CBN Digital Commons (Central Bank of Nigeria)
Not a member yet
1580 research outputs found
Sort by
The relevance of garch-family models in forecasting Nigerian oil price volatility
No full textThis study aims at investigating the relevancy of GARCH - family models in measuring the Nigeria bonny light crude oil price volatility. The study also compares the forecasting power of different GARCH models with the aim of identifying the best forecasting model. The study uses the best GARCH family model to predict the future bonny light oil prices. The paper is structured into five sections. First section is introduction and second section is the literature review. The third section highlight the methodology while section four analyses the result and gives discussions of findings. Conclusion and recommendations are in the last section
Central Bank public communication campaign and monetary policy
No full textThis paper examines the relevance of public communication campaign in a central bank\u27s quest to adequately convey monetary policy decisions to its stakeholders. The meaning, design and evaluation of public communication campaign are discussed to highlight campaign usefulness in monetary policy communication. Its limitations are also noted with regards to the discussion of technical or complex issues in monetary policy
Enhancing institutional lending to the agricultural sector by derisking the value chain: the case of Nigerian Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL)
No full textThere is no gainsaying that agriculture is one of the most important sectors in the Nigerian economy as it employs at least 60% of Nigerians and contributes up to 23.11% of the country\u27s GDP. The performance of the agricultural sector has not been encouraging over the years, resulting in the importation of over N 1.0 trillion in wheat, rice, sugar and fish. Policy responses towards channeling financial resources to the agricultural sector in Nigeria have a long history through government and CBN sponsored programmes. Among CBN intervention schemes is the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL). It is a $500 million public liability company wholly owned by the CBN aimed at providing farmers with affordable financial products, while reducing the risk of loans under financing programmes offered by banks. The NIRSAL financing mechanism has five solution components namely: Risk Sharing Facility (RSF), Insurance Component (IC), Technical Assistance Facility (TAF), Bank Incentive Mechanisms (BIM) and Agricultural Bank Rating System (ABRS). NIRSAL absorbs a large chunk (up to 75%) of the risk, to enable banks and other lenders to finance agriculture more sustainably. Since incorporation in 2015, NIRSAL has provided Credit Guarantees for over 454 agricultural projects valued at N61.161billion: paid out over N753.36 million as interest rebate to borrowers; and guaranteed up to 40% (207) of the Federal Ministry of Agriculture\u27s Growth Enhancement Scheme (GES) projects valued at N39.49 billion. In addition, NIRSAL has trained 112,000 farmers and primary producers in four (4) value chains namely: Rice, Cocoa, Cotton and Tomato among others. To make NIRSAL a better success story that will further unlock billions of Naira to the agricultural sector, the Management of the institution must ensure the buy-in and active participation of DMBs, development finance institutions, farmers groups/associations, development partners, NAIC and other commercial insurance firms, government at all levels and other stakeholders that have been identified to have a role to play with the scheme. In addition, there is need for strengthening of NIRSAL by diversifying its areas of coverage and allowing independent investors to own shares thereby making it more efficient in providing credit risk guarantees to agricultural projects
Geopolitical tensions, crude oil price and output dynamics: implications for fiscal governance in Nigeria
No full textThis paper examined the linkages between geopolitical tensions, crude oil prices and oil output dynamics vis-a-vis the implication for fiscal governance in Nigeria. within a strategic game theoretical framework, anchored on moral hazard assumptions (incentive problem) and applying VAR model, findings indicate that geopolitical tensions affects Nigeria\u27s bonny light crude oil price and export. Results also revealed that the timing and impact of geopolitical tensions last fairly long thus, could affect fiscal revenue and economic governance in Nigeria. Therefore, the paper recommends a complete diversification of the economy from oil will strengthen the nation\u27s fiscal space and development planning
Macroeconomic Implications of Trade Diversification in Nigeria
No full textThis study seeks to examine the effects of trade diversification on macroeconomic performance in Nigeria. To achieve this, the study employs bound test of ARDL to determine the existence of cointegration between trade diversification and key macroeconomic variables. We further estimate the short-run and long-run effects of Intensive and Extensive trade diversification on Economic growth and exchange rate movements. The results from bound tests confirm co-integration between trade diversification and economic growth on one hand and trade diversification and exchange rate movements on the other hand. Similarly, the results from our estimations show that trade diversification can propel economic growth in the country. Also, the trade diversification can reduce movements in exchange rate especially extensive diversification thus preventing it from substantial movement that can derail this important variable from its long run equilibrium. The study recommends that policy makers should pursue vigorously both intensive and extensive trade diversification to propel economic growth and guarantee stable exchange rate for the Nigerian currency
Policy Trilemma and Interest Rate Behaviour in Nigeria
No full textPolicy makers face trade-off in dealing with exchange rate management, monetary independence and concerns about capital mobility simultaneously. This study empirically examines the effects of Nigeria’s trilemma policy path on interest rate using data spanning from 1997:Q1 to 2017:Q3. It equally incorporates the role of external reserves in buffering these effects. Stationarity of the series were ascertained with Zivot-Andrew (ZA) structural break unit roots test technique, while the bounds test cointegration approach was used to confirm the cointegrating properties of the variables. We found that capital mobility has significant effect on interest rate in the long run baseline model and could also be successfully buffered with external reserves to reduce interest rate. Additionally, our results show that although exchange rate stability and monetary independence do not independently affect interest rate, but their interaction with external reserves does. This implies that external reserve serves as an effective buffer if appropriately employed by the monetary authorities. The trilemma policy can be used to optimally reduce interest rate. Also, external reserves could serve as a tool for economic stabilization with appropriate combination with other relevant policy variables
Exploring startup funding for small business sector growth, job creation and reduction of youth unemployment in Nigeria
No full textUnemployment generates welfare loss from lowered output, income, and wellbeing which impedes social progress in a nation. Youth unemployment is a major problem currently confronting Nigeria (Nwogwugwu & Irechukwu, 2015). However, in developing economies jobs are created through small businesses. Nevertheless, unemployed youths with small business ideas experience financial constraints and lack access to startup capital. The intent of this study was to explore the experiences of some owners who succeeded with small business initiatives despite challenges from lack of access to formal and informal sources of capital. Semi-structured interviews with 15 successful small business owners located in Lagos who started as unemployed youths, yielded data for the study. Participants were purposefully selected while data was analyzed thematically and the results showed that : (a) inability to provide collaterals, (b) reliance on insufficient private funds and short term overdrafts, and (c) bureaucracy, were the critical challenges facing small business owners. The results may become a basis for future interventions and support programs by governments and leaders of youth organization
Addressing infrastructure gap via public-private partnership in Nigeria
No full textThis paper is arranged in nine Sections. It commenced by examining the issue of the nature of infrastructure and the implication for financing. It also looked at the catalytic role of infrastructure on economic growth and development, including the debilitating implication of its negligence by policy makers. next, the paper attempted at establishing the nexus between infrastructure and economic growth and development
Dealing with risks and uncertainties in Agriculture: implications for Central Bank of Nigeria interventions
No full textThe paper discusses key areas in dealing with risks in agriculture which involves much more than dealing with risky events after they occur but through a coordinated risk management processes like establishing the context, risk identification, risk analysis and other quantitative analytical tools. The key institutional risk sharing systems like credit guarantee and insurance schemes were presented with their merits and demerits
Non-performing Loan and its Effects on Banking Stability: evidence from National and International Licensed Banks in Niger
No full textThis study examines Non-Performing Loan (NPL) and its effects on the stability of Nigerian banks with national and international operational licenses from 2014:Q2 to 2017:Q2. A “restricted” dynamic GMM is employed to estimate the macroeconomic and bank specific drivers of NPL for each licensed category. Z-Score is constructed to proxy banking stability, and its response to shocks NPLs is examined in a panel vector autoregressive framework. The results reveal that drivers of NPLs vary across the two categories of banks, but, weighted average lending rate is a vital macroeconomic driver of NPLs for both. The results also confirm the moral hazard hypothesis and riskreturn tradeoff of efficient market theory. Furthermore, international banks withstand NPLs shocks in the long run, despite temporary flux in the short horizon, while the stability of national banks is susceptible to NPLs shocks in the long run. The study recommends that weighted average lending rate, anchored on monetary policy rate should be the focus of banks’ regulators when addressing issues of NPLs. Again, strategies for mitigating short run impacts of NPLs on the stability of international licensed banks should be incorporated in the off-site regulatory framework to ensure banking stability