JOURNAL OF ECONOMICS AND ALLIED RESEARCH
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OIL PRICE AND EXCHANGE RATE NEXUS IN NIGERIA: EVIDENCE FROM WAVELET ANALYSIS
Get PDFCrude oil is the source of essential petroleum products for productive economic activities. Primarily, Nigeria exports crude oil and imports petroleum products, and this has a link with the unfavourable exchange rate of the Nigerian currency vis-à-vis the US dollar over the years. Based on the proposition that there is no significant relationship between oil price and exchange, the paper examines the oil price-exchange rate nexus in Nigeria, with monthly data from 1980M1 to 2020M12 analysed within the framework of wavelet analysis. The results show evidence of a mixed relationship between oil prices and exchange rates during the period under study. The results also show evidence of the lead-lag effect of oil prices on exchange rates in the long run but not in the short and medium terms. Thus, oil price has a time varying effect on the exchange rate only in the long run. Furthermore, there is evidence of unidirectional causality from oil price to exchange rate in the short and medium run but bidirectional causality in the long run. Hence, oil price is a key determinant of exchange rate in the short and medium terms but not in the long term. Consequently, this study emphasizes the need for purposeful economic diversification in order to attain and sustain a stable exchange rate in Nigeria
IMPACT OF INFRASTRUCTURE ON FOREIGN DIRECT INVESTMENT INFLOW TO NIGERIA
Get PDFThe study investigated the impact of infrastructure on Foreign Direct Investment inflow to Nigeria for the period of 1995-to 2021. the study made use of Descriptive Statistics, Unit Root Test, Pairwise Correlation, and Multiple Regression were used in finding the result on the Effect independent variable on the dependent variable the result revealed that Exchange Rate has a p-value of 0.035, which is statistically significant at a 5% level of significance, this implies that the exchange rate has a substantial impact on the amount of foreign direct investment flowing into Nigeria. The p-value for Electricity Consumption is 0.176, which is statistically insignificant at the 5% level of significance, this suggests that Electricity Consumption has a negligible effect on Nigeria's Foreign Direct Investment inflow. Market Size has a p-value of 0.024, which is statistically significant at a 5% level of significance, this indicates that Market Size has a substantial impact on the inflow of foreign direct investment into Nigeria. The study recommended that Nigerian government may have a significant impact on multinational firms' investment decisions in the country by enacting policies that would strengthen the trade market, availability of power supply, to establish within the nations a more welcoming investment environment to attract foreign direct investment inflow
IMPACTS OF FUNDAMENTAL MACROECONOMIC SHOCKS AND ANTI – SHOCK POLICIES IN NIGERIA: A DSGE ANALYSIS
Get PDFThis paper extensively used the framework of the dynamic stochastic general equilibrium model (DSGEM) to examine fundamental macroeconomic variables and key policy response variables in Nigeria. The model is used to evaluate the effects of fundamental macroeconomic shocks – general price level, the interest rate, the real exchange rate, and inflation and to test the effectiveness of different policies, using the impulse responses of the variables to one standard deviation and the variance decomposition analysis, in explaining the variations in the main macroeconomic variables. Against this background, this paper analyzes whether the Nigerian economy has any possibility at all to apply anti-shock policies in order to reduce or eliminate the short and long run effects of the stated fundamental macroeconomic shocks. The results show considerable empirical evidence that the foreign interest rate shock leads to much more persistent responses in both domestic and foreign variables. The foreign supply and inflation shocks increase domestic output gap, inflation and interest rates. Higher interest rate and real exchange rate appreciation reduce aggregate demand as well as a fall in output gap and inflation. The policy responses of domestic variables to external shocks have been captured by the method analyses. However domestic policy distortions increase economic effects
THE EFFECT OF FINANCIAL CRISIS ON PROFITABILITY OF NIGERIAN BANKS
Get PDFThis paper empirically examined the distinct effect of the financial crisis on profitability in the Nigerian banking industry between 2008 and 2019 using firm-level data of 14 out of 18 Nigerian commercial banks listed on the Nigerian stock exchange. Using the system generalized method of moments (SGMM), the results showed that financial crisis harms bank profitability in Nigeria. Following these findings, it was recommended that the Central Bank of Nigeria should formulate policies such as bail-out, extension of loan repayment, reduction of mandatory Central Bank deposit rate and engaging in open market policy to improve bank profitability and discourage banks in taking risky projects that could increase fragility in the banking industry. These policies will enable banks to reduce financial stress during crisis and mitigate the probability of engaging in highly risky projects which may further increase nonperforming loans and fragility in the banking industry
TAX REVENUE AND WELFARE OF NIGERIANS
Get PDFTax system is one of the major sources of government earnings and spending, but non-commitment of eligible tax payers to pay the due taxes, place huge burden on government's responsibility to the citizens. This study investigated the effects of changes in fiscal policy (taxes) on government and citizens welfare in Nigeria from 1986-2020. The period covered is considered significant, because of its time lag and several tax policies and reforms introduced by the government, and its subsequent implementation. This study used an ex-post-facto research design using annual secondary data from accredited sources majorly from Federal Inland Revenue Service (FIRS), and Central Bank of Nigeria (CBN) annual statistical bulletin for the period. Autoregressive Distributed Lag (ARDL), Granger causality test, and Wald bounds test were used to analyze the data. Results revealed a linear long run association among the variables. Thresholds relationship were examined – revealing linear-linear relationship both at the upper and lower regime, this indicates no thresholds relationships. The study concluded that as total tax revenue has a positive insignificant impact on consumption at 11.8%. Therefore, it is recommended amongst others that, to build and maintain the culture of household consumption, there is need for a review and restructure of the nation's tax policy and administrative system by promoting compliance culture developed through taxpayer educatio
PETROLEUM PRODUCTS PRICE CHANGES, EXCHANGE RATE AND PRICES OF FOOD ITEMS IN NIGERIA
Get PDFThe study investigated the link between petroleum products price changes, exchange rate and price of food items in Nigeria using monthly data from January 2010 to December 2021. The study used the Augmented Dickey Fuller (ADF) unit root test procedure in testing the stationarity of the variables and adopted the Autoregressive Distributed Lag Model (ARDL) models in analyzing the data. The ARDL estimated result found evidence that price of PMS and exchange rate has a significant positive impact on prices of food items in Nigeria in the short run and long run periods. The study therefore, recommended that government planned subsidy removal on PMS should be a gradual process instead of a onetime total removal to prevent further hikes in the prices of food items and other commodities in the country. In addition, the local refining of crude oil should be revisited and revamped to boost production and over importations of refined petroleum products for domestic use which will also check exchange rate deprecation. 
PATTERN AND TREND ANALYSIS OF RETAINED EARNINGS AMONG LISTED MANUFACTURING FIRMS IN NIGERIA
Get PDFThe study analysed the trend and pattern of retained earnings among listed manufacturing firms in Nigeria from 2008 -2018. The study adopted descriptive research design and used secondary data.
The population of the study comprised of 78 listed manufacturing firms on the Nigeria Stock Exchange as at the end of 2018. Purposive sampling technique was used to select firms with upto- date published financial data and whose stock were traded on the stock market totaling 56. The data was analysed using table, percentages and graph. The result showed marginal changes in retained earnings and a non-linear trend as retained earnings curve decreased by 1.8% between 2008 and 2011, levelled off between year 2013 and 2014, increased by 2.3% between 2015 and 2017 and then moved in opposite direction by 0.6% from 2017 to 2018. A policy implication with respect to this result is that Nigeria’s manufacturing sector lacked adequate reserve to withstand any adverse unforeseen circumstances that may arise within the economy
INVESTMENT IN ROAD TRANSPORT INFRASTRUCTURE AND ECONOMIC GROWTH IN NIGERIA: A VECTOR ERROR CORRECTION MODEL APPROACH
Get PDFThe study examined the investment in road transport and economic growth in Nigeria and used secondary data by employing an ex-post facto research design, using time series data for 1980-2015 on public infrastructure expenditure, exchange rate, and inflation rate measured by the consumer price index. The data were sourced from the Central Bank of Nigeria (CBN) statistical bulletin (2017), National Bureau of Statistics (NBS) and World Development Indicators (2017). Co-integration econometric techniques were applied in the analysis of the long-run equilibrium relationship or co-integration test confirmed the existence of a long-run relationship with Max-Eigen values of two co-integrating equations (Me = 40.98, P<0.05); while the trace statistic values showed three co-integrating equations (ts = 27.13, P<0.05). The value of -0.21 of the coefficient error correction term suggested that road transport infrastructure investment and economic growth would converge towards its long-run equilibrium at a moderate speed after the fluctuation. The results further revealed that a unit per cent change in road transport investment would positively change economic growth by 0.22 per cent at a 5% significance level
MODELLING THE EFFECT OF THE CENTRAL BANK BALANCE SHEET POLICY ON DISAGGREGATED INFLATION IN NIGERIA: A NON-LINEAR ARDL APPROACH
Get PDFSince the onset of the global financial crisis, the central banks have deployed a wide array of unconventional monetary policy measures (including balance sheet policy) to support financial stability, provide further monetary policy accommodation or limit potential adverse effects from international capital flows. Several studies have been conducted on the subject matter but less attention has been given to the effect of the unconventional balance sheet policy on disaggregated inflation. The current study specifically investigates the effects of the unconventional CBN balance sheet policy on disaggregated inflation (changes in prices of Food & Non-Alcoholic Beverages; Housing Water, Electricity, Gas & Other Fuel; Clothing & Footwear; Transportation and Furnishing & Household Equipment Maintenance) in Nigeria for the period 1999 to 2020. Employing the recently developed Non-linear Autoregressive Distributed Lag (NARDL) model, the study showed some far reaching results as against the use of aggregate inflation. Specifically, the results showed that the central bank balance sheet expansion policy has long run positive and significant effect on food and non-alcoholic beverages inflation, housing, water, electricity, gas and other fuel inflation and transport inflation. This would inform policy decision as to which sector of the economy to invest the intervention funds of the Central Bank of Nigeria to enhance price stability, support economic growth and generate employment in the economy
TECHNICAL AND ECONOMIC EFFICIENCY OF CHEMICAL AND PHARMACEUTICAL INDUSTRY IN NIGERIA
Get PDFIn this study, the technical efficiency of the Chemical and Pharmaceutical manufacturing firms in Nigeria was estimated by using a stochastic frontier production function, incorporating the technical inefficiency effect model. The translog frontier model was found to be an adequate representation of the data, given the specification of the corresponding Cobb Douglas production function. The technical inefficiency effects were found present and contained a significant random element. Results from the translog regression showed a sigma square (σ2) of 1.975 which was statistically significant at 1 percent. The technical efficiency scores in the Chemical and Pharmaceuticals sector ranged from 0.012 to 0.82 with a mean of 0.488. The individual impacts of some of the variables in the inefficiency effect model were significant, also the combined influence of all the five variables was significant in reducing the inefficiency of the Chemical and Pharmaceutical manufacturing firms in Nigeria. The results also indicated that the industries were operating at increasing returns to scale. Amongst others, utilisation of enhanced inputs and improved technology by manufacturing firms was recommended, to enable the firms to attain the optimal production frontier