Nearly all of Nigeria's foreign exchange assets before the 1970s were held in British pounds sterling. Under the post-World War II IMF modified gold exchange standard, which lasted until 1973, sterling was a key currency in international trade. A country that accumulated sterling, as Nigeria did in the twenty years before 1955, mostly years of restrictions on sterling convertibility, essentially extended credit to Britain. During this period, Nigeria restricted nonsterling imports, strengthening the balance-of-payments positions of the sterling area and Britain's international financial position.
From 1956 to 1965, Nigeria had a persistent merchandise trade deficit, which changed to a surplus in the period between 1966 and 1977 (including the 1967-70 civil war) with petroleum's rapid growth as an export commodity (see table 15, Appendix). In late 1977 and 1978, demand for Nigeria's low-sulfur crude decreased as oil became available from the North Sea, Alaska, and Mexico, and as global oil companies reacted to the less favorable participation terms offered by the Nigerian government. Except for the period from 1979 to 1980, when oil shortages and prices increased, demand for Nigerian crude remained sluggish until 1990. From 1978 through 1983 the trade deficit continued. In early 1984, the Nigerian government closed Nigeri's land borders and international airports for several days, replaced all old naira notes with new currency bills, and introduced tough exchange-control regulations designed to reduce the repatriation of naira smuggled abroad and prevent future convertibility to other currencies.
From 1984 through 1986 and in 1990, Nigeria had surpluses, but not because of export expansion, but because an economic breakdown forced Nigeria to adopt severe import restrictions. Nigeria's structural adjustment under World Bank auspices brought some stability in the domestic and international economy but at the expense of falling real wages and decreased government social spending for much of the late 1980s.
Data as of June 1991