Stock Market Development and Economic Growth in Nigeria: A Camaraderie Reconnaissance

This study on camaraderie reconnaissance explored the long run relationship between stock market development and economic growth in Nigeria from 1981 to 2015. Market capitalization ratio and turnover ratio were used to measure the depth of development of Nigeria’s stock market, whereas growth rate of real gross domestic product facets economic growth. Secondary data were sourced from Nigerian Stock Exchange (NSE) and National Bureau of Statistics (NBS) were analysed using Autoregressive Distributive Lag (ARDL) model. From the analysis performed, the depth of development in Nigeria’s stock market has positive but insignificant relationship with economic growth both in short and long run. The granger causality analysis dispelled the adeptness of Nigeria stock market to propel growth. Stock market is growth inducing but in the context of Nigeria, economic growth is independent of stock market operation. The government need to steadfastly tackle inhibiting factors such as infrastructural inadequacy, weak institutional and regulatory framework encumbering the stock market from realization of its objective of capital mobilization for economic growth

Stock market development and economic growth: a comparative evidence from two emerging economies in Africa: Nigeria and South Africa

This study empirically explored the short run and long run relationship between stock market development and economic growth by comparing two leading emerging economies in Africa: Nigeria and South Africa from 1981 to 2015. Growth rate of gross domestic product was used to measure economic growth, while stock market development was surrogated by market capitalization ratio to gross domestic product and stock value traded ratio. Data were carefully sourced from World Bank development indicators of both countries. The ARDL co-integration divulged equilibrium long run relationship between stock market development and economic growth in Nigeria but not for South Africa. In both short and long run, there was a positive but insignificant relationship between stock market development and economic growth in Nigeria and South Africa. The granger causality analysis deduced that economic growth of South Africa is significantly affected by market capitalization but not so in Nigeria. The variation in economic growth owing to fluctuation in stock market development indices were observed to be insignificant for both Nigeria and South Africa. The study concluded that stock market development is relevant to economic growth as postulated in theoretical literature. Information disclosure in the stock markets of both countries need to be improve upon in an attempt to reducing information asymmetries. The availability of vital information of listed firms to insiders in the market hinders foreign investments. The non-availability of rating agencies and of a well-defined structure of regulation handicap investors from adequate assessment of firms' risk priori to investing their funds

Public Sector Financial Management and Economic Growth Sustainability in Nigeria: 1986 to 2020

The Nigerian experience with public sector finance management demonstrates fiscal irresponsibility. In Nigeria, the public sector is comprised of the Federal, State, and Local governments, as well as parastatals and organizations that provide public goods and services. Nigeria's public sector, with its diverse financing sources, plays a critical role in economic management via the creation and execution of economic policies, efficient budgeting and planning targeted at attaining domestic and external balancing goals. The purpose of this research was to determine the influence of public sector financial management on the sustainability of economic development in Nigeria. The research examined the influence on real gross domestic product of total federally collected income and total government spending. The Autoregressive Distributive Lag (ARDL) technique was used to analyze data spanning the years 1986 to 2020. To begin, the findings indicate that there is no long-run association between public sector financial management and the sustainability of economic development in Nigeria. Second, overall federal revenue was shown to have a positive association with real gross domestic product. Thirdly, public sector financial management has no discernible influence on the sustainability of economic development in Nigeria. This report recommends that the ideal of sound public sector financial management be embraced in order to strengthen the sustainability of economic development in Nigeria via an effective, efficient, and transparent public account management system

Effect of Monetary Policy on the Performance of the Nigerian Capital Market (1986-2016): Stylized Facts from ARDL Approach

In this study, the empirical effect of monetary policy tools on performance of the Nigerian capital market was re-examined. The real effect of monetary policy tools on capital market performance is still not clear both from theoretical and empirical background, especially in emerging economies like Nigeria. Explicitly, this study evaluated the effect of monetary policy rate (the rate at the Central Bank of Nigeria extend credit facility to other financial institutions operating in the country), cash reserve ratio, liquidity ratio and loan to deposit ratio on the performance of the Nigerian capital market. Nigerian Stock Exchange and Central Bank of Nigeria annual reports of various edition supplied the relevant data for analysis. The Autoregressive Distributive Lag (ARDL) was the technique applied in estimating the model and for co-integration assessment, while granger causality analysis aided in ascertaining the effect of monetary policy tools on capital market performance. The result of the analysis illustrated that monetary policy tools and capital market performance in Nigeria are not co-integrated. The study also found that Nigerian capital market performance is not significantly affected by monetary policy announcement by the Central Bank of Nigeria rather, it is monetary policy rate that is significantly influenced by performance of the capital market. Based on the application of a superior methodology by way of ARDL in data analysis, the Central Bank of Nigeria should be cautious and properly consider the prevailing macroeconomic condition in monetary policy decision, especially with regard to liquidity ratio because of its potential in fuelling or deterring inflation which affects prices of stocks in the capital market

EFFECT OF CORPORATE GOVERNANCE ON FINANCIAL PERFORMANCE OF SELECTED DEPOSIT MONEY BANKS QUOTED ON THE NIGERIAN STOCK EXCHANGE (2005 – 2017)

This study examined the effect of corporate governance on financial performance of selected deposit money banks. Corporate governance is an important issue because of the rise in corporate scandal suffered by corporate organizations arising from insider abuse by management board, and other financial recklessness. Specifically, the effect of board ownership structure, audit committee, independence, age and block shareholding on return on assets, return on equity and earnings per share of selected deposit money banks quoted on the Nigerian Stock Exchange (NSE) were ascertained. The result of the analysis using panel data from 2005 to 2017 established that corporate governance practice has significant effect on financial performance of deposit money banks in Nigeria, however, such effect is marginal considering the number of corporate governance variables that significantly affect return on assets, return on equity and earnings per share. In this regard, appointment into the board should be on the bases of age and experience not on friendship since it positively relates to performance and to the probability of disciplinary management turnover in poorly performing banks. Board members should not be encouraged to have too much stake in the ownership structure of the banks as it is negatively related with performance. The holding of block shares of the banks by individuals, institutional investors or agencies should be discouraged because block shareholding could induce the prioritization of self-interest by block shareholders and the consequent expropriation of firm resources, resulting in decreased bank performance. JEL: G30; G34; G21  Article visualizations

Real Gross Domestic Growth Determinants in an Oil Revenue Dependent Country: An Assessment of Nigeria's Exchange Rate and Interest Rate

The determinants of real gross domestic product growth in Nigeria was ascertained in this study. The research was motivated by 1.53 percent decline in real gross domestic product growth rate in 2016 coupled with the foreign exchange crisis that engulfed the economy. Specifically, the study determined whether exchange rate and interest rate predict real gross domestic product growth using secondary data obtained from Central Bank of Nigeria for the period 1980 to 2016. Aside testing for stationarity of the data and diagnosing the model to meet standard econometric postulations, the Granger Causality prediction estimation was employed to realize the objective of the research. Firstly, by the application of Johansen cointegration and ARDL methodology, the study identify that exchange rate and interest rate are not co-integrated/related with real gross domestic product growth. Secondly, the multiple regression estimated via ARDL shows that exchange rate and interest rate have negative but insignificant relationship with real gross domestic product growth. Finally, the study empirically found that exchange rate and interest rate are not determinants of real gross domestic product growth in Nigeria. To strengthen the value of the local currency against the US dollar in particular, and other currencies of the world, a well-managed foreign exchange floating system is preferred. Diversification from oil to non-oil policies should be pursued with vigour with the view of aggressively down playing importation to reduce the pressure on forex which jolts up exchange rate position adversely

Foreign Direct Investment and Economic Growth: Empirical Assessment of the Nigerian Economy (1986 – 2019)

The purpose of this study is to examine the impact of foreign direct investment on the growth of the Nigerian economy. The Autoregressive Distributive Lag (ARDL) technique was used to analyze data spanning the years 1986 to 2019. The preliminary findings of the ARDL suggested that foreign direct investment and economic development in Nigeria had a long-run link. According to the stated finding, foreign direct investment has a considerable positive link with the rate of real gross domestic product growth. Similarly, total exports are positively correlated with the pace of real gross domestic product growth. On the other hand, total non-oil imports and exchange rates show a considerable negative association with the pace of real GDP growth. The Granger causality test indicated that foreign direct investment inflows into Nigeria had no discernible influence on the growth rate of real gross domestic product throughout the study period. Similarly, the pace of real gross domestic product growth is not greatly impacted by the quantity of total exports, total non-oil imports, or exchange rate fluctuations. This report suggested that trade obstacles be removed, particularly those imposed by customs and port officials. Structural trade-oriented policies should be implemented to stimulate economic growth in Nigeria through increased exports in order to attract additional investors and strengthen the country's output growth rate

FISCAL DEFICIT IN AN OIL DEPENDENT REVENUE COUNTRY AND SELECTED MACROECONOMIC VARIABLES: A TIME SERIES ANALYSIS FROM NIGERIA (1981-2015)

In this paper, we determined the effect of fiscal deficit on selected macroeconomic variables in Nigeria by specifically evaluating the effect of fiscal deficit on gross domestic product, money supply and inflation. To achieve these objectives, we employed various econometric techniques such as unit root test, Johansen co-integration, granger causality test in which variations in gross domestic product, money supply and inflation were regressed on fiscal deficit and exchange rate using time series data from 1981 to 2015. Secondary data casing the time frame were collected from Central Bank of Nigeria statistical bulletin. The result of the analysis revealed that fiscal deficit has no significant effect on gross domestic product, money supply and inflation in Nigeria. The finding also shows that there is a positive insignificant relationship between fiscal deficit and gross domestic product. This is in line with the Keynesian postulation of the existence of positive relationship between fiscal deficit and macroeconomic variables. Based on the findings, government should allocate and effectively monitor funds sourced as a result of fiscal deficit to providing critical economic infrastructures such as electricity, access road, health, communication among others to reap the benefits associated with fiscal deficit. Monetary policy should be structured in such a way as to compliment fiscal policy so that the level of inflation would be lowered whenever government relies majorly on fiscal deficit as an instrument of fiscal policy.  Article visualizations

Financial Inclusion: Nigeria's Microfinance Model Effect Assessment on Women Empowerment

This study ascertained the significant effectiveness of Nigeria’s microfinance model of financial inclusion on women empowerment. Following reforms in the financial system geared towards enhancing women financial inclusion and digitalization of financial products and services, its effect on women empowerment becomes imperative. Specifically, we evaluated the effect of available microfinance banks’ products in rural communities via rent savings, child education, new born and daily savings account on women empowerment. A descriptive survey design was utilized to realize our objective. Two hundred (200) questionnaires were distributed to respondents, out of which one hundred and ninety (190) were fully completed and used for the analysis. After checking for internal reliability of the responses through the Alpha Cronbach’s test, we proceeded to applying Pearson correlation and regression estimations. From the regression estimation, we identified a positive and significant relationship between women empowerment and microfinance banks’ products: rent savings, child education, new born and daily savings account. Thus, microfinance model is a policy in the right direction that will result in more financial inclusion of the women population especially, in rural communities. Subsequently, we recommend the creation of more women tailored products by microfinance banks. This will avail them the opportunity to choose from variety of products and services that specifically suit their needs. Furthermore, collateral for women to access finance from these microfinance banks should be community/socially based rather than individually based

Fiscal deficit in an oil dependent revenue country and selected macroeconomic variables: a time series analysis from Nigeria (1981-2015)

In this paper, we determine the effect of fiscal deficit on selected macroeconomic variables in Nigeria by specifically evaluating the effect of fiscal deficit on gross domestic product, money supply and inflation. To achieve these objectives, we employed various econometric techniques such as unit root test, Johansen co-integration, granger causality test in which variations in gross domestic product; money supply and inflation were regressed on fiscal deficit and exchange rate using time series data from 1981 to 2015. Secondary data casing the time frame were collected from Central Bank of Nigeria statistical bulletin. The result of the analysis reveals that fiscal deficit has no significant effect on gross domestic product, money supply and inflation in Nigeria. The finding also shows that there is a positive insignificant relationship between fiscal deficit and gross domestic product which measure the growth of an economy at given period of time. This is in line with the Keynesian postulation of the existence of positive relationship between fiscal deficit and macroeconomic variables. Based on the findings, government should allocate and effectively monitor funds sourced as a result of fiscal deficit to providing critical economic infrastructures such as electricity, access road, health, communication among others to reap the benefits associated with fiscal deficit. Monetary policy should be structured in such a way as to compliment fiscal policy so that the level of inflation would be lowered whenever government relies majorly on fiscal deficit as an instrument of fiscal policy