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Nigeria\u27s monetary survey: 2001-2014
No full textThe paper showed that Nigeria\u27s monetary survey is a useful tool in the analysis of monetary development and its linkages with key sectors of the economy. It conveys a useful insight on the evolution of the payment system and money holding behavior. Findings indicated that Nigeria\u27s broad money aggregate was largely determined by external factor, pre-2007 global financial crisis, while domestic factors had significant implications for monetary management post-2007
GDP Per Capita in Africa before the Global Financial Crisis: Persistence, Mean Reversion and Long Memory Features
No full textThis paper examined the long memory features of GDP per capita data before the global financial crisis, using a sample of 26 African countries. The study employed fractional integration and tested the stability of the differencing parameter across the sample period for each country. The results indicated that most of the countries’ GDP series were I(1) or higher. Evidence of mean reversion was observed in 10 countries where the disturbances were autocorrelated. There was strong evidence against mean reversion in the remaining 16 countries. The results also indicated that the fractional differencing parameter was stable in 17 countries, while the presence of structural breaks was investigated in the remaining 9 countries
Consumer Confidence Indicators and Economic Fluctuations in Nigeria
No full textConsumer confidence indicators(CCI) serve as a veritable tool for providing useful information to policy makers, forecasters and the general public. Recent studies indicated the possibility of a slowdown in output, resulting from the pessimism of consumers in their expectations about the general state of the economy, even if their pessimism were not based on economic fundamentals. This study evaluated the predictive ability of the CCI in forecasting economic fluctuations in Nigeria. The study applied the Granger Causality tests, impulse response functions and forecast error variance decomposition to assess if CCI granger causes output growth as well as ascertain the magnitude of the change in GDP resulting from a change in CCI. Results from granger causality tests indicated a causal relationship between CCI indicators and real GDP growth in Nigeria. Furthermore, the study found that CCI explained the movements in economic activities, even though the magnitude was small. These results have important implications for the usefulness of CCI in planning and forecasting macroeconomic aggregates
The impact of external reserves\u27 position on capital Flows: the Nigerian experience
No full textA number of factors will determine whether capital will flow in and out of an Economy. The monetary Authority in every country have the sole right to maintain and manage the external reserves hereby maintaining confidence in the country monetary and exchange rate polices, provide confidence to international community on the country\u27 ability to meet its external obligations and provide liquidity to government to meet its external obligations; and maintain foreign exchange liquidity. The main objectives of this paper is to access the impact of external reserves position in attracting capital flows
Currency Substitution: Evidence from Nigeria
No full textThis paper examines the existence, causes and effects of currency substitution in Nigeria by estimating conventional money demand equations based on a partial adjustment and an autoregressive distributed lag models using three definitions of monetary aggregates. The behavior of the foreign currency/Naira deposit ratios have been influenced by devaluation expectations, exchange rate risks and political uncertainties during the Yar’adua-Jonathan presidency. Also, the money demand estimations reveal that short-term foreign interest rates significantly affect the demand for the Naira, suggesting strong evidence of currency substitution and the possibility of importing considerable instability in the economy
On Time Series Modeling of Nigeria’s External Reserves
No full textThis paper proposes three short-term forecasting models for the adjusted external reserves using the seasonal autoregressive integrated moving average (SARIMA), seasonal autoregressive integrated moving average with an exogenous input (SARIMA-X) and an autoregressive distributed lag (ARDL) processes. The performances of the proposed models are compared with the existing model obtained using an autoregressive integrated moving average (ARIMA) process using the pseudo-out-of-sample forecasting procedure over July 2013 to May 2014. The results show that SARIMA model outperformed the other models in three to six months forecast horizon, whereas ARDL model performs better in one to two months forecast horizon. Therefore, in forecasting external reserves in longer horizon, the paper concludes that seasonality should be accounted for by using the SARIMA model
Impact of the 2007/2008 Global Financial Crisis on the Stock Market in Nigeria
No full textThe convergence of global economy makes all countries and all markets sensible to the happenings in other countries (the contagious effect). The 2008 global financial crisis that had its origin from USA was alleged to have had varying degree of impacts on different capital markets in various countries. This paper investigated the impact of the 2007/2008 global financial crisis on the Nigerian capital market. Monthly time series data from January 2006 to December 2009. All Share Index (ASI) was used as proxy for the performance of the Nigerian Capital market, while Credit to the Private Sector (CPS), Price of Crude Oil (POIL), Money Supply (MS) and Dow Jonews Industrial Average (DJIA) were the set of explanatory variables used to ascertain the effects of the crisis on the capital market in Nigeria. The paper employed the Vector Error Correction (VEC)model for the analysis. Based on the estimated Cointegration and the VEC analyses, the paper found that the global finanancial crisis adverstly and significantly affected the Nigerian capital market both in the shortrun and long run. This was clearly evidenced by the fact that POIL slumped to a record low level, MS equally decreased and the CPS contracted thereby reducing the idle balances which could have been invested in stocks. All these are clear evidences of the crisis on the performance of the Nigerian capital market. Hence the global financial crisis of 2007/2008 was no respecter of any economy, eventhough some writers in Nigeria were quick in concluding that the Nigerian financial sector was insulated and robust, but it was not long after the economy was brought to its knees as the stock market in Nigeria crashed leading to a valuable lost of capital assets and investments
On the Compilation of Labour Force Statistics for Nigeria
No full textComputing unemployment rate using a 40 hours a week benchmark implies that any person who has worked for less than 40 hours during the reference week is considered unemployed. This method has become outdated given the present realities of the working environment in Nigeria, particularly, considering the nature of certain activities in the service sector of the economy. This document presents the new definition and revised methodology that is used to re-compute the labour force statistics in Nigeria between 2010 to 2014 Q4. The high rate of underemployment among age “25-34” years showcased the difficulty associated with youth and graduate unemployment. This is particularly worrisome because this category falls within the very active labour force population. Policies that will address youth and graduate unemployment phenomenon in the country are, therefore, required
Estimating Bull and Bear Betas for the Nigerian Stock Market Using Logistic Smooth Threshold Model
No full textIn this paper, we examine the Nigerian stock market sector returns and estimate the bull and bear betas using the Logistic Smooth Threshold Market (LSTM) model. The LSTM model specification follows from the linear Constant Risk Market (CRM) model. We estimate the LSTM model for the overall sampled daily time series from 2001 to 2012 using the conditional nonlinear least squares approach. We also estimate the model for each of the All share Index (ASI) sub-samples taking the time of financial crisis (February 2008) as the break point. The results show the significant correlations of stocks returns in each market industry with ASI. Nonlinear LSTM dynamics are found to be significant, with significant bull and bear betas in the overall and each of the sub-samples. We find in particular, that the Petroleum, Finance, and Food and Beverages sector equities to be of higher investment risk within the study period
Financing government programmes in economic downturn: policy options
No full textThis author examines the various policy options for the manufacturing sector of the economy in an economic downturn