Abstract: | One of the major concerns of Nigeria, Gambia, Ghana, and Sierra Leone during the operation of the West African Currency Board was the alleged relationship between the money supply and the balance of payments. Critics argued that changes in foreign exchange reserves tended to exert a preponderant influence on the monetary base, the main determinant of the money stock, which, in turn, is a good indicator of the thrust of monetary forces. After explanation of some specific terms, an attempt is made through an analysis of tables to discover the extent to which the monetary authorities have influenced the 'base' since the establishment of the Central Bank of Nigeria. Tables: Sources, and uses of the monetary base, 1960-70, Percentage contribution of the different components of the cash base, 1960-70. Diagram: Quarterly changes; in the Nigerian cash base and foreign exchange reserves, 1960-70. |