EXCHANGE RATE IN NIGERIA

This paper discusses the Balance of Payment (BOP) and Exchange rates in Nigeria so as to account for the two-way cause-and-effect relationship between balance of payment and exchange rate in Nigeria. The relevance of this lies in the fact that it could help to monitor the Balance of Payments and Exchange rates and act as an early warning signal for economic crisis.Monthly data on Nigeria exchange rate, interest rate, inflation and balance of payment for the period January 2004 to December, 2020 were obtained from the 2022 CBN Statistical Bulletin. The data were analyzed using indirect least squares estimation method of the simultaneous equation model. Results of the analyses show that (i) the data satisfied the exogenueity and simultaneity assumptions of the specified model (ii) relationships exist between exchange rate and BOP. As shown in the result there is balance of payment deficit due the negative impact of exchange rate on it. To forestall this problem, we recommended that there should be a reduction in government spending; higher interest rates and higher taxes as these could all have the effect of dampening consumer demand reducing the demand for imports.

本文探讨尼日利亚的国际收支（Balance of Payment，BOP）与汇率问题，旨在厘清尼日利亚国际收支与汇率之间的双向因果关系。此项研究的意义在于，其可为国际收支与汇率的监测提供支持，并充当经济危机的早期预警信号。

2004年1月至2020年12月期间尼日利亚汇率、利率、通货膨胀及国际收支的月度数据，均取自2022年《CBN统计公报》。研究采用联立方程模型的间接最小二乘法（indirect least squares estimation method）对数据进行分析。

分析结果表明：（i）数据满足所设定模型的外生性（exogeneity）与联立性假设；（ii）汇率与BOP之间存在关联。结果显示，由于汇率对国际收支产生负面影响，尼日利亚存在国际收支赤字。

为防范此问题，研究建议削减政府支出、提高利率及增加税收——这些措施均有助于抑制消费需求，从而降低进口需求。