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Regional and multilateral institutional arrangements in Africa: rethinking the imperatives of economic diversification and trade development in Nigeria.
No full textThis paper critically assesses the implications of the multilateral trading system along the increasing but asymmetric interface between multilateral and regional institution on African economies with particular evidence for Nigeria. The issues relating to market access, export diversification and supply response to incentives derived from the various agreements provided basis for this reasoned analysis vis-à-vis the implications for growth and trade development imperatives. lt is revealed that the multilateral trading system has not benefited the SSA particularly Nigeria, relative to other regions like Asia. Perhaps. internal and external constraints associated with poor economic fundamentals, asymmetries between the rules of the game and the development aspirations of the nations and lock of capacity to negotiate undermines the effectiveness of trade policy in the continent while lack of diversification, low manufacturing capacity and productivity affect growth and exports performance in the region. To top fully on the potentials expected from the pro-neoclassical policy however, we propose that new framework that offers African nations a stronger voice to renegotiate in line with their fundamentals be invoked while African economies must strive to build a dynamic industrial policy strategies, institutions, processes and mechanisms to promote inclusive growth and trade performance
Empirical Model for Forecasting Exchange Rate Dynamics: the GO-GARCH Approach
No full textThe study aimed at determining a set of superior generalized orthogonal-GARCH (GO-GARCH) models for forecasting time-varying conditional correlations and variances of five foreign exchange rates vis-à-vis the Nigerian Naira. Daily data covering the period 02/01/2009 to 19/03/2015 was used, and four estimators of the GO-GARCH model were considered for fitting the models. Forecast performance tests were conducted using the Diebold-Mariano (DM) and the model confidence set (MCS) tests procedures. The DM test indicates preference for the GO-GARCH model estimated with nonlinear least squares (NLS) estimator – denoted as GOGARCH-NLS, while the MCS test determined a set of superior models (SSM) which comprised of GO-GARCH-NLS and GOGARH model estimated by the method-of-moment, denoted as GO-GARCH-MM. These models were deemed best and adequate for forecasting of the five exchange rate dynamics
The impact of lending rate on the manufacturing sector in Nigeria
No full textThe study investigates the impact of lending rate on output of the manufacturing subsector using the Vector Error Correction Model (VECM) and annual data from 1981- 2014. The empirical results indicated that high lending rate had negative impact on manufacturing output in the long-run. This suggests that increase in lending rate undermines manufacturing output, thus retarding growth in the real sector. Specifically, the estimates revealed that a 1.0 per cent increase in lending rate reduces manufacturing output by 0.03 per cent. The study, therefore, recommends the implementation of investment friendly policies that narrows the lending rate by the deposit money banks (DMBs} in order to stimulate output growth in the manufacturing sub-sector and allow global competitiveness of products. Similarly, development finance institutions should be encouraged to lend at concessionary rates to the manufacturing sector
Macroeconomic stability and the role of financial institutions in promoting financial inclusion in Nigeria
No full textThis article discusses the role of financial institutions in promoting financial inclusion in Nigeria as well as its macroeconomic stability. Positive growth of the economy is prerequisite for financial inclusion but the stability of the economy is sine qua non for economic growth. Therefore, the discussion of financial inclusion is best served when enclosed in the framework of the extent to which the economy is stable. The article further highlights financial inclusion and its related concepts and the role of financial institutions in promoting financial inclusion
The banking system, manufacturing sector and sustainable economic development.
No full textThe paper is structured into five sections. Section one presents the introduction, while section two presents conceptual and theoretical issues. Section three captures issues in Nigeria\u27s manufacturing sector, Section four presents a brief overview on the performance and financial intermediation roles of Nigeria\u27s banking industry vis-a-vis the manufacturing sector, Section five and six contains the challenges and prospect of promoting banking system intermediary services in the manufacturing sector for sustainable development and concludes the paper respectively
Analysis of Inflation Dynamics in Nigeria (1981 – 2015)
No full textThis study examined the dynamics of inflationary process in Nigeria over the period 1981 – 2015, using the bounds testing approach to cointegration. Empirical results indicated that inflation in Nigeria proxied by CPI exhibited a strong degree of inertia. The econometric results showed that past inflation and average rainfall appeared to have been the main determinants of inflationary process in Nigeria over the study period. We also found strong evidence of the importance of money supply in the inflation process, lending credence to the dominance of the monetarist proposition on inflation dynamics in Nigeria. Thus, the paper recommended among others, the continuous moderation of growth in money supply by the central bank and adopting consumers’ expectations of inflation as an input into the monetary policy process
Nigeria’s Private Foreign Assets and Liabilities, 2014
No full textThe survey of foreign assets and liabilities of enterprises in Nigeria was conducted in 2015 to determine the stock of foreign assets/liabilities of Nigerian enterprises as at end 2014. The survey collected relevant information from 740 enterprises while the analysis of survey data was done based on the recipient sectors as well as country of origin of the investments. Survey returns showed that total private foreign liabilities as at end-2014 was N15, 046.07 billion, down by 1.4 per cent from its level in 2013. Of this total, 99.8 per cent came in the form of foreign direct investments, while foreign portfolio investments and other capital flows accounted for 0.04 and 0.21 per cent, respectively. About 43.0 per cent of the total foreign liabilities originated from Europe, while 24.8 per cent and 11.8 per cent originated from Asia, and the Middle East, respectively. The manufacturing sector was the highest recipient sector of foreign investment as it attracted 42.8 per cent of the total foreign capital stock, followed by the extractive sector (40.1 per cent). The stock of outward investments as at end-2014 was N965.83 billion, representing a decline of 29.3 per cent below its level in 2013. The decline was largely accounted for by the 40.0 per cent drop in foreign assets holding of the extractive sector. European (56.7 per cent) and North Atlantic and Caribbean (31.5 per cent) countries were the preferred investment destination for Nigerian investors as the regions jointly attracted about 88.2 per cent of total private capital outflows from Nigeria, while African countries received N25.43 billion (or 2.6 per cent)
Modelling Volatility of the Exchange Rate of the Naira to major Currencies
No full textThe exchange rate between the Naira and other currencies has continued to witness variability with depreciation. This variability makes it difficult to predict returns. Against this background, this paper examines the naira exchange rate vis-a-vis four other currencies. The impact of exogenous variables in modelling volatility is considered using both the GARCH (1,1) and its asymmetric variants. Three of the four returns series showed heteroscedasticity. The results of the fitted models indicate that the majority of the parameters are significant and that volatility is quite persistent. Furthermore, the results of the asymmetric model indicate different impacts for both negative and positive shocks and shows superior forecasting performance to the symmetric GARCH
External management reserve: overview and performance of major asset classes for the period 2000-2016
No full textThis paper discusses in detail, various asset classes available to both active and passive reserves managers and analyse the performance of the asset classes held mostly by central banks. Following an introduction, the paper is structured as follows: Section two reviewed literature on reserves management, including motives and what guides the decisions of the investment committee in determining asset classes. Section three analysed the various asset classes that reserves managers invest in, while section four evaluates the major central banks\u27 asset classes\u27 performance over the lost fifteen years covering the period before and after the 2008 global financial crisis. Section five concludes the paper
CBN real sector financing for inclusive growth and economic development.
No full textlt is important to note that no economy can grow and improve the living standard of its population without a vibrant real sector. Consequently, the Central Bank of Nigeria intervenes in the real sector to stimulate flow of finance and boost productivity and employment generation