Overview

The Central Bank of Nigeria (CBN) held a press briefing on macroeconomic developments in 2002 and an assessment of the Small and Medium Industries Equity Investment Scheme (SMIEIS). The briefing highlighted that a relatively stable macroeconomic environment was maintained in fiscal 2002 compared to 2001. The inflation rate decelerated from 18.9% in December 2001 to 13.6% in October 2002, due to tight monetary policy and good agricultural harvests, though single-digit inflation was not achieved due to expansionary fiscal operations and structural factors. Real GDP grew by 3.2%, below the 4% target and 3.9% in 2001, mainly due to contraction in the oil sector. Fiscal operations improved, with federal government cumulative retained revenue of N665.7 billion (23.6% below budget) and total expenditure of N713.1 billion (20.5% below budget), leading to a deficit of N47.5 billion financed by banking system borrowing. Monetary aggregates grew excessively: broad money (M2) rose 33.2% (target 15.3%) and narrow money (M1) rose 28.2% (target 12.4%), driven by increased credit to government and monetisation of oil export proceeds. The assessment of SMIEIS noted it was launched in 2000 as a positive change agent for Nigeria's economic transformation.

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