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Financial Inclusion and Poverty Reduction in Nigeria: The Role of Microfinance Institutions
No full textThis study investigates the role of microfinance institutions as a vehicle for driving financial inclusion and alleviating poverty in Nigeria using the EFinA 2018 household survey data. The probit model, propensity score matching, and average treatment effect methods are applied for the analyses. The study finds that financial inclusion driven by access to, and usage of products/services provided by microfinance institutions reduces poverty. The study recommends among others the need for increased access to microfinance products/services and an integrated poverty reduction policies that identifies microfinance institutions as a critical enable
Big Data Analytics, Al and Machine Learning For Central Banks: What it Portends For Emerging Economies in Africa
No full textIn order to evaluate the status of the economy, policymakers and the private sector have relied on Statistics produced by official statistical institutes for decades. These data must be gathered with great effort, and publishing frequently takes months or years to complete. However, both the amount of data that is readily available and the tools and software used to analyse it have grown dramatically over the past few years. These changes have increased interest in big data and machine learning among central banks. The application of big data and machine learning in central banking is examined in this study. The bulk of central banks hold formal discussions about big data within their organisations. In many fields, such as research, monetary policy, and financial Stability, big data and machine learning applications are used. Furthermore, central banks report leveraging big data for regulation and monitoring (suptech and regtech applications). The legal uncertainty around data privacy and confidentiality is a major concern for central banks, as are issues with data quality, sampling, and representativeness. Several institutions report difficulties in building the necessary IT infrastructure and human capacity. Collaboration between government entities could improve central banks\u27 capacity to gather, store, and analyse massive data
Impact of Fiscal and Monetary Policies on the Performance of the Nigerian Stock Market
No full textThis paper examines the impact of the interaction between fiscal and monetary policy on Nigeria\u27s stock market performance for the period 2011:M11 — 2019:M12. Bounds test results indicate a run relationship among the variables. Further results indicate that Nigeria\u27s all-share index increases with government expenditure in the short- and long-run, but increases with the interest rate in the short run only. Government revenue hurts AS in the short run, suggesting that the revenue-generating activities of government cause a crowding-out effect in the market. The study therefore recommends the synchronisation of both policies in any model intended for formulating stock market policy because the interactions of both policies affect the behaviour of the stock market in Nigeria
Digital Economy, Institutional Quality and Economic Growth in Selected Countries
No full textThis study examines the role of digital economy and institutional quality on economic growth of Bangladesh, Ethiopia, Kenya, and Nigeria. The study adopts the feasible generalized least square method with annual panel data from 1985 to 2017. Results show that digital economy, human capital and knowledge worker, and democratic accountability promote economic growth, while corruption, socioeconomic conditions, and bureaucratic quality retard economic growth. Furthermore, interaction of digital economy with corruption promotes growth. However, the interaction of digital economy with institutional quality retards economic growth, which could be due to the deteriorating institutional quality and low level of economic digitalization in these countries. The study concludes that digital economy and institutional quality could play positive roles in the quest to becoming emerging markets. The study suggests more involvement of the countries in digital economy and improved institutional quality
Fiscal Policy and Macroeconomic Stability in Nigeria: how effective are fiscal rules?
No full textThe paper examines the impact of fiscal rules on macroeconomic stability in Nigeria. Using data spanning 2005Q1-2021Q4, the study adopts the Autoregressive Distributed Lag (ARDL) approach and constructs output volatility to account for the role of gross fixed capital formation (GFCF), tax revenue, government size, and trade openness in assessing macroeconomic stability. The findings reveal that, Nigeria has deviated from the established rule limits since 2017. The study also finds that increase in government size and GFCF are instrumental to attaining macroeconomic stability during economic crisis. On the other hand, increasing trade openness and taxation are inimical to the macroeconomic stability of import-dependent economies with low levels of production. Hence, the study recommends that government should establish an independent fiscal council with the mandate to monitor and ensure adherence to established rule limits and review the existing rule-based framework to remove ambiguities and be anchored on robust institutional mechanisms that are in line with best practices
Nigeria’s Budding Digital Economy: coping with disruptive technology
No full textFor a thriving and inclusive digital economy, African countries such as Nigeria need to build the critical foundations of the digital economy (World Bank Group, 2019). These foundations are interdependent and require public and private sector solutions
Digitalisation and Financial System Stability: what role for macroprudential policies?
No full textThe recent spate of financial digitalisation has been revolutionary, leading to significant changes in the structure of the financial system, its operational paradigm, users’ perception and experiences, and the regulatory landscape. These developments have been driven by explosive growth of technological advancements in fintech such as big data analytics, distributed ledger technology, and artificial intelligence, among others. Digitalisation of the financial system not only offers numerous benefits but also poses significant risks to the financial system, its stakeholders, and financial stability. This paper documents these issues and, in addition provides conceptual clarifications on financial digitalisation, and highlights relevant macroprudential policy regulations aimed at managing the phenomenon and minimising risks to financial stability. The paper equally provides policy recommendations targeted at enhancing surveillance and supervision that will optimise the process to the benefit of all stakeholders
Social Dimension of Inclusive Growth in ECOWAS: Implication for Poverty Reduction
No full textThis study investigates the implication of the social dimension of inclusive growth on poverty reduction in Economic Community of West African States (ECOWAS) countries. It specifically examines how social indices of inclusive growth comprising of income inequality, education, and health outcomes affect poverty reduction. The study uses a panel dataset of the six (6) lower-middle income countries in ECOWAS which was analysed via panel Difference Generalised Method of Moment (D-GMM). The results show that GDP per capita exerts significant negative effect on poverty while inequality, education and health outcomes do not show significant effect on poverty. Although, the estimates of inequality, health and education outcomes are insignificant, poverty reduces with inequality but increases with education and health outcomes. The study submits that ECOWAS member countries have not benefited from social inclusive growth strategy in terms of eradicating poverty. Consequently, there is need for urgent and serious effort to promote social inclusion via improved health and education outcomes in addition to reduction in inequality. This will require an overhaul reform in the health and education sectors through improved funding, introduction of curriculum tailored at meeting the changing labour market needs and a wage policy that reflects the minimum international standard to improve the overall contribution of health and education to poverty reduction
Savings-investment gap in Sub-Saharan Africa: Does the interaction of financial sector development and migrant remittances matter?
No full textThis study analyses the interactive effects of migrant remittances and financial development on savings-investment gap for a panel of 18 Sub-Saharan Africa (SSA) countries from 1990-2017. Results from a panel ARDL model show that migrant remittances reduce savings-investment gap in the long run. The gap is further reduced when the individual effect of financial development, and the interactive effects of migrant remittances and financial development are taken into consideration. Further analysis reveals evidence of widening effects of rising real GDP growth and bank deposits over a long-term horizon, while higher private sector credit widened the savings-investment gap only in the short-run. The study suggests the need for a policy to reduce migrant remittance transfer costs and encourage beneficiaries to prioritize investment over consumption
The Tokenisation of Assets: jurisdictional experiences and the lessons for Nigeria’s financial system
No full textThe tokenisation of assets is not the future - it is the present. It is deeply transformative and is offering exciting possibilities for, in particular, financial markets. The tokenisation of assets offers promising possibilities for how capital is raised. Novel fundraising vehicles, such as Security Token Offerings (STOs), provide a higher degree of regulation and transparency for investors. Further, STOs are an efficient method to raise capital from a broader investment pool than it has been possible with traditional fundraising methods. It is, however, still in infancy stage and market adoption will still need time. Despite an exponentially increasing interest in tokenised assets, “traditional” financial institutions and national authorities still approach asset tokenisation with caution. However, countries like Switzerland, well-known for its innovation friendly stance, will help to drive and foster the remarkable potential of tokenised assets