CBN Half Year Economic Report for 2007
3.3.3
Crude Oil
The declining trend in crude oil production observed in 2006 continued in the review period. Crude oil
production, including condensates, which averaged 2.14 million barrels per day (mbd) or 387.34 million barrels
(mb) during the period declined by 4.9 per cent relative to the first half of 2006. The decline in production was
due to youth restiveness in the Niger Delta Area of the country, which led to the shutdown of some oil production
facilities by the affected oil companies.
Aggregate export of crude oil averaged 1.69 mbd or 305.89 million barrels, compared with 1.8mbd or
325.8 mb in both the preceding half-year and the corresponding period of 2006. A total of 81.45 million barrels
of crude oil was supplied to the Nigerian National Petroleum Corporation (NNPC) for local refining, out of
which 1.75 million barrels or 2.15 per cent was processed, while 79.7 million barrels or 97.9 per cent was
exported.

Fig. 35
Crude Oil Producion and Exports (First Half 2007)

0.5

1.5

2.5
First Half 2006
Dec-06
First Half 2007
Million barrels per day
Output
Exports
Domestic Consumption
3.3.3.1 Crude Oil Prices

The average spot price of Nigeria's reference crude, the Bonny Light (37 API) decreased by
1.4 per cent relative to its level in the first half of 2006 to $65.56 per barrel. The average price of the UK
Brent, West Texas Intermediate and the Forcados, also dropped by 3.5, 8.4 and 0.8 per cent to $63.04,
$61.18 and $65.32 a barrel, respectively, compared with the corresponding half of 2006. The average
price of OPEC's basket of eleven crude streams fell from $61.44 per barrel in the first half of 2006 to
$59.4. The decrease in the price of crude oil was attributed to over supply occasioned by quota bursting
by some OPEC members.

CBN Half Year Economic Report for 2007
3.3.4
Gas

At 32.19 million cubic meters (MMm ), the estimated aggregate output of natural gas rose by 6.6 per
cent over the level in the corresponding half of 2006. The increase was attributed to the expansion in the

production of non-associated gas. Of the total quantity produced, gas flared was 10.4 MMm , compared with

9.4 and 8.32 MMm in the corresponding and preceding halves of 2006, respectively. The volume utilized rose

by 2.4 per cent to 21.29 MMm , compared with 20.8 MMm in the first half of 2006. Of the total quantity

utilized, 3.19 MMm , 4.55 MMm , and 9.94 MMm , were re-injected, sold to NLNG and industries,

respectively. The oil producing companies used 1.05 MMm as fuel gas while gas lift was 0.69 MMm .
Source: Reuters

CBN Half Year Economic Report for 2007
3.3.5
Consumption of Petroleum Products
The major and independent petroleum products marketing companies distributed a total of 5.86
million litres of different white (petroleum) products to various parts of the country during the review period.
Petrol (PMS), household kerosene (HHK), diesel (AGO) and ''others'' accounted for 75.4, 6.2, 12.9 and 5.5 per
cent of the total volume distributed, respectively.
3.3.6
Solid Minerals
3.3.7 Electricity Generation
3.3.7.1 Electricity Consumption
Available data from the Ministry of Solid Minerals Development showed that the total output
of solid minerals declined by 79.8 per cent below the level in the corresponding period of 2006 to 3.5 million
tons. The decline was attributable to the fall in the production of sand (99.7%), iron ore (99.3%), clay (95.2%),
and marble aggregate (88.4%), among others.
At 2,808.4 mega-watts per hour (Mw/h), total electricity generation in the country fell by 2.5 per cent
below the 2880.4 Mw/h attained during the first half of 2006. The decrease in electric power generation was
attributed largely to the activities of vandals in the Niger Delta region, which disrupted gas supplies to the
thermal stations in the country. Consequently, efforts at improving power supply to the economy, through the
operationalization of the newly completed and existing plants suffered a set back.
At 1635.03 Mw/h, total electricity consumption declined by 2.8 and 5.4 per cent from the levels in the preceding
half year and the corresponding period of 2006. Of the total, residential consumption accounted for
51.3 per cent, commercial and street lighting accounted for 26.7 per cent while industrial consumption
accounted for 22.0 per cent. The decrease in electricity consumption was attributed to the forced power outages
and load shedding as well as power losses due to aging transmission and distribution facilities.

CBN Half Year Economic Report for 2007
3.3.8
Industrial Financing
3.3.8.1 Nigeria Export Import Bank (NEXIM)
Total disbursement by the Nigeria Export Import Bank (NEXIM) to various beneficiaries was
N3,490.77 million, representing an increase of 40.1 per cent over the sum disbursed in the corresponding period
of 2006. Of the total amount, the sum of N2,856.07 million was disbursed under the Direct Lending Facility for
export of various products in the manufacturing, oil & gas, solid minerals and services sub-sectors, while the
sum of N634.7million was disbursed under the Short-term Guarantee Facility.
A sectoral breakdown of the disbursement showed that the manufacturing sub-sector received the
highest amount of N1,791.7 million or 51.3 per cent of the total. The oil and gas sub-sector followed with 22.9
percent, while services and agriculture received 13.3 and 12.5 per cent of total disbursement, respectively.
3.3.9
Telecommunications
The growth observed in the telecommunications sector in 2006 was sustained. Available data from the
Nigerian Communications Commission (NCC) indicated that the total number of connected telephone lines
grew by 13.9 per cent, from 34.0 million lines at end -December 2006 to 38.7 million lines at end -May 2007.
The teledensity consequently rose from 24.3 per 100 inhabitants in December 2006 to 27.8 per inhabitants in
May 2007. As in the past five years, the growth in the sector was attributed to developments in the mobile
telephone sub-sector where the number of lines increased by 14.5 per cent, from 32.3 million lines at end-
December 2006 to 37.0 million lines at end- May 2007. Also, the number of fixed telephone lines increased by
3.1 per cent to 1.7 million lines at end- May 2007.

CBN Half Year Economic Report for 2007
3.3.10 Consumer Prices
The moderation in consumer prices which began in the third quarter of 2006 was sustained, although
prices inched upward towards the end of the half year. The all-item composite consumer price index (CPI) stood
at 164.3 (May 2003 = 100) in June 2007, compared with 144.9 in the corresponding period of 2006. The yearon-year inflation rate fluctuated downwards, and fell to 6.4 per cent compared with 8.5 per cent at endDecember 2006 and 6.4 per cent in June 2007. When compared with end-June 2006, the rate declined by 2.1
percentage points. The 12-month moving average rate of inflation also declined from 15.5 per cent in June 2006
to 5.9 per cent in June 2007. The development was attributed to the following components: food; food & nonalcoholic beverages; housing, water, electricity, gas & other fuel; furnishing, household equipment &
household maintenance; transport; communication; recreation & culture; education; restaurant & hotels and
miscellaneous goods & services, all of which moderated during the review period.
Data from a nation wide survey conducted by the CBN in 2007 also revealed a general downward trend
in the prices of food items, relative to their levels in the corresponding period of 2006. The decline in
inflationary pressure was largely attributed to the stabilization in the supply of petroleum products, large stock
of agricultural products from the 2006/2007 harvest, as well as the maintenance of fiscal discipline and nonaccommodating monetary policy during the period.

CBN Half Year Economic Report for 2007

3.3.11 Industrial Relations
Industrial harmony in the first half of 2007 was hampered by nationwide strikes embarked upon by
the Academic Staff Union of Universities (ASUU), the Nigerian Labour Congress (NLC) and the Trade Union
Congress (TUC). ASSU's industrial action which lasted for about three months, was aimed at pressurising the
Federal Government over the unpaid monetization arrears, unfulfilled agreement signed in 2001 and the nonimplementation of the 15 per cent salary increase. The NLC and the TUC embarked on a nation-wide strike
which lasted for four days over the 100 per cent increase in the Value Added Tax (VAT), 15.0 per cent increase
in prices of petroleum products, the non-implementation of the 15.0 per cent salary increment for federal civil
servants and the sale of the 55.0 per cent Federal Government interest in both the Kaduna and Port-Harcourt
refineries.

CBN Half Year Economic Report for 2007

1st Half 2006
End-Dec 2006
1st Half 2007
$36,479.0
$42,298.1
$42,626.2

Fig. 43
External Reserves Stock (US$' million)
3.3.12 Real Sector Outlook for the Second Half of 2007
The GDP growth rate is projected to improve in the second half of 2007 relative to the first half. The
optimism is anchored on expected moderation of the Niger Delta crisis, improved power supply, favourable
weather conditions and improved infrastructure. The agricultural sector is projected to grow by at least 7.4 per
cent in the second half of 2007. The expected continued favourable weather, government support and incentives
as well as farmers' willingness to respond to such incentives will favour improved agricultural productivity. The
industrial sector is expected to surpass its performance in the first half of 2007. Furthermore, the manufacturing
sector is projected to grow by 5.5 per cent as the power supply situation gradually improves and other
infrastructure problems addressed. In addition, crude oil production is likely to grow by 2.5 per cent in the
second half of 2007 as the current moves by the government to stem the violence in the Niger Delta yields
positive results.
Overall, the GDP is projected to grow by 7.0 per cent in the second half of 2007, largely driven by the
non-oil sector which is expected to grow by 9.2 per cent complimented by the projected oil sector growth of 3.0
per cent.
The performance of the external sector improved significantly in the first half of 2007. The impressive
outcome was driven by the developments in the current account (CA) occasioned by huge diaspora funds from
home remittances, and increased financial flows. The current account surplus increased from N2,003.3 billion in
the first half of 2006 to N2,015.9 billion or 28.1 per cent of estimated gross domestic product (GDP). The deficit
in the capital and financial account persistently widened from N962.9 billion in the first half of 2006 to N1,896.0
or 26.5 per cent of GDP. The deficit in the financial account reflects mainly the net claims on the rest of the world
especially, short-term credit (private) in respect of oil exports. In general, financial flows increased as shown in
the foreign direct and portfolio investment accounts. In the foreign exchange market under the Wholesale Dutch
Auction System (WDAS), the effective exchange rate of the naira to the US dollar appreciated by 0.8 per cent to
N127.94 per US dollar in the first half of 2007, while the effective central exchange rate used for the balance of
payments computation was N127.1 per US dollar during the period. This could be attributed to the further
liberalization of the foreign exchange market as well as the improved international confidence built by the robust
external reserves. The stock of external reserves increased by 0.8 per cent to US$42.6 billion and could finance
19.0 and 20.2 months of current foreign exchange disbursement and import commitments, respectively as
against 19.4 and 23.0 months in the first half of 2006.
3.4.
External Sector Development

CBN Half Year Economic Report for 2007
3.4.1
Balance of Payments
3.4.1.1 Current Account
The current account surplus which stood at N2,003.3 billion in the first half of 2006, increased slightly
by 0.6 per cent to N2,015.9 billion, in the first half of 2007. This development was traced to the huge inward
transfers. However, surplus in the goods account declined from N1,704.1 billion in the corresponding period of
2006 to N1,214.5 billion. The deficit in the services account narrowed significantly from N86.8 billion in the
first half of 2006 to N33.4 billion. Similarly the income account improved substantially from a deficit of N251.9
billion in the first half of 2006 to a lower deficit of N101.1 billion in the first half of 2007. The surplus in current
transfers increased by 46.7 per cent to N935.8 billion, as a result of the overwhelming personal home
remittances.


1st Half 2006
2nd Half of 2006
1st Half of 2007
Fig. 44
Exports, Imports and Trade Balance (=N='Million)
Export
Import
Trade Balance
-1,213.98
-1,227.34
-1,608.06
3.4.1.1.1 Goods Account
Transactions on goods (trade) account decreased by 28.7 per cent to N1,214.5 billion reflecting mainly
the decline in oil exports and the surge in import bills. Total exports receipt at N2,918.1 billion in the first half of
2006, decreased by 3.3 per cent to N2,822.6 billion. The oil sector component fell by 4.6 per cent to N2,737.3
billion, while the non-oil component increased to N85.3 billion from N49.9 billion in the corresponding period
of 2006. The shares of the oil and non-oil components were 97.0 and 3.0 per cent, respectively.
Non-oil export proceeds by the top 100 exporters during the first half of 2007 amounted to N70.3 billion
(US$549.33 million), indicating an increase of 47.8 per cent over the level in the corresponding period of 2006.
Export proceeds of the agricultural sub-sector rose from N22.6 billion (US$176.31 million) in the
corresponding period of 2006 to N30.4 billion (US$237.58 million), while that of manufacturing fell from
N37.3 billion (US$291.38 million) in the corresponding period of 2006 to N33.2 billion (US$259.68 million).
The share of the agricultural and manufacturing sub-sectors and “others” accounted for 43.2, 47.3 and 9.5 per
cent, respectively. A breakdown of the proceeds under the agricultural sub-sector showed that cocoa products

CBN Half Year Economic Report for 2007
led the group with export valued at N13.0 billion (US$101.27 million), followed by sesame seeds and cashew
nuts with N5.0 billion (US$38.75 million) and N4.6 billion (US$35.96 million), respectively. Under the
manufacturing sub-sector, leather led the group with export valued at N16.3 billion (US$127.46 million)
followed by “other” manufacturing products and aluminum with the export valued N4.9 billion (US$83.36
million) and N3.0 billion (US$23.22 million), respectively. The share of the top 100 exporters in total non-oil
export proceeds stood at 99.7 per cent compared with 99.6 per cent in the corresponding period of 2006.
Total imports which rose by 32.5 per cent to N1,608.1 billion was accounted for by the increase of 10.6
and 36.1 per cent for both the oil and non-oil components, respectively. The rise in the total imports was
traceable to the increased demand for imported raw materials for real sector production.
The deficit in the services account narrowed to N33.4 billion, from N86.8 billion in the first half of
2006. This reflected a significant improvement in all the components of the account as payments in respect of
transport services, professional and technical services, as well as operational leasing services declined
substantially.
The deficit in the income account decreased by 59.9 per cent to N101.1 billion. This was due largely to
low interest payments on loans which declined substantially by 54.7 per cent from the level in the first half of
2006 following the exit from the Paris Club debt. The proactive external reserve management by the CBN
resulted in a substantial increase in interest on external reserves by 36.6 per cent or N119.7 billion.
3.4.1.1.2 Services
3.4.1.1.3 Income

CBN Half Year Economic Report for 2007
3.4.1.1.4 Current Transfers
The surplus in the current transfers account (net) rose by 46.7 per cent to N935.8 billion and was
influenced largely by private sector inflows, particularly personal home remittances (PHR). The inflows
through PHR increased from N637.5 billion in the first half of 2006 to N901.4 billion.
3.4.1.2 Capital and Financial Account
The deficit in the capital and financial account widened to N1,896.0 billion from N962.9 billion in the
first half of 2006. Despite the outcome, foreign capital flows continued to increase due to the sustained
macroeconomic stability in the last two years. Consequently, foreign direct investment increased by 74.7 per
cent from N194.4 billion in the corresponding period of 2006 to N339.6 billion, reflecting greater confidence in
the economy by foreign investors. The 'other' sector account however recorded a deficit of N2,413.1 billion as
against N1,261.1 billion in the first half of 2006, reflecting increased claims on non-residents.

CBN Half Year Economic Report for 2007
3.4.2
External Assets
Provisional data indicated that Nigeria's external assets at end-June, 2007 stood at N6,793.17 billion
(US$53.36 billion), representing an increase of 8.6 and 32.9 per cent over the levels in the preceding period and
corresponding period of 2006, respectively. The development was due entirely to the increase in the net assets of
Deposit Money Banks (DMBs). The CBN's holdings accounted for 85.9 per cent of the total external assets,
compared with 86.9 per cent in the corresponding period of 2006. The net foreign assets of the DMBs, which
stood at N954.21 billion (US$7.5 billion) at end-June 2007, indicated a rise of 43.1 per cent over the level of
N666.92 billion (US$5.2 billion) at end-June 2006.
3.4.3
External Sector Outlook for the Rest of 2007
The external sector of the economy will remain strong for the rest of year 2007. As in the first half, the
main drivers will be the high crude oil price, expected huge remittances especially through the seasonality effect
of the Christmas holidays, and increased financial flows. The current account is projected to close at a surplus
equivalent to 25.2 per cent of GDP while the deficit in the capital and financial account which is estimated at an
equivalent of 23.3 per cent of GDP will widen, owing to the increase in net claims on non-residents in respect of
oil exports. Based on cash flow projections, the stock of external reserves is projected at US$45.0 billion which
is expected to finance about 22.0 months of current imports commitments.
World output expanded modestly in the first half of 2007. Growth in the US economy slowed in the first
quarter but regained momentum in the second quarter. Output in most other countries expanded strongly
especially in the euro area, Japan and emerging market economies, led by China, India and Russia. Sub-Saharan
Africa also experienced growth. In general, world output growth for 2007 is projected at 5.2 per cent in the
IMF's World Economic Outlook (WEO).
Commodity prices fell in the international markets while domestic consumer prices increased in
industrial countries. Sub-Saharan African growth had been attributed to natural resource price increases
although the international terms of trade remain unfavourable to them.
Inflation remained generally contained despite strong global demand. However some emerging market
4.0
Developments in the World Economy

CBN Half Year Economic Report for 2007
and developing economies faced rising inflation, especially in energy and food prices. Oil prices increased due
to limited spare production capacity, while the rise in food prices was attributed to supply shortages and
increased use of biofuels.
The growth prospects for the rest of the year are less threatening but will remain on the downside. The
downward trend is derived from the sharp slowdown in the United States economy especially, if the housing
sector continues to deteriorate. The US growth rate is projected at 2.2 per cent in 2007 down from 3.3 per cent in
2006.
Global trade and capital inflows are expected to constitute a major challenge to the world as they may
slow down but with overall net current account surplus and higher pace of accumulation of reserves. The
volatile commodity prices, an accelerated slowdown in the US economy, the depreciation of the US dollar
against major currencies in the euro area as well as global warming and the non-implementation of the Doha
round trade agreements pose serious challenges to developing countries.
st
The 31 Summit of Heads of State and Government of the Economic Community of West African
States (ECOWAS) was held in Ouagadougou, Burkina Faso on January 19, 2007. The following were the major
highlights of the Summit:
The adoption of reports on the ECOWAS regional integration and cooperation programme,
institutional issues, regional peace and security;
The need for member states of the WAMZ to redouble efforts to achieve the agreed macroeconomic convergence criteria in order to realize the ECOWAS monetary integration
programme;
The need for member states to take necessary measures to implement the Protocol on Free
Movement of Goods and Persons, and the Right of Residence and Establishment;
Agreement to harmonize infrastructure policy and adoption of a regional telecommunications
policy and a regulatory framework covering specific areas;
Review and acknowledgement of progress made in the construction of the West African Gas
pipeline and the establishment of a Power Pool system; and
The transformation of the Executive Secretariat into a Commission. President Blaise
Compaoré of Burkina Faso was elected Chairman.
The West African Monetary Zone held its meetings in Abuja, Nigeria from May 7 -10, 2007. The
meetings were attended by all member countries namely: The Gambia, Ghana, Guinea, Nigeria and Sierra
Leone. Also, Liberia, WAIFEM, WAMA, WABA, BCEAO, IMF, ADB, UEMOA, AU Commission and the
African Business Roundtable attended the meeting. Technical reports were presented on Quoting and Trading
in WAMZ currencies, Cheque Standards and Automated Cheque system, Single Economic Space and
Prosperity Agreement and Payments System Statute.
4.1
World Economy Outlook for the Rest of 2007
4.2
Sub-Regional Institutions

4.2.1
Economic Community of West African States (ECOWAS)
4.2.2
West African Monetary Zone

CBN Half Year Economic Report for 2007
The Committee of Governors noted that member countries were on course for the December 2009
launch of the single currency, and that The Gambia and Nigeria met the four primary convergence criteria in
2006. They stressed the need to deepen institutional and structural reforms to sustain the momentum,
particularly in trade liberalisation and domestication of relevant protocols.
The Convergence Council endorsed the following:
The Fiscal Responsibility Programme as the best practice to ensure fiscal prudence by member
countries.
Enactment of WAMZ statutes into national laws.
The Quoting and Trading of WAMZ currencies without the involvement of central banks.
Adoption of the WAMZ Cheque Standard and the Automated Cheque Processing Standard
(ACP).
The National Sensitisation Committee to develop clear terms of reference to engage WAMZ
stakeholders.
The 42nd Annual (AfDB) Meetings of the Board of Governors of the African Development Bank
Group and the 33rd Annual Meetings of the Board of Governors of the African Development Fund (ADF) were
held from 16 -17 May, 2007 in Shanghai, China. The following were the major highlights of the meetings:
14 new Directors were elected to replace retiring ones.
Reaffirmation that “the headquarters of the Bank shall remain in Abidjan, Cote d'Ivoire” and
extension of the temporary operations in Tunis for 12 months with effect from June 3, 2007.
Launching of three reports: 'The African Economic Outlook 2006', 'African Competitiveness
Report, 2007', and 'Consumption and Price Levels in African Countries'.
Presentation of Bank Group's 2006 accounts which showed that the three windows of the
institution earned income of US$372.5 million, with the ADB window alone accounting for
US$291 million or 78.1 per cent. All the rating agencies reaffirmed triple AAA and AA+ rating
for the Bank's senior and subordinated debt respectively.
Observation that the outlook for Africa remained positive with 31 countries' economies
growing faster than their population. Half of them achieved 5 per cent while nine others were
growing above 7 per cent. Post-conflict countries like Liberia, Central African Republic, DRC
and Burundi, were recovering.
The Bank signed an agreement worth US$497,528 with Sao Tome and Principe, as well as
Burkina Faso for 88,859,888 Yen to support poverty reduction efforts.

4.3
Regional Institutions

4.3.1
African Development Bank (AfDB) Annual Meetings

CBN Half Year Economic Report for 2007
The African Development Bank (AfDB) launched its first Naira (NGN) denominated bond in January
2007, valued at NGN 12,780 million (U.S. $100million) and maturing in one year. The bond with coupon rate
of 9.25 per cent, is the first naira-denominated note issued by a supranational corporation. It is also AfDB's
largest issue denominated in a local currency to date and its first issue was with an African-based lead
managerStandard Bank, Africa's largest bank by equity capital.

The Bureau of the Association of African Central Banks (AACB) held its ordinary meeting on February
23, 2007 in Dakar, Senegal.
The following were the major decisions taken at the meeting:
The African Union (AU) was urged to outline the specific role of the Association in the process
of establishing its pan-African financial institutions. Progress so far made by AACB subregions in realizing the African Monetary Cooperation Programme (AMCP) in 2006 was
noted.
The Executive Secretariat was requested to submit at the next ordinary meeting, terms of
reference for the feasibility of an official yearbook on African Banks and sub-regional and
continental stock exchanges. This was to promote African banking networks as well as
regional and continental stock exchanges as required by Stage II of the AMCP.
The harmonization of concepts, methodologies and statistical frameworks, in respect of agreed
macroeconomic criteria as follows:
Debt/GDP ratio: This ratio should apply in all the AMCP sub-regions as a criterion for
monetary integration.
Inflation rate: Headline inflation rate should be used.
Public finance aggregates: The consolidated transactions of the general government
should be reflected in the public finance statistics before 2009. The compilation
should follow 2001 GFS Manual of the IMF.
Index of the Real Effective Exchange Rates: For the agreed exchange rate mechanism
expected at Stage IV (2013-2015) of the AMCP, members should compile, in addition
to RER, the REER for African national currencies in proportion to the international
currencies the Assembly of Governors would select.
Positive real interest rates: Further study should be conducted by concerned members
on how to maintain positive real interest rates.

th
The 40 Session of the United Nations Economic Commission for Africa (UNECA) Conference of
nd
rd
Ministers of Finance, Planning and Economic Development was held in Addis Ababa, Ethiopia from 2 3
April, 2007. The theme of the Conference was “Accelerating Africa's Growth and Development to meet the
Millennium Development Goals (MDGs); Emerging Challenges and the Way Forward”. The Ministers agreed
on the following action plan:
4.3.2
The Association of African Central Banks (AACB)
4.3.3
The United Nations Economic Commission for Africa (UNECA)

CBN Half Year Economic Report for 2007
Align national development strategies and medium-term expenditure frameworks with the
MDGs and other internationally agreed goals and introduce monitoring mechanisms by end
2008.
Channel additional resources from debt relief, exploitation of natural resources and other
sources towards meeting the goals.
Promote micro finance institutions, harness remittances, and improve the investment and
business environment to attract increased FDI.
Mainstream gender in development programmes. Invest in the provision of water, energy,
education, health and reduce violence against women.
Launch the African Green Revolution by end 2008 to raise agricultural productivity of small
holder farmers. Improve the provision of fertilizer, improved seeds, and rural infrastructure
and promote inter-African trade.
Improve availability, timeliness and quality of data through compliance with international
standards.
Request the UN and international financial institutions to assist African governments in
preparing and implementing MDG-based comprehensive national development strategies and
Quick Impact Initiatives
The World Economic Forum (WEF) Annual Meetings was held in Davos, Switzerland from January 24
28, 2007. The theme of the meeting was 'Shaping the Global Agenda: The Shifting Power Equation'. The
following were the major outcomes of the meeting:
Reaffirmed support for the 'Partnering Against Corruption Initiative' (PACI) by the heads of the
multilateral banks.
Release of the final report by the WE
two-year public-private review of the
international monetary system in cooperation with G20 governments.
Agreement among four global accounting firms to work with the PACI to support the fight
against corruption.
Creation of an alliance of leading companies to bring power to villages in sub-Saharan Africa.
Decision by 30 trade ministers to restart the Doha Round of global trade negotiations at the subministerial level.

4.4
Global Institutions


4.4.1
World Economic Forum Annual Meeting
F on the

CBN Half Year Economic Report for 2007
4.4.2
Spring Meetings of the Inter-governmental Group of Twenty-four (G-24) and the Boards of
Governors of the International Monetary Fund (IMF) and the World Bank Group
4.4.3
The International Monetary and Financial Committee (IMFC)
4.4.4
G7/8 Finance Ministers
The Spring Meetings of the Inter-Governmental Group of Twenty-Four (G-24) on International
Monetary Affairs and Developments, the International Monetary Fund (IMF) and the World Bank (WB) took
th
th
place in Washington D.C. USA from 12 15 April, 2007. The Nigerian delegation to the meetings was led by
the Honourable Minister of Finance, Mrs. Nenadi Usman. The meeting considered Voice and Representation of
Developing Countries, the 1977 Decision on Surveillance, Scaling up of Aid, Clean Energy and Climate
Change, Governance and Anti-Corruption.
The fifteenth meeting of the International Monetary and Financial Committee was held on April 14,
2007. The Committee welcomed the continued strong, broad-based expansion of the global economy and
continued focus on IMF surveillance. It agreed that an orderly unwinding of global imbalances over the medium
term and continued robust growth in low-income countries will accelerate progress towards achieving the
Millennium Development Goals. Also it called on the World Trade Organisation (WTO) members to work with
renewed commitment to urgently achieve the ambitious outcomes expected from the Doha Rounds.
The G7/8 Finance Ministers met on May 19, 2007 to discuss global economic issues in preparation for
the Summit of the G8 Heads of State and Government. The following were the highlights of the meeting:
Global growth remained robust and was more balanced across regions and within countries,
but high and volatile energy prices remained a concern.
All participants had the responsibility to ensure a successful outcome of the Doha
Development Round. They remained committed against protectionism but supported 'Aid for
Trade' to secure the full benefits of trade for developing countries.
Good Financial Governance in Africa would help achieve the Millennium Development
Goals. Debt sustainability framework and a charter for responsible lending were also agreed
upon.
The appreciation of the Financial Stability Forum's (FSF) update of its 2000 Report on Highly
Leveraged Institutions and support of its recommendations. A call that the global hedge fund
industry should review and enhance existing sound practices and benchmarks for hedge fund
managers, especially in the areas of risk management, valuations and disclosure to
counterparties.
A review of renewable, nuclear, and clean coal technologies in order to ensure energy security
and to address climate change.
An expression of commitment to fighting money laundering, terrorism financing and other
illicit financing that threatened the stability and integrity of financial markets. A call on the
Financial Action Task Force (FATF) to examine the risks involved in weapons of mass
destruction proliferation finance.

CBN Half Year Economic Report for 2007
4.4.5
G8 Summit
th
4.5.1
4 Session of the Nigeria/Korean Joint Commission
4.6.1
International Cocoa Organisation (ICCO)
rd
The 33 G8 Summit took place in Heiligendamm, Germany from June 6 -8, 2007. It was attended by
several world leaders including Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United
States, European Union, Brazil, India, Mexico, China, South African and Nigeria. The following were the major
outcomes of the Summit:
In a non-binding communiqué, it was announced that the G8 nations would 'aim to at least
halve global carbon-dioxide (CO ) emissions which causes global warming by 2050. The G8

also announced their desire to use the proceeds from the auction of emission rights and other
financial tools to support climate protection projects in developing countries.
Chancellor Angela Merkel of Germany announced the establishment of the “Heiligendamm
Process” through which the full institutionalization of the permanent dialogue between the G8
countries and the 5 greatest emerging economies would be implemented.
G8 leaders promised to honour their commitments to Africa by providing a total of US$60
billion to combat HIV/AIDS, malaria and tuberculosis, while African governments agreed to
fulfil their commitments to democracy and good governance.
th
The 4 Session of the Nigeria/Korea Joint Commission was held in Seoul, Republic of Korea from
January 23 25, 2007. Nigeria exchanged the requirements for the establishment of banks with their Korean
counterparts at the meeting. Also, the government of Nigeria agreed to grant productive oil blocs to the Korean
National Oil Corporation on the condition that a Korean consortium would finance power generation projects
and modernise the Nigerian Rail System. A Memorandum of Understanding was signed between the two
countries. Also, a Korean company, POSCO E&C agreed to construct two thermal power stations in Nigeria to
be located in Abuja and Kaduna, respectively.
th
The Consultative Board meeting on the World Cocoa Economy was held on Monday, 4 June, 2007,
th
th
while the Executive Committee Meeting of the International Cocoa Organisation (ICCO) took place from 5 7
June, 2007 in London. The following were the highlights of the meetings.
The Draft Administrative Budget of GBP2,037,230 for the year 2007/2008 was considered and
accepted. Outstanding contributions of members to the Organization's 2006/2007
Administrative Budgets amounted to GBP126,687 out of an expected amount of
GBP1,836,314.
The International Cocoa Agreement, 2001 was to expire on 30th September, 2008. The
Agreement foresaw two extensions of two years each, possibly extending the current
Agreement until the end of September 2012. It was decided that the Executive Committee
should set up a sub-committee by September, 2007 of all qualified members to review the
International Cocoa Agreement.

4.5
BILATERAL RELATIONS
4.6
International Commodity Organizations

CBN Half Year Economic Report for 2007
The appointment of a new Executive Director was deferred to a later date while the issue of
relocation was also deferred to the Consultative Meeting in London in September 2007.
The distribution of votes and a statement of voting rights among members of the Executive
Committee were done in accordance with the provision of Article 17 of the International Cocoa
Agreement, 2001. Nigeria's eighty eight (88) voting rights were however suspended because
Nigeria breached Article 26 of the ICCO Agreement 2001, on financial contribution to the
ICCO Administrative budget, having defaulted to pay for the year 2006/2007 within the
stipulated period.
Although global economic growth may moderate in the second half of 2007, the domestic economy is
expected to improve on the growth recorded in the first half as a result of re-focussed attention on the
development of infrastructure especially electricity and the rehabilitation of refineries which will boost
domestic petroleum output. Nigeria's successful completion of the PSI programme and the intension to agree on
new surveillance framework built around the seven point agenda of the President and the Vision 2020 will
further endear Nigeria to the international community. The country's rating will continue to improve following
strong macroeconomic fundamentals and the sustained fight against corruption and leakages from the economy.

4.7
Outlook for the Rest of the Year