Empirical Investigation of Fiscal deficits and Inflation in Nigeria

The study examined the relationship between inflation and fiscal deficits in Nigeria. Annual time series data spanning 42 years on inflation, fiscal deficits, agriculture, money supply and gross domestic product were sourced from central bank statistical bulletin special edition 2008 and volume 23 of 2012. The study applied unit-root test for stationary test, cointegration, Granger causality and error correction regression analysis. CUSUM and CUSUMQ statistics test was adopted for stability of the model. The study found out that fiscal deficits had a long run equilibrium relationship with inflation. The causality test showed a unidirectional relationship that run from fiscal deficits to inflation. The error correction model estimate reveals that fiscal deficits exert positive pressure on inflation. It was also discovered that the speed of adjustment of the dynamic short run process to long run equilibrium was very slow. The CUSUM and CUSUMQ test revealed that the model is stable. A fiscal management process that encourages increase revenue and reduction of external debt as well as a high practice of transparency in financial obligation will reduce the level of inflation; moreover, increase production of agricultural goods will retard the growth rate of inflation in Nigeria.   Key Word: fiscal deficits, inflation, money supply, agriculture, econometric tools, Nigeria

Air Transportation Development and Economic Growth in Nigeria

This work is an evaluation of the influence of air transport sector development on economic growth in Nigerian. Over the years, various governments of Nigeria have put in place a series of policy instruments for the development of the aviation sector as sinews to bolster the desired growth. But air transport system continues to mirror inefficiency, mismanagement and airline mishap. This study developed a series of econometrics models including dynamic ordinary regression equation, cointegration, error correction model and granger causality techniques to examine the relationship between air transport and economic growth. The analyses suggests a positive influence of air transport on economic growth, a long run equilibrium relationship and a causal unidirectional relations from air transport to economic growth. The diagnostic test for the normality of the model showed that the model functional form is adequate, stable with no serial correlation. From the analysis, this study recommends a proactive and dynamic cohesive transport policy that benefits all the stakeholders. Also, the sector must improve on its managerial expertise guided by adequate transparency and accountability in order to achieve results and develop the sector to an international standard worthy of emulation. Keywords: Air transport, Economic growth, Econometric analysi

Analysis of the Main Determinants of Inflation in Nigeria

The retard economic growth in Nigeria is associated with macroeconomic instability variables, in particular, the unstable rate of inflation. Consequently, the pursuance of poverty reduction and economic prosperity policy targets remained elusive. This study investigated the main determinants of inflation in Nigeria for the period 1986 – 2011. The Augmented Dickey-Fuller unit root statistics test revealed that all the variables are stationary after first and second difference at 5% level of significance. The co-integration result reveals long-run equilibrium relationship between the rate of inflation and its determinants. The Granger causality test revealed evidence of a feedback relationship between inflation and its determinants. The estimated VAR result showed that fiscal deficits, exchange rate, import of goods and services, money supply and agricultural output have a long run influence on inflation rate in Nigeria. Only lending rate influenced inflation in the short and long run horizon. The variance decomposition and impulse response results show that “own-shocks” were significantly responsible for the variation and innovations in all the variables in the equation. Obviously, inflation in Nigeria is fiscal and monetary policy influence. While this study discourages excessive waste of public funds through fiscal deficit, it recommends that the monetary authority should encourage a lending rate policy that promotes investment as well as retention of a desired level of money supply and interest rates that reduce inflation rate in Nigeria. More so the authorities should greatly be proactive in financing agricultural and manufacturing sector to increase local production of competitive goods that appreciate the Nigeria naira currency in relation to major international currencies. Keywords: Inflation, Fiscal policy, Monetary policy, Agriculture, Econometric tools

Military Spending and External Debt Burden in Nigeria

Abstract This study explores the relationship between external debt and military spending in Nigeria over the period 1986 -201

Macroeconomic Determinants of Defence Expenditure in Nigeria (1970 -2011)

Abstrac

IMPACT OF BANK CREDIT ON MANUFACTURING SECTOR OUTPUT IN NIGERIA

This study examines impact of bank credit on manufacturing sector output in Nigeria. The study sourced secondary data from CBN statistical bulletin for the period of 1986-2017. Manufacturing sector output serves as explained variable, while bank credit and inflation rate serve as explanatory variables. The study adopts ADF and PP tests of stationarity to determine the order of integration of the variables; ARDL model and ganger causality to test the hypotheses that bank credit does not have significant impact on manufacturing sector output; there is no significant long-run relationship between bank credit and manufacturing sector output; and there is no causality between bank credit and manufacturing sector output. Post-estimation tests were also conducted. The findings suggest that manufacturing sector output and bank credit at first difference, and inflation rate at level were stationary; unidirectional causality from manufacturing sector output to bank credit; bank credit exerts significant positive impact on manufacturing sector output; and significant long run relationship among variables. The model is, not serially correlated, homoscedastic, normally distributed, and stable. Based on the findings, the study recommends that existing functional policies such as credit rationing should be strengthened to attract potential investors in the manufacturing sector. Regulatory authorities should encourage the manufacturing sector through accessible and affordable bank credit that will encourage investors in the manufacturing sector to access adequate loan facility to enhance productivity in the sector; and specialized institutions should be licensed by CBN that will be solely responsible for allocating soft credit for manufacturing investment in Nigeria

EFFECT OF EXCHANGE RATE AND INFLATION RATE ON AGRICULTURAL SECTOR OUTPUT IN NIGERIA

The study examined the effect of exchange rate and inflation rate on agricultural sector output in Nigeria from 1981 to 2020. In other to achieve the objective of this study, the Autoregressive Distributed Lag (ARDL) approach was used to analyse the effect of the data on agricultural sector output. The findings reveal that exchange rate and inflation rate has negative insignificant effect on agricultural output (AGDP) while commercial bank credit to agriculture has positive insignificant effect on agricultural sector output (AGDP) in the longrun. In addition, the short-run results revealed that the current value of exchange rate and its lag value (-2), inflation rate current value and commercial bank credit’s current value and its lag value (-1) have negative effect on agricultural output in the short-run.  Similarly, the short run result also showed that the lag values of exchange rate (-1, -3), the lag values of inflation rate (-1, -2 and -3) has positive relationship with agricultural sector output (AGDP)in the shortrun. Consequently, the study recommends among other things that Government should ensure adequate and effective implementation of policies that would enhance stable exchange rates, as effective and prudent management of exchange rate policies will significantly ensure stability of country’s exchange rate (naira). So also government should put in place policy that will help curb inflation. Policy such as selective credit control can be introduced by the central bank of Nigeria with full implementation. As this will help increase production forcing the price of agricultural goods and services to reduce