Evaluation Of Monetary, Fiscal And External Inflationary Sources In Nigeria

This study focuses on evaluating the monetary, fiscal and external inflationary sources in Nigeria. The ARDL estimation technique was adapted to capture these effects. Empirical findings of the study showed that overall, the main determining cause of inflation in both short run and long run periods in Nigeria, are more of monetary and external factors and less of fiscal sources. Specifically, the problem of inflation in Nigeria appears to be more of a structural phenomenon than monetary in the short run. However, in the long run, combinations of monetary and external factors tend to be the major cause of inflation. The study also found the long run effect of lending rate on inflation, to be indicative of the Neo-Fisherism effect

Government spending and economic growth: evidence from Nigeria

This study examines the relationships and dynamic interactions between government capital and recurrent expenditures and economic growth in Nigeria over the period 1961 to 2010. Real Gross Domestic Product (RGDP) was used as a proxy for economic growth in the study.The analytical technique of Vector Error Correction Model and Granger Causality were exploited. Based on the result findings, it is evident that the Wagnerian and Rostow-Musgrave hypothesis were applicable to the relationship between the fiscal variables used in this study in Nigeria. The study therefore recommended among others that: there should be effective channeling of public funds to productive activities, which will have a significant impact on economic growth; there should be joint partnership between the government and the private sector in providing essential infrastructural services that will promote economic growth and development, etc

Supply Response, Exchange Rate and Domestic Price in Nigeria

The purpose of this paper is to empirically investigate the impact of exchange rate and domestic price on export trade in Nigeria. Firstly, based on the literature review and findings of the study in the area, the paper aligned itself within the premise of the traditionalist view which concludes that non-oil export trade in Nigeria is predicated by currency depreciation via lower export prices. Secondly, the introduction of domestic prices, alongside naira rate of exchange as major determinants of non–oil exports in Nigeria, has the implication of showing that currency devaluation could be used to improve the balance of payment position of the country. We therefore recommend policy measures from the monetary authorities in the country that would stabilize the foreign exchange market and the exchange rate. Caution on the part of the government is also recommended when adopting trade policies to ensure Nigeria does not end up with unfavorable terms of trade and balance of payments with trading partner countries

Does Monetary Policy Determine Stock Market Development in Nigeria?

The aim of this study is to assess if monetary policy variables exert any sufficient effect on stock market development in Nigeria, for the time frame 1986-2015. By adopting the Johansen cointegration and error correction method (ECM) of analysis; it was found that long-term association prevails amongst monetary policy variables, and stock market development variables used in the study for Nigeria. However, going by the short-run result, this study submits that monetary policy has not significantly impacted on stock market development. This is because key monetary variables such as lending rate, deposit rate, and Treasury bills issued, do not show any sufficient effect on stock market development; either in the current or previous periods. Thus, implying that monetary policy in Nigeria should be geared towards repositioning the activities of the stock market in Nigeria, to bring about the desired growth and development in the economy

Determinants of Non-oil Export and Economic Growth in Nigeria: An Application of the Bound Test Approach

The effects of the recent global economic crises on Nigeria’s economy have reaffirmed the urgent need for economic diversification in the country. Although no country is immune to such global crises, the over reliance on oil export revenue by Nigeria expose her economy excessively to external shocks. Therefore, this research examines the impact of aggregate non-oil sector and its determinant on economic growth. The bound test approach was explored to examine the long and short run effects of the non-oil export and its ensuing determinants. The result reveals a significant effect of non-oil export on economic growth in both the long and short run. Policies aimed at boosting the level and significance of the non-oil export were proposed

Supply Response, Exchange Rate and Domestic Price in Nigeria

The purpose of this paper is to empirically investigate the impact of exchange rate and domestic price on export trade in Nigeria. Firstly, based on the literature review and findings of the study in the area, the paper aligned itself within the premise of the traditionalist view which concludes that non-oil export trade in Nigeria is predicated by currency depreciation via lower export prices. Secondly, the introduction of domestic prices, alongside naira rate of exchange as major determinants of non–oil exports in Nigeria, has the implication of showing that currency devaluation could be used to improve the balance of payment position of the country. We therefore recommend policy measures from the monetary authorities in the country that would stabilize the foreign exchange market and the exchange rate. Caution on the part of the government is also recommended when adopting trade policies to ensure Nigeria does not end up with unfavorable terms of trade and balance of payments with trading partner countries

AN ASSESSMENT OF FEDERAL OUTLAY ON PIVOTAL GROWTH INDUCED SECTORS IN NIGERIA

This study analyses government capital and recurrent spending outlays on sectors (education, health, defense agriculture and transport and communication) believed to be critical to the growth of the economy, for the period 1980 to 2014. The Error Correction Method was adopted to analyze the short-run impact of each spending division on the prosperity of the economy. The disaggregation into capital and recurrent expenditure was done to gauge the impact each has economic growth. Empirical findings of the study reveal that though capital outlays on the sectors concerned have been more significant than recurrent spending towards achieving the goal of economic growth, more priority should still be given to capital spending. At the same time, the continuous growth in recurrent spending over capital spending should be checked. This study therefore recommends an increase capital spending in the various sectors considered, relative to recurrent spending, in accordance with our conclusions drawn from the period under study. We believe the main critical inducing outlay of government on growth is capital spending. Also, because of the interrelationship existing between the sectors considered, proper harnessing of the potentials of the various sectors is crucial towards attaining the goal of Nigeria becoming one of the twenty most industrialized nations by 2020

Oil price transmission, deficit financing and capital formation

This study investigated the magnitude of the transmission effect from oil price, to deficit financing, and capital formation using the Generalised Method of Moment approach. Based on the Nigerian data, the findings reveals a significant but small inverse oil price transmission effect, through the oil revenue channel to deficit financing. This indicates that growth in public spending is currently pacing faster than government revenue, due to poor fiscal management. In contrast, the transmission effect from oil price, through the oil revenue and deficit financing channels, to capital formation is significantly positive but minute in magnitude. The weak response of capital formation to the transmission effect from oil price, is due to the increasing use of oil proceeds in funding government’s recurrent outlays over the years. Hence, channelling positive growth in oil prices, and repositioning the use of deficit financing to growing capital formation as against consumption demands, will increase diversification of government revenue base and investors’ confidence in the economy through growth in FDI inflows