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FSS 2020 financial markets programme: progress so far
No full textThe Financial System Strategy (FSS) 2020 is a national reform program aimed at developing and transforming Nigeria\u27s financial sector into a growth catalyst to fast track the achievement of the Vision 20:2020 and engineer Nigeria\u27s evolution into on International Financial Centre. The strategic objectives of FSS2020 are to strengthen and deepen the domestic financial markets, enhance the integration of domestic financial markets with the external financial markets and supporting the reals sector. To attain these objectives, the key regulators of the Nigerian financial system come together under the leadership of the Central Bank of Nigeria and crafted the vision to make Nigeria the safest and most diversified growing economy among emerging markets
Counterfeiting the naira notes: issues, trends and measurements.
No full textCurrency counterfeiting is o worldwide phenomenon of great importance to currency management and monetary policy execution. This has resulted in transatlantic corporation and synergy in combating the malaise in addition to the efforts of the monetary authorities towards ensuring that banknotes are not susceptible to counterfeiting. Notwithstanding the zero currency counterfeit stance of the Central Bank of Nigeria, the menace remain unabated. The paper through the lens of available literature, identified issues and trends that undermine the effort of the Central Bank of Nigeria geared towards ensuring that banknotes are not susceptible to counterfeiting and also developed methodological framework for the exact measurement of counterfeited currency. Available data on currency counterfeit in Nigeria is envisaged with some dearth and hence the paper relied on dialectical methodology in juxtaposition with theoretical exposition to further give a detailed analysis. Finally, recommendations were provided to the Central Bank of Nigeria, policy makers, low enforcement agencies and government to serve as a framework for reducing or possibly eradicating currency counterfeiting activities in Nigeria
On the Properties of the Weibull-Burr III Distribution and its Application to Uncensored and Censored Survival Data
No full textTwelve different families of cumulative distributions that are used to model real life data were introduced by Burr (1942). Burr III distribution is among these families of cumulative distributions. In this work, a four-parameter distribution is introduced to model real life scenarios called Weibull-Burr III distribution. The limiting behavior of the proposed distribution, hazard function, moments, skewness, kurtosis and quantile function is investigated; order statistics and entropy are also derived. The method of Maximum Likelihood Estimation technique was used in estimating the parameters of the proposed distribution. To prove the flexibility and performance of the distribution and Weibull-G family of distributions, censored and uncensored data sets are applied. The results suggest that the new compound distribution fit the real data and perform much better than its competitors for both censored and uncensored data
Exchange Rate Misalignment under Different Exchange Rate Regimes in Nigeria
No full textThis study examines the dynamics of naira real exchange rate (RER) during the period 2000Q1 – 2016Q1 as well as the extent to which it deviated from its long run equilibrium path. To achieve this, we adopt the Behavioural Equilibrium Exchange Rate (BEER) model approach and incorporate the effects of an endogenously determined breakpoint in the cointegrating vector of the RER model. We found empirical support for the existence of a long-run relationship between RER and its determinants that is subject to a structural break in 2011Q1. Also, model results showed that exchange rate policy, productivity and interest rate differentials are significant determinants of real exchange rate movements. In terms of the levels of RER misalignment under different exchange rate policies considered, model results indicated that the naira was overvalued by 1.22 per cent during IFEM regime of 2000 – 2002; overvalued by 0.35 per cent during rDAS (2002 – 2006); undervalued by 0.39 per cent during wDAS (2006 - 2013) and undervalued by 0.25 per cent in the period succeeding the wDAS till March, 2016. Overall, the naira was found to be overvalued by 0.15 per cent during the sample period, implying a subsidy of 0.15 kobo per dollar
An Assessment of the Impact of Banking Reforms on Economic Growth and Bank Performance in Nigeria
No full textThis study assesses the impact of banking reforms on banks’ performance and economic growth for the period 1981 to 2015 by fitting an ANOVA model into Stepwise Regression. Using dummy variables to isolate reform periods, results show that banking reforms contribute positively to economic growth, especially in the period 1999 to 2004. Also, banking reforms are found to contribute negatively to banks’ performance, following the 1993 reforms. The study confirms that banking system reforms in Nigeria have dual impact on the economy and banks’ performance. The banking reforms are capable of promoting growth in the economy. Thus, the study recommends pre-crisis reforms testing by the apex bank
Cost of Governance and Fiscal Deficit in Nigeria: Evidence from State Government Data
No full textFiscal deficit has remained a predominant occurrence at both the Federal and state government levels, and this has become a source of concern for economic managers. At the individual state level, a quarter of the state governments consistently ran deficit for more than six consecutive years, from the period 2007 to 2014. More importantly, the combined overall fiscal balance of the state governments has resulted frequently in deficit in the past two decades. Fiscal deficit is not bad in itself, but most of the state governments are running fiscal deficit to sustain recurrent expenses, rather than infrastructure development. Available studies on the determinants of fiscal deficit have not considered cost of governance as an important determinant. Thus, the authors investigated the effect of cost of governance and other determinants, on fiscal deficit across the Nigerian states for the period 2008-2015. Using the dynamic panel of the Arellano-Bond (Difference) GMM Estimators in the Keynesian framework, the results revealed that cost of governance had fueled fiscal deficit at the state level in Nigeria. It also showed that inflation, population size and economic growth had significant impact on fiscal deficit across the Nigerian states. The authors underscored the need for strengthening public financial management reforms, particularly, the Fiscal Responsibility Act, the Medium Term Expenditure Framework, and the treasury single account, at the sub-national level to ensure fiscal discipline. This will enable the state governments to be more prudent and ensure that fiscal deficit is geared towards infrastructure development
Let\u27s listen to Sarma: developing an index of financial inclusion for Nigeria.
No full textThe National Financial inclusion Strategy of the Central Bank of Nigeria was designed to reduce the percentage of adult Nigerians excluded from financial services from 46.3 per cent as at 2070 to 20.0 per cent by 2020. As a component of the policy tool kit, the strategy makes provision for annual data gathering to measure progress in financial inclusion drive of the Bank. This approach and others recognised by the CBN are mostly survey based, hence occasional and expensive. ln order to facilitate cross-country comparison, this study adopted Sarma (2008, 2012) to compute a composite index for financial inclusion for Nigeria from 2007Q7 to 2016Q2. The results indicate that financial inclusion effort of the CBN is yielding the desired result, particularly in term of penetration dimension. ln other words, there is increase in coverage with limited access to the services rendered by these institutions that could be of immense benefit to the customers. The study therefore, recommends that, CBN should not concentrates effort on reducing the percentage of adult Nigerians excluded from financial services alone, but also ensure that the customers benefit from financial services so as to enhance their participation in the developmental process. An inclusive financial system requires more thon the size of the banked population, it includes the availability of banks\u27 services (such as credit facilities) and relative ease with which the services can be accessed
Deficit financing, price and economic stability in Nigeria: a bound testing approach.
No full textThis research work empirically examines the impact of deficits finance on price and economic stability in Nigeria using Autoregressive Distributed Lag (ARDL)/Bound testing approach from 1980-2016. Total deficit financed externally and a disaggregated domestic source which includes CBN, Deposit Money Banks and Non-Bank Public were used as proxies for deficit financing while inflation rates and GDP were captured for price and economic stability respectively. The bound testing analysis which was carried out in a two differently specified models show no cointegration between deficit finance and inflation, while that of deficit finance and economic stability nexus reveals the existence of a strong cointegration. Consequently, the ARDL outcome indicates that deficits financed by CBN and Non-Bank Public have positive and significant impact on economic stability while those financed through the Deposit money Banks and foreign sources hove no impact on National output. Thus, we conclude that to achieve sustainable non-inflationary growth in this era of expansionary fiscal policy, government should finance its deficits domestically through the CBN and Non-bank public
CBN real sector financing for inclusive growth and economic development.
No full textThe fall in crude oil in the international market has expose Nigeria\u27s vulnerability to external shocks and overdependence on a mono-product economy thereby presenting the opportunity for Nigeria to diversify its economy away from oil into agriculture, manufacturing services and other non-oil sectors. This paper examines the need to support key sectors that are drivers of growth and to also upscale its developmental finance initiatives targeted at economic growth, deepening of deepening of credit delivery to the real sector. The paper highlighted focal areas and the interventions by CBN in these areas to include Agricultural sector; Infrastructure; Manufacturing sector; MSMEs and Entrepreneurship Development. This is followed by a discussion of the broad policy deliverables of are interventions CBN development finance intervention deliverables which includes: improvement of access to finance; catalysing the diversification of the economy; stimulate the creation of jobs; and supporting inclusive growth. A tabular summary of CBN development finance interventions
Exchange rate management in period of economic uncertainty
No full textThe paper examines current developments in the management of foreign exchange by the Central Bank of Nigeria in the period of economic uncertainty. It explains how the Bank has implemented different regimes of foreign exchange in order to maintain the external value of its currency as well as ensure them