The Size and Sustainability of Nigerian Current Account Deficits

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.