JOURNAL OF ECONOMICS AND ALLIED RESEARCH
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REVISITING THE ACCURACY OF RICARDIAN THEORY OF COMPARATIVE ADVANTAGE IN AFRICA IN THE 21ST CENTURY: AN EMPIRICAL VERIFICATION
Get PDFThis paper empirically examined the accuracy of Ricardian theory of comparative advantage in Africa in the twenty-first (21st) century using system GMM. The study used 52 African countries for the analysis covering 2001 to 2018. The study found that the Ricardian theory is theoretically plausible but lacks strong empirical evidence in Africa. The study finding implies that international trade is beneficial but African countries have not significantly benefitted from the trade. Based on the finding, the study recommends that the African countries should re-strategise their economies towards improving their export commodities relatively higher than the value of their imports commodities that could even stand competitive at the global market. This could create a basis for comparative cost advantage thereby increasing foreign earnings that could contribute positively to economic growth and in turn create domestic jobs for the region. The African countries should also ease of the complex and cumbersome border procedural requirements and other forms of institutional trade costs found in African economies
A MACRO-ECONOMETRIC ANALYSIS OF TRADE OPENNESS, FOREIGN DIRECT INVESTMENT AND THE PERFORMANCE OF THE NIGERIAN ECONOMY
Get PDFThis study investigates the tripartite relationship between trade openness, foreign direct investment and the performance of the Nigerian economy within a framework of macro econometric model. The theoretical underpinning for this study is the factor proportion model of international trade, Flying Geese FDI model and the Keynesian Mundell-Fleming IS-LM framework. The study used secondary data spanning from 1970 to 2018 for within sample forecast and a five-year out-of-sample forecast, spanning from 2019 to 2023 was performed under four policy scenarios in line with the Economic Recovery and Growth Plan (ERGP). The findings reveal that trade openness attracts foreign direct investment and they affect macroeconomic performance in Nigeria through direct and indirect channels. The simulation results established that increase trade openness, FDI, government expenditure and broad money supply would bring about increase in the endogenous variables such as private investment, real consumption, outputs of oil and non-oil, significant increase in non-oil exports, and government revenues among others. The study recommends that in line with ERGP, government should build a globally competitive economy and improves on the business environment; there should be diversification from oil to non-oil and from narrow gauge primary exports to finished products; CBN should ensure macroeconomic stability as a strategy for trade openness and attraction of FDI
ASSESSING THE LONG-RUN IMPACT OF INSTITUTIONS ON ECONOMIC GROWTH: THE NIGERIAN EXPERIENCE
Get PDFThis paper investigates the long run impact of institutions (proxied by rule of law, property rights and political terror) on Nigeria’s economic growth from 1981 to 2017, using the Dynamic Ordinary Least Squares technique on annual data obtained from secondary sources. A long-run relationship was found between the explanatory variables and economic growth. The empirical evidence is in favour of a statistically significant and positive relationship between property rights and growth. Law and order was found to be statistically significant and positively associated with growth, while political terror exerted a negative impact on growth in the period of investigation. Deepening of institutions through well-developed property rights is recommended, including the enthronement of law and order to provide a mechanism for dealing with political terror, strengthen public trust and confidence and thus promote economic growth
SMEs AS DRIVERS OF ECONOMIC RECOVERY AND SUSTAINABILITY DURING COVID-19 AND BEYOND IN NIGERIA
Get PDFThis study examined SMEs as drivers of economic recovery and sustainability in Nigeria during the COVID-19 pandemic and beyond. The study utilized primary data from a sample size of 387 SME owners across 13 states and FCT Abuja in Nigeria. The survey was carried out using online questionnaires through “Google Forms”. Descriptive statistics and paired t-test were used for data analysis. The findings showed that COVID-19 pandemic has drastically affected the level of employment and returns of SMEs in Nigeria negatively. Considering SMEs as critical engines of economic growth due to their potentials in creating jobs, boosting economic output, generating income, and reducing poverty, the study recommends that the Nigerian government should engage with the SMEs early, seek to better understand their challenges and how they might best mitigate the challenges that COVID-19 has caused. Some of the approaches are the granting of soft loans with a temporary moratorium of the loan or assisting the SMEs with grants, granting of SMEs payroll support programme, granting of relief programmes such as loan holiday packages for SMEs as measures mitigating against the effects caused by the COVID19 global pandemic. The study also recommends deliberate efforts towards improving innovativeness and managerial capabilities in SMEs that is focused on less finance and more innovation-based routes while creating support institutions to provide information on regulations, standards, taxation, customs duties, and marketing issues
COMPETITION IN NIGERIAN FLOUR INDUSTRY: WHY THE B2C STAKE IS RISING
Get PDFThe increasing competition in Nigerian flour industry has changed the nature of relationship between flour mills and their customers. Flour mills’ customers comprise those who buy for resale as a business (B2B) and those who purchase for direct consumption (B2C). Traditionally, the B2B constitute the majority in the market. However, with the increase in competition, there has been a surge in favour of the B2C. This study examined the reasons for the growing attention of the flourmills to the B2C as against the B2B. The study observed brand loyalty, surging consumer market and increased delivery capacity as the key motivations for the new customers’ preference. Using customers’ data from Ondo state on 5 flour mills to portray the argument, the study observed that the future flour market will be less volatile and the industry growth will correlate with progresses in the bakery market. 
JUDICIAL SOVEREIGNTY, A SINE-QUA-NON TO DEMOCRACRATIC GOVERNANCE: A NIGERIAN PERSPECTIVE
Get PDFA vibrant Judiciary is an essential ingredient of democracy given its role as the third arm of the government. In an advanced democracy, the judiciary enjoys sovereignty in the discharge of its duties. This is in tandem with the principle of separation of power, checks and balances. Unfortunately, the situation in evolving democracies like Nigeria seems to contravene the tenets of separation of power. This study examined the extent of judicial sovereignty in and its impacts on democratic governance in Nigeria. The Methodology of the paper is both qualitative and descriptive. Relevant data from secondary sources were generated and analysed via contextual-analytic approach. The findings of the paper show that Nigeria Judiciary is not independent from the other arms of government in the discharge of its duties. The scramble between these two big wigs in the country now makes the court seen by the Nigerian public as a toothless bull dog because, the expected is no longer seen from them, rather, they dance to the tune of the drum players which always metamorphose to electoral manipulation and fraud and thus, have negative impact on advancement of democracy in Nigeria. The paper argued that, for democracy to consolidate in Nigeria, the Judiciary must be independent and corrupt free. Thus, the paper recommends some measures to ensure judicial sovereignty and palpable ways to advance democracy. 
IMPACT OF BANKING SECTOR INTERMEDIATION ON THE NIGERIAN ECONOMY
Get PDFThis paper assesses the role of the banking sector in the channeling of funds to private enterprises for productive investment by examining relationships between the mobilization and allocation functions of the banking sector and economic growth in Nigeria using a regression model. The study employed gross domestic product as proxy for economic growth, while total private sector deposit (TPSD) and credit to the private sector (CPS) were proxies for banking sector intermediation. The results revealed that there was a positive and significant impact of mobilized funds on economic growth and a negative and significant impact of allocated funds on economic growth. This indicates that the real sector did not benefit by way of accessing credit from the banking sector, although the banking sector showed the capacity to channel funds in form of credit to the private sector during the period under study. This is an indication that the Nigerian banking sector is still underdeveloped. In line with these findings, policy makers should come up with initiatives to motivate the deposit money banks to make funds available to the private sector by making it easier for entrepreneurs to access credit
PATTERNS AND DETERMINANTS OF DEMAND FOR ALTERNATIVE ELECTRICITY IN NIGERIA
Get PDFDue to epileptic electricity supply in Nigeria, the household sector spends a more significant share of its income on alternative sources which could have been used to improve their welfare. Despite this effect, not much has been exploited. This study, therefore, analyzed the pattern and determinants of alternative electricity sources based on secondary data from NBS on General Household Survey 2018-19. The statistical methods used were descriptive and OLS. The results revealed that 79% of the household heads were male, with an average age of 52 years and a household size of 6, most have secondary education earning a low income of N35,192. The most used alternative energy is generator 85.4%, rechargeable lantern 8%, candles 6% and solar energy 0.4%. Also, 50.5% of the generators and the solar panels were bought between 2015-2019. The commonly used generator was tiger generator whose purchase price starts from N15,000 with an average capacity 950watt. The demand for generator was affected positivity by income, family size, age and educational level at 1% levels respectively. For the rechargeable lantern, income was significant at 1% but negative while positive and significant for family size (1%), age (1%) and educational level (10%). Demand for candle on the other hand, was negatively related to income (10%), educational level (5%), family size (5%) while age was insignificant likewise sex for all the three sources. The conclusions were; the use of generator has been increasing over the years while few households have started titling towards solar energy. The study recommends that government should improve electricity supply
TRADE LIBERALIZATION, EXPORT DEPENDENCE AND DIVERSIFICATION OF EXPORTS IN NIGERIA
Get PDFNigerian economy over the past few decades has adopted more liberal trade regimes and increased its dependence on trade in primary products without any significant progress in terms of diversifying their export base. Studies have shown that exports concentration on products, sectors, and markets with a limited scope to improve productivity and product quality may result in low growth. Absence of diversification increases vulnerability to external shocks which can impact negatively on exports earnings. This paper examines the impact of trade liberalization and export dependence on export diversification in Nigeria from 1980 to 2018. We employed short-run ECM technique to account for possible short-run disequilibrium in the relationship. We found, among other things, that trade liberalization has negative but insignificant impact on Export Diversification, Export Dependence has positive but insignificant impact on EXD in Nigeria. Foreign direct investment, gross national expenditure and financial development exact positive and significant impacts on export diversification in Nigeria. Specifically, it found that a 1% point increase in FDI would increase EXD by approximately 30%, while a 1% increase in gross national expenditure would, in the short-run, significantly increase exchange rate diversification by 18%, other factors remaining constant. On this basis, the paper recommends that for exports of products to be diversified in Nigeria, the free trade zone policy needs to be strengthened by the government to help open up more operational areas such as the Calabar and Lagos free trade zones
THE WAVE OF COVID-19 PANDEMIC AND NIGERIA’S OVERDEPENDENCE ON OIL: THE CHALLENGES AND POSSIBLE SOLUTION
Get PDFSince the discovery of oil in commercial quantities during the 1950s, and the oil boom in the 70s, oil has been the mainstay of the Nigerian economy. It accounts for about 90% of exports and over 80% of total government revenues. There is no doubt that the present global disruption due to covid-19 pandemic has posed a threat to the economy. This study examined Nigeria’s overdependence on oil revenue. The objective is to explore the challenges of covid-19 on Nigeria’s overdependence on oil revenue and proffer possible solutions. The study undertook an exploratory research using secondary data and relevant literature. The paper suggested some possible solutions that, the short-term focus for Nigeria will be on freeing up fiscal space in transparent and accountable ways, avoiding a downward debt spiral, and ensuring that the recovery is based on a cleaner, more diversified in agriculture, solid minerals and renewable energy for sustainable future growth and development