Capital Flight versus Domestic Investment in Developing Countries: An Empirical Analysis from Nigeria

Capital flight is a challenge for many developing countries of the world. The problem is more acute in a country like Nigeria where domestic investment has been severely affected. The study undertakes an empirical investigation of the problem using variables of investment, exchange rates and others in a vector error correction mechanism and the ordinary least regression analyses to test the level of significance of the impacts of each of the adopted variables. The results indicate that capital flight has negative but insignificant impact on domestic investment in Nigeria. This is as a result of the high level of capital flight or low level of investment undertaken over the years in the economy. The basic variable involved in the two is the exchange rate which is significant in investment but insignificant in capital flight. The paper recommends further floating of the exchange rate and transparency in its management. It also recommends that policies to encourage autonomous investment by both private and public sector be put in place

Errors and omissions and unrecorded capital flows and flight in Nigeria

One of the estimates of capital flight includes the errors and omission of the Balance of Payment which is been used to balance up the accounts. This study examines the significance of the E and O in the capital flows and flight in Nigeria. The main variables of capital flight and investment and financial savings among others were of concern in the study. The study adopts the paired sample tests and ordinary least squares techniques. It discovers that the e and o affects the statement and the veracity of the accounts in that the models that include it produce better and more significant results. Its main effect is seen in the role it plays in the investment flows where the figures become more significant with its inclusion. This calls for the adoption of measurements of capital inflows that in includes e and o in Nigeria. More importantly it calls for a higher level exactitude in correctly stating the sources and end uses of flows of capital in and out of Nigeria

Exchange Rates and the Consumer Price Index in Nigeria: A Causality Approach

This paper was motivated by the need to establish the impact of importation into �igeria and its main objectives were to find out the significant relationships between the official and parallel exchange rates and the consumer price index (CPI.). It also established that import ratio in the economy is a contributor to the increase in the cost of living (CPI) in the country. The paper adopted the techniques of correlation and Granger causality to find the significance of the relationships between the index and the exchange rates. It found out that there is higher positive relationship between the ratio of imports and the index than exist between the parallel and official rates. The coefficient between autonomous exchange rates and the consumer price index (CPI) is less significant than official rate, while the import ratio in the economy shows a near two-way balance causality with the consumer price index. The more significant one is causality is that import ratio granger causes CPI. The paper recommends a more liberalised foreign exchange market to reduce the impact of the parallel market and increase in domestic production of consumables to reduce importation of domestically substitutable goods in the economy

Agricultural Financing in Nigeria: An Assessment of the Agricultural Credit Guarantee Scheme Fund (ACGSF) For Food Security in Nigeria (1978-2006)

Aside from the eradication of hunger, being one of the one of the Millennium Development Goals (MDGs), food security is an essential development strategy that a viable country must inculcate. As a result of the government agricultural credit policies of, this paper examined the provision of credit to agricultural sector along with the performance of the ACGSF while at the same time evaluating the food security status of Nigeria. It adopts the available data for the period 1978 to 2006 because of data uniformity. It finds out that though credit to the agricultural sector is significant it has not been growing relative to the economy. The ACGSF settled claims are negatively significant and the tardiness is observed in the claims process. The food security aspect shows that that Nigeria is food insecure as the import of food is on the rise as the tests show. Among the recommendations made to improve the current situation includes further enlightenment campaigns to bring the youth into agriculture and the management of the ACGSF by professionals

Investors’ Behavioural Biases and the Security Market: An Empirical Study of the Nigerian Security Market

Behavioural biases describe a replicable pattern in perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality. This paper adopts a primary data approach to investigate the effects of behavioural biases on security market performance in Nigeria. The objectives are in twofold: one, to examine the extent of behavioural biases among security market investors in Nigeria and, to examine the effects of behavioural biases on stock market performance in Nigeria. The paper employed questionnaire as instrument and the technique of correlation with Pearson Product Moment Coefficient to analyze a survey of 300 randomly selected investors in Nigeria security market. We find strong evidence that behavioural biases exists but not so dominant in the Nigeria security market because a weak negative relationship exists between behavioural biases and stock market performance in Nigeria. The paper recommends that individual investors in the market should engage the services of investment advisors which will reduce personal biases in the management of their portfolios

MILITARY RESURGENCE IN AFRICAN POLITICS AND THE DRIVE FOR FOREIGN DIRECT INVESTMENT

The spate of democratic wave that blew across the continent of Africa in the 1990s came with the hope of economic transformation and an end to the decades of backwardness, poverty and want. Prior to this period, democratic governance was the exception rather than the norm. Military high command across the continent dictated the pace for many decades and most times falling short of the messianic appeal that drew them into politics and governing with their diktat nature and abuse of human rights, the economies of most countries of the continent where the military juntas were entrenched, experienced stall and retrogression, creating contrition for grumbling by the weakened civil society in these countries. However, the turn in the dynamics of the international system following the collapse of communism and insistence of the continent’s development partners on democratization, compelled many of the military juntas to retreat back to their barracks, thus opening the space for inflow of investments which is in dire need to reverberate the ailing economies. But after a brief spell of power in the hands of the civilian authorities, the lustre of power seem to be drawing some elements in the military high command to the old scenarios which resemble a reverse wave of democratization, thus allowing the gains of civilian advancement to be lost while the countries relapse. One of the expected areas of relapses with the resurgence of the military back in power is in capital flows into the countries for development purposes. The examines these issues and concludes that the resurgence of military rule in the West African sub-region is a set back to the development of the countries in the sub-regio

The National Housing Fund, Mortgage Finance and Capital Formation in Nigeria

Mortgage financing is one the ways by which housing stocks are added and capital formation takes place in an econogmy. The paper examined the impact of the National Housing Fund (NHF), a government agency, in the process of capital formation in Nigeria. The paper adopted some key variables among which are the capital formation, lending rate and capital expenditure and the various aspects of mortgage loans in the economy. The paper employed the Two Stage Least Square (2SLS) techniques to measure the impact of the various units. It discovers that the mortgage loan generally is significant and insurance companies advances for mortgage is also significant while the National Housing Fund (NHF) is not significant. This is however due to many problems bedeviling the Fund. The paper recommends among others, the deepening of the mortgage finance market, further assistance to the help to the National Housing Fund and while the government incentivises the firms involved in lending on mortgage fiscally to improve performance and housing stock in the economy

Capital Flight and Financial Globalisation: Will Further Opening up Increase Capital Flight out of Nigeria?

Capital flight is a challenge to many emerging economies especially those with yet to be perfect financial structures and systems. This study undertakes a study of capital flight as it applies to the Nigerian environment in the face of the current episodes of financial globalisation and capital outflows out of the economy. It adopts paired sample and the ordinary least square techniques with the main variables of exchange rates, Kaopen, investment and others to perform its analyses. The main finding is that the Nigerian capital flight has not been significantly increased by the financial globalisation process but it also indicates that Kaopen (an index of financial globalisation) is significant in the process of acquisition of external assets and might therefore, jeopardise the country's ability to retain capital within the economy for development purposes. Exchange rates and domestic investment show significance and thus are impacted by the process. The study recommends the improvement in the domestic investment variables and a cleaner float of the currency to retain capital and improve the environment so that Nigeria can reap the benefits associated with the process of fmancial globalisation

The Role of Single Financial Services Regulation and the Central Bank of Nigeria-A Vision 2020 Expectation

Central banks being creations of governments are not fully insulated from politics of the day especially in developing countries, which affects performance of assigned function and should mainly be concerned with impacting their economies through the management of the monetary aspects. Ha}ling devolved the functions of regulation of the financial system to other institution who manages the system for optimum performance for the benefit the investors and consumers, they are more focused on the economy. This paper argues that the Nigerian financial system should adopt a single financial regulator who would regulate the various financial institutors rather than the present multifarious regulators. In the process, a number of issues on current mode of regulation and problems and their effectiveness were dealt with. This paper is of the opinion that it is proper to adopt the single regulator right away having laid the foundation in the FSCC, with one further step forward and need not wait until 2020 but allow the institution to mature by this period. The FSCC need not regulate all for now but the less key sector with the CBN should regulate the banks and SEC the stock braking firms, for certain reason in the interim. The remaining institutions should be regulated by yjr proposed new financial regulator