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Monetary conditions, oil revenue and economic growth in Nigeria
No full textThis study investigated the relationship between macroeconomic conditions, oil revenue, and economic growth in Nigeria within the period 1981- 2017. To determine this, annual time series data from the World Development Indicator (WDI) and Central Bank of Nigeria Statistical Bulletin was collected for the dependent variable - Gross Domestic Product (the proxy for economic growth) and the independent variables: Labour force participation of productive working age (POP), Interest rate (INTR), Exchange rate (EXCH), Inflation rate (INF) and Oil revenue growth rate (OILR). Taking all variables in natural logarithm, the Ordinary Least Squares (OLS) method, Augmented Dickey Fuller (ADF) unit-root test and the Auto-Regressive Distributive Lag (ARDL) were employed for the empirical analysis. The result showed that a long-run relationship exist among oil revenue growth rate, exchange rate, interest rate, inflation rate and GDP growth rate
Premium motor spirit (PMS) subsidy removal : its potential impacts for the Nigerian economy
No full textSubsidy payments on premium motor spirit (PMS) in Nigeria have impacted significantly on revenue of the government over the years. The tempo has been on the upward trend over time, resulting in fiscal concerns necessitating immediate government attention. The economy suffered operational challenges, leading to loss of huge revenue. several suggestion on how to address the issue have been provided by various governments over the years, but a permanent solution to the problem are yet to be achieved. thus, this paper reviews the issues and found that, beyond the revenue concern to the government, importing PMS into Nigeria takes about 49.0% of the foreign reserve annually. it suggests initiatives that could reduce the consumption of PMS substantially\, while improving production to reduce imports, and utilization of foreign exchange, as well as removing existing subsidy
Unofficial Dollarisation and Monetary Policy in Nigeria
No full textThis paper examined the impact of dollarisation on monetary policy in Nigeria, using monthly data spanning 2002 to 2016. The paper adopted the conventional IMF proxy for dollarisation and traced its reactions to changing monetary policy stance. Using the vector autoregression (VAR) model and interbank rate as an indicator of monetary policy stance, the results showed that the size of dollarisation could influence the outcome of monetary policy, though the impact was small. This was evident from the output equations, that inflation did not respond in the first month and responded negatively in the second month. However, from the third to sixth month, it responded positively before it eventually returned to equilibrium. The overall impact of dollarisation on exchange rate is dependent on the degree of dollarisation. The conclusion from the results was that monetary policy could still be effective with the present level of dollarisation
FSS 2020: pension sector
No full textThe Nigerian Pensioner over the years is seen to have been deprived of his/her benefits even after retirement. The inconsistency of payments, corruption and lack of data or payments to Ghost Pensioners was a major setback to the defined benefits pension scheme of the Federal Government. To curtail these challenges, the Federal Government commenced the reform of the sector through legislative reforms to create a robust Pension industry that can meet the needs of all pensioners. This Paper intends to review the Journey So for of the FSS2020 Pension Sector. The paper ls divided into five Sections; Section one deals with the introduction, Section two discusses the overview of the Legal Framework for the Pension industry in Nigeria, 2014 as Amended; Section Three Reviewed the FSS2020 Pension Sector and its achievements; Section Four, discussed the challenges of the Sector and interventions, while Section Five deals with summary, conclusion and recommendation
Agricultural Sector Credit and Output Relationship in Nigeria: evidence from nonlinear ARDL1
No full textThis paper investigates the relationship between credit to agriculture and agricultural output in Nigeria by means of nonlinear autoregressive distributed lag (NARDL) model using a time series data from 1992Q1 to 2015Q4. Results show no evidence of asymmetry in the impact of credit to output growth in the agricultural sector (positive and negative changes) in the short-run, but different equilibrium relationships exist in the long-run. The dynamic adjustments show that the cumulative agricultural output growth is mostly attracted by the impact of the positive changes in credit to agriculture with a lag of four quarters of the prediction horizon. This calls for the need for a policy on moratorium on credit administration to agricultural sector
Testing Validity of Observed Indicators of Local Content Policy in Nigeria: Evidence from Four-factor Measurement Model
No full textThis paper tests validity property of the indicators that measured local content policy (LCP) in Nigeria’s oil sector. Survey data were obtained for the test, using confirmatory factor analysis (CFA) method. The results obtained from a four-factor measurement model confirmed the LCP indicators to be valid. This reflects that the policy can achieve its developmental targets on local value creation with particular reference to increased local firms’ participation, backward linkages, and job creation in Nigeria’s oil sector. Hence, government should focus on effective implementation and compliance of the policy rather than “labour clause” as contained in the local content Act. However, government should be aware of the trade-off that the policy may entai
The Consumption-Oriented Capital Asset Pricing Model in the Nigerian Stock Exchange
No full textIn this study, the Consumption-oriented Capital Asset Pricing Model (CCAPM) is tested for Nigeria by considering returns on investments in the Nigerian Stock Exchange market and other financial assets for the period 1993: Q1 to 2016:Q4. Three tests are conducted. The first test examines forecast performance of excess returns for the selected portfolios in predicting future consumption; the second test estimates the consumption betas for the set of assets using two alternative formulations of the CCAPM; and the third test included consumption growth variable in a multifactor risk analysis to compare with the basic CAPM formulations. The empirical results indicates that while stock returns do not predict future consumption decisions well, both Treasury Bill rates and dividend yield performed well in predicting consumption behaviour. For the consumption beta estimates, CCAPM is found to only be relevant for few portfolios in the stock market, with negative betas for the entire market. Betas for Treasury bill rates and dividend yields however suggest that the assets form strong basis for both current and future consumption decisions. The results also show that the consumption growth factor does not have any significant risk premium for the categories of assets
Nigeria\u27s power sector roadmap: policy perspectives and prospects
No full textVarious strategies have been employed over the years by the Government to boost power in the country. These strategies have been hinged on policies, reforms and roadmaps, including the 2005 Electric Power Sector Reform Act, the Roadmap for Power Sector Reform 2010 and the current Roadmap for Change. A perfunctory look at previous reforms has resulted in significant progress, including unbundling and privatizing the long-standing government-owned monopoly in the power sector. This paper takes a comprehensive assessment of the Roadmap of Change comparing it to previous policies, isolating policy perspectives, prospects and challenges facing it. It also gleans lessons from selected country experiences. The paper concludes by outlining standpoints the current roadmap needs to take into consideration to achieve the goals of incremental power, steady power and uninterrupted power
Testing for the Stability and Persistence of the Phillips Curve for Nigeria
No full textIn this study, we describe the problem of testing for the stability and persistence of the Phillips curve for Nigeria when there are nonstationarities in the marginal distribution of the regressors. We test for unknown break dates using the , and approaches. After reviewing the relevant asymptotic distribution theory we replicate Hansen’s fixed-regressor bootstraping scheme, which shows that Andrews’ tabulated critical values for the test statistics are oversized, and are not robust to the presence of nonstationarities in the marginal distribution of the regressors. In search of alternative bootstraping schemes, we experiment with the sieve, wild, and Rademacher schemes to ascertain if there are any possible improvements over the fixed-regressor scheme. Finally, we apply the methodology to test the stability and persistence of the Phillips curve in Nigeria using quarterly data on inflation and the output gap from 1960 to 2009. We find that, unlike Andrews asymptotic p-values, inference based on Hansen’s hetero-corrected bootstrap technique supports the hypothesis of a structural break in the inflation dynamics in Nigeria. One key policy implication is that, within a certain range of the output gap, the central bank could use the policy rate to stimulate demand up to a certain limit with no consequential positive impact on inflation
Determinants of FDI and FPI Volatility: An E-GARCH Approach
No full textThis study examined the determinants of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) volatility in Nigeria. The study used annual data covering the periods 1986 to 2016 and the EGARCH approach was employed. The study observed that trade openness and world GDP were the significant determinants of FDI volatility, while domestic interest rate and stock market capitalization were significant determinants of FPI volatility in Nigeria. Other variables were insignificant in influencing volatility in FDI and FPI. Consequently, the study recommends the need for the prudent management of these determinants (with particular reference to indigenous variables) to ensure reduced volatilities in these capital flows which are essential for the growth of the domestic economy, particularly at this time when the Nigerian economy is in great need of foreign investment owing to the continuous variation in international crude oil price