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Economic policy trilemma and exchange rate management in Nigeria
No full textThis paper considers the choice and trade-offs that Nigeria\u27s economic policymaker face when deciding on the simultaneous combination of monetary policy exchange rate management, and financial openness policies to adopt- the monetary policy trilemma. The paper finds empirical evidence of the monetary policy trilemma for Nigeria, implying that there is indeed a tradeoff among monetary independence, exchange rate stability and financial integration
Exchange rate and inflation: is there a relationship in Nigeria
No full textThis paper attempts to examine the link between exchange rate and domestic price level in Nigeria. Employing the VAR technique, the study used monthly series of inter-bank rate, world export prices, real gross domestic product, oil prices and consumer price index from 2000MI to 2015MI. The results from the study show that exchange rate pass-through to price level is high. a shock to exchange rate (depreciation) would increase domestic price by 0.72 per cent in the first month. The effect rose to 0.82, 0.85 and 0.86 per cent in month 2,4 and 6, respectively, before it began to fall. By the sixth month, it stood at around 0.84 per cent, on the average. Also the results of the VAR model and exchange rate pass-through coefficients indicate that pass-through to price level in Nigeria is partial or incomplete
Sovereign and quasi-sovereign insolvency: features and resolution options
No full textGovernments like businesses, are sometimes faced with financial constraints, which impede it to carry out its functions. Thus, states, like households and firms, sometimes need to borrow to finance its activities. Unlike government revenue, expenditures are counter-cyclical and debts incurred have to be repaid at some future date, based on a repayment schedule and pre-determined terms. ln the event of a debt crisis, default or liquidity situation, unlike households and companies, the effects are more pronounced for sovereign states mainly for two reasons. This paper examines the events that trigger sovereign insolvency and likely measures of resolutions. lt acknowledges the absence of a one-size-fits-all approach to fiscal distress resolution. lt also examines some fiscal indicators for Nigeria through a ratio-based analysis in an attempt to discern the existence or otherwise of build-up of liquidity and/or insolvency features
Forecasting Nigerian Stock Market Returns using ARIMA and Artificial Neural Network Models
No full textThe study reports empirical evidence that artificial neural network based models are applicable to forecasting of stock market returns. The Nigerian stock market logarithmic returns time series was tested for the presence of memory using the Hurst coefficient before the models were trained. The test showed that the logarithmic returns process is not a random walk and that the Nigerian stock market is not efficient. Two artificial neural network based models were developed in the study. These networks are TECH (4-3-1) and TECH (3-3-1)whose out-of-sample forecast performance was compared with a baseline ARIMA (3,0,1) model. The results obtained in the study showed that artificial neural network based models are capable of mimicking closely the log-returns as compared to the ARIMA based model. The out-of-sample evaluations of the trained models were based on the RMSE, MAE, NMSE and the directional change metric Dstat respectively. Based on these metrics, it was found that the artificial neural network based models outperformed the ARIMA based model in forecasting future developments of the returns process. Another result of the study shows that instead of using extensive market data, simple technical indicators can be used as predictors for forecasting future values of the stock market returns given that the returns has memory of its past
Bridging the housing deficit gap in Nigeria through the mortgage refinancing scheme.
No full textThe objective of this paper is to assess the efficacy of housing mortgages and the current mortgage refinancing company at addressing the housing deficit in Nigeria. This paper would be structured \u27 thus: section I is the introduction, while section 2 looks of housing provision and policy in Nigeria. Existing housing finance options in Nigeria are discussed in section 3 and the need for mortgage refinancing in Nigeria in section 4. Challenges of mortgage refinancing in Nigeria are examined in section 5, while the conclusion and recommendations are presented in section 6
Cost reduction strategies & corporate governance: the need for a paradigm shift in public sector financial management in Nigeria
No full textThis study is on exposition of the imperatives of cost reduction strategies and corporate governance practices as it relates to financial malfeasance. The mechanics for a paradigm shift discussed include: cost reduction techniques, adoption of cost efficiency techniques and maintenance and reportage of accurate financial records, etc.; along with adoption of sound corporate governance policies of accountability, adherence to regulatory framework, and respect for stakeholders\u27 interest. The study concludes by suggesting further initiatives to \u27clean-up and reposition\u27 the sector for growth & economic development. These include: effective justice system, stepping up the policy of cashless economy, entrenching protection programs for whistle blowers, among others
Central Bank of Nigeria Annual Report and Statement of Accounts for the Year Ended 31st December 2014
No full textAnnual Report and Financial Statements of the Central Bank of Nigeria (CBN) for the year ended 31st December, 2014. In general, 2014 has been a very eventful and challenging year for the Bank, the country, and the world at large. In the course of the year, the Bank underwent significant changes in its governance composition. In 2014, the global economy witnessed considerable vulnerabilities characterized by fragile growth and weak economic outlook. Global growth recovery was modest and continued to be threatened by strong downside risks, as a result of sharp drop in commodity prices, escalating geo-political tensions, and heightening threats to financial markets that resulted from the reversal of monetary stimulus in the US. Aside from the elevated risks to capital flows following the end of the US Federal Reserve\u27s Quantitative Easing Program, the key concern for the Nigerian economy was associated with the significant decline in global oil prices. During the year under review, the spot price of Nigeria\u27s crude oil fell by over 50 per cent, from a peak of US63.19 per barrel by end-December 2014. This exerted a downward pressure on Nigeria\u27s external reserves with an attendant loss in value from US34.24 billion at the end of the year. The latent and direct effects of the uncertainty associated with increases in oil price volatility raised speculative activities in the domestic foreign exchange market and thereby intensified demand pressure that caused a weakening of the Naira in all windows during the course of the year
Cointegration Analysis of Public Expenditure on Tertiary Education and Economic Growth in Nigeria
No full textThe paper investigates the Impact of public expenditure on tertiary education and economic growth in Nigeria using time series data for the period 1990- 2011.The econometric methodology employed was cointegration and error correction technique. The study concludes that public expenditure on tertiary education has positive impact on economic growth in Nigeria. The study recommended that government and private sectors should partner by mobilizing resources to furnish tertiary institutions and equip them with adequate facilities in order to enhance tertiary education development for sustainable economic growth
Modification of Hansen-Hurwitz’s Estimators for Negatively Correlated Variates
No full textMost estimators in probability proportional to size (PPS) with replacement (WR) sampling design are defined for positively correlated variables. The literature on estimators involving negatively correlated variates is underdeveloped. This study utilized the law of inverse proportion to derive selection probabilities to modify the Hansen-Hurwitz’s estimator for use when negatively correlated variables are encountered in surveys. The suggested estimator is unbiased and could perform better than other estimators when information conveyed by correlation coefficient is used
Responsiveness of Nigeria\u27s short-term interest rates to changes in the policy rate
No full textThis paper appraises the efficacy of the Monetary Policy Rate (MPR) as an anchor for other short-term interest rates in the economy. Adopting the vector autoregression approach, the responses of Nigeria\u27s short-term interest rates to changes in the interbank rate (proxy for MPR) was modelled. The paper found that the pass-through from MPR to money market interest rates in the long-run is higher for the prime and lending rates than for changes in the Treasury bill rate and 3-month deposit rate. Overall, there seemed to be an asymmetric impact with an increase or fall in the interbank rate