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Analysis of monetary policy decision making among heterogeneous Monetary Policy Committee (MPC) members at the Central Bank of Nigeria
No full textThis paper provided an empirical analysis of policy-makers\u27 voting patterns on interest rates in Nigeria. Employing a (pooled) Taylor rule and using real-time data obtained from published personal statements of monetary policy committee members at the Central Bank of Nigeria (CBN), the paper tests for preference heterogeneity among MPC members. The aggregate reaction function as well as individual reaction functions for MPC members were used to tests whether there is a difference between the voting patterns of internal members and that of external members of the committee. Our results suggest evidence of heterogeneity among MPC members and that the voting patterns of the internal members are statistically different from that of the external members
Gross Domestic Product (GDP) rebasing and the impact on Nigeria\u27s investment environment
No full textThe paper looks at the impact of the rebasing on an important economic variable - investment. This is because investment is necessary for capital accumulation and economic growth. Specifically, this study examines the impact of GDP rebasing on Nigeria\u27s investment environment. ln addition to this introduction section, section 2 considers GDP rebasing and the Nigerian case, section 3 is on the Nigerian Financial System Strategy (FSS) 2020, section 4 is on investment types, drivers and the Nigerian environment, section 5 offers some lessons for Nigeria and section 6 is the summary and conclusion
Tax harmonization in the West African Monetary Zone: issues and challenges
No full textThis paper explored the theoretical underpinnings for tax harmonization in a monetary union and critically perused the existing tax system in the WAMZ countries and found considerable differences in the applicable tax rates across the countries in the zone. This paper found that tax and proposes that tax harmonization should be the goal for all aspects of member states\u27 tax system and concluded that a high degree harmonization is necessary in the indirect taxes; as such taxes may create an immediate obstacle to the free movement of goods and the free supply of services within the internal market
Effect of monetary policy on agricultural sector in Nigeria
No full textThe study examinee the effect of monetary policy on agricultural sector in Nigeria, utilizing time series data for the periods spanning from 1970 to 2010. The study captures both monetary and non-monetary policy variables such as lending rate, commercial banks credit to agriculture, exchange rate, government expenditure in agriculture and inflation rate in examining the effect of monetary policy on agricultural output. The methodology adopted is the Auto- Regressive Distributed Lag (ARDL) Bound Testing Approach. The results obtained shows that exchange rate and government expenditure had positive and significant effect on agricultural output and, hence agricultural sector in Nigeria. It is recommended that a sound exchange rate policy should be implemented aimed at boosting agricultural exports in Nigeria. Also, government investment to provide the basic infrastructure and institutions should be sustained because without the appropriate institutions, monetary policy cannot impact positively on real sector
Nigeria\u27s monetary conditions index
No full textThe paper aimed to construct a monetary conditions index (MCI) for Nigeria to aid the evaluation of the stance of monetary policy. Quarterly data for 91-day treasury bill rate (TBR), real exchange rate (RER), inflation rate (INF), real private sector credit (RCP), and real gross domestic product (RGDP), covering the period 2000Q1 to 2014Q1, were utilised. The period coincided with key reforms in the money and foreign exchange markets, culminating in the adoption of a new monetary policy framework in 2006. Following some econometric diagnostic tests, an aggregate demand function was estimated using the Johansen co-integration technique
Quality of governance and stock market performance: the Nigerian experience
No full textThe paper examined the impact of governance on stock market performance using quarterly data series spanning 1996Q1 to 2010Q4. An ARDL bound testing methodology was employed to explore such causal relationship. Long-run stable relationships were established through the error correction terms of each of the measures used to the tune of -0.4821,-0.4034 and -0.4080 for all share price index, market capitalisation and the value of total stock traded, respectively. Findings indicate that macroeconomic and financial stability should be constantly maintained and promoted as it constitutes a drag on the stock performance; any acts of corruption should be eschewed as it scares away potential investors into the country and the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government\u27s commitment to such policies should be enhanced altogether
Keynote address at the Executive Seminar on exchange rate policy and economic management in Nigeria
No full textThis is keynote address delivered by the Governor of Central Bank, Godwin I. Emefiele, on the executive seminar on exchange rate policy and economic development- Is there a need for paradigm shift
Structural Breaks, Cointegration and Demand for Money in Nigeria
No full textThis paper estimates the money demand function in Nigeria in the aftermath of the recent global financial crisis and examines whether its underlying properties has changed over the years. Specifically, the existence of a stable long-run demand for money function during the period 1991:Q1-2013:Q4, while accounting for the possibility of structural breaks is investigated. The Gregory-Hansen residual based test for cointegration detected both intercept and regime shifts in 2007:Q1 as the null of no cointegration is rejected at 1 per cent significance level, indicating that long run relationship exists between real money supply, real income, real monetary policy rate, exchange rate spread and movements in exchange rate in Nigeria. This estimation technique is robust to structural break, which ensures that the estimated parameters are unbiased. The CUSUMSQ test provides evidence of a stable money demand function before and after the crisis. The paper infers that since the relationship among the variables holds over a fairly long period of time, the estimated money demand model provides important foundations for monetary policy setting in Nigeria
Destination Sectors and Originating Economies of Nigeria’s Private Foreign Assets and Liabilities in 2012
No full textThe 2013 survey of foreign assets and liabilities of enterprises in Nigeria was conducted to determine destination sectors of foreign private capital flows and economies where such investments originate. The survey covered 649 large establishments in Nigeria with 87.4 per cent response rate. The cross border transactions/investments of the respondents during 2011 and 2012 indicate total foreign claims on the Nigerian economy as at end 2012 rising to N16, 790.78 billion from N13, 647.19 billion recorded in 2011. Of this total, 98.1per cent came in the form of direct investments, while portfolio investments and other capital flows accounted for 1.1 and 0.8 per cent, respectively. About 39 per cent of the total inflow originated from Europe, while 16.7 per cent and 16.3 per cent originated from the Middle East and North America, respectively. A breakdown in terms of destination sectors revealed that extractive industries sector attracted 40.5 per cent and is followed by manufacturing, which received 27.7 per cent. Total stock of outward investment as at end 2012 was N235.94 billion as against N208.44 billion recorded in 2011. In 2012, outward direct investment dominated with 76.5 per cent of the total, while European countries were the preferred investment destination for Nigerian enterprises receiving 57.4 per cent of the total outflow, followed by Africa (27.2 per cent)
Basic and computation of rebased Gross Domestic Product (GDP) Nigeria\u27s experience
No full textThe paper looks at the basic concepts in GDP compilation and the computational processes for the rebased GDP. The paper is structured into four sections. The first section deals with the introduction while section two explains some basic concepts and mathematics for GDP compilation. Section three takes a look at the GDP Rebasing while section four deals with the Recent Development from the rebasing exercise