External Debt, Servicing and Debt Relief Transmissions In Nigeria

The study examined the trend of external debt, debt servicing and debt relief transmissions in the Nigerian economy. The huge for external debt to argument domestic saving to boost investment in developing countries is obvious but more crucial to these variables is tracing out their effects on economic development. Indebted countries as observed even in some case find it difficult to service such debt leading to international concerns to writing off such debts to ameliorate the plight of the citizens. The study used structural VAR to trace out the structural effect of these variables in the Nigerian economy. Also examined was the 2005 external debt relief to Nigeria by the London Paris club through descriptive techniques to illustrate how the relief was channeled down to other macroeconomic variables in the economy. The descriptive analysis showed that soon after the debt relief, government expenditure on health and education improved. Also the position of the nation foreign exchange appreciated which cumulated to higher economic growth rate in Nigeria. Queuing from the descriptive analysis, the structural VAR result showed a decomposed shock to exchange rate were absorbed by external debt and external debt service after itself. This shows that external debt and debt servicing affects the country’s exchange rate. Decomposed shock from health and education outputs were strongly influenced by external debt servicing. Economic output in Nigeria, apart from itself were largely influenced by EXR (24 percent) followed by HLTH and EXD respectively. The study concludes that external debt is a crucial variable to developing countries and the trickle-down effect of its components are felt in the Nigerian economy. The study therefore recommends good policies to effectively transmit the gains from external borrowing to boost critical infrastructural deficit in the country. Keywords: external debt, debt servicing, education, health, exchange rate, debt relief and economic growth

Education and Health as Siamese Twins in Nigeria’s Economic Development

The study examined the effect of education and health as Siamese twins’ indicators of human capital (HC) in the economic development process in Nigeria. The imperativeness of HC in Nigeria becomes out-sound when such uprising like education standard, quality of graduates, tertiary institution ranking, standard of medical facilities, rising diseases/infections, rate of infant mortality, low life expectancy and access to medical service per thousand etc are considered. This study therefore seeks to question the efforts of government in contributing to transform these sectors and seek to know which sector impact more on economic growth in Nigeria. Annual data on education, health and economic output with the dynamics of both descriptive and econometric methods from 1981-2010 were used. The descriptive analysis showed that health and education effort by the government were inconsistent with expectation until the nations’ democratic dispensation where a progressive efforts were evident in HC development. With innovation in the endogenous growth model, the OLS regression showed that the education growth contributes significantly to on economic growth rate in Nigeria within the study period while the health growth rate negatively relating to economic growth rate though at a non-significant level in Nigeria economy. Conclusively, both education and health are germane to economic growth but education impacted more in Nigeria and no effort exerted will be too much. The government and private sector are therefore implored to invest in education and health-related areas for healthy economic transformation in Nigeria. Keywords: Education, Health, Human Capital, Complementarity, Economic Growth and Governmen

Foreign portfolio investment and Nigerian bond market development

The study examined the contribution of foreign portfolio investment (FPI) towards financing Nigeria infrastructural deficits and determined the factors that attract FPI into the Nigerian bond market. It also examined the relationship between FPI and bond yield in Nigeria. Primary data were obtained through administration of questionnaires to directors of finance, chief finance officers and investment officers of 128 firms out of 271 firms in financial and manufacturing sectors of the Nigerian economy. Stratified sampling technique was used to select 100 stock broking firms that were controlling 90% of the secondary bond market trading activities while purposive sampling technique was used to select the existing 18 primary dealers and market makers and 10 non-financial institutions that had raised fund in the domestic bond market within the study period. Secondary data on bond index, bond market capitalization, real interest rate, real exchange rate, inflation rate, gross domestic product, external debt and external reserve were obtained from publications of Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Debt Management Office (DMO), Nigeria Stock Exchange (NSE) and National Bureau of Statistics (NBS). Data collected were analyzed using both descriptive statistics such as line graphs, bar charts and simple percentages; and inferential statistics which was mainly multiple regression analysis. The results showed that there was no FPI in the bond market until 2003 when the federal government through the Debt Management Office issued the first FGN Bond series. In addition, between 2003 and 2011, the contribution of the FPI to long term funds in the bond market was 10% of the total bond market capitalization which was considered very low. Interest rate (85%), Gross domestic product (90%), bond market capitalization (91%), inflation rate (89%) and external reserve (95%) were found to be major factors that attracted FPI into the Nigerian bond market as stated by the respondents. Finally, the results showed that there was a significant relationship between FPI and bond yield (r = 0.44, p< 0.05). The study concluded that factors attracting foreign investors into the bond market in Nigeria are critical and if well managed by policy makers could enhance the attraction of FPI needed for financing infrastructural projects through the Nigerian bond market

Oil price shocks and fiscal policy management: Implications for Nigerian economic planning (1980-2009)

High Oil price fluctuations have been a common feature in Nigeria and these have considerably constituted a major source of fiscal policy disturbance to the Nigerian economy as well as the economies of other oil producing countries of the world. The over-reliance on oil production for income generation combined with local undiversified revenue and export bases is an issue for concern. This has policy implications for economic policy and in particular fiscal policy management. The motivation for this study is to examine the effect of oil price shock on fiscal policy in the country. Using structural vector autoregression (SVAR) methodology, the effects of crude oil price fluctuations on two major key fiscal policy variables (government expenditure (GEXP) and government revenue (GREV)), money supply (MS2) and GDP were examined. The results showed that oil prices have significant effect on fiscal policy in Nigeria within the study period of 1980: 1 to 2009: 4. The study also revealed that oil price shock affects GREV and GDP first before reflecting on fiscal expenditure. The study suggests strongly that diversification of the economy is necessary in order to minimize the consequences of oil price fluctuations on government revenue, by implication government expenditure planning in the country

Impact of International Trade on Economic Growth in Nigeria

Using data from the World Development Indicator (WDI) and the Central Bank of Nigeria (CBN) Statistical Bulletin, this article analyzed the impact of exports, imports, the currency rate, and inflation on Nigeria’s economic development between 1981 and 2020. The research employed Autoregressive Distributed Lag (ARDL) bound testing methodology. The variables utilized in the study were evaluated for stationarity using the Augmented Dickey-Fuller and Philip Perron test, and the bound testing process was applied to the equations. The lag of variables test can be performed to determine the relationship between the variables. The outcome demonstrated that variables are stationary at first difference. Economy growth, exports and imports, exchange rate, and Inflation all exhibit long-term cointegration, as determined by a cointegration test. Export positively impacted on growth while inflation and exchange rate were found to be negatively affecting growth in Nigeria. The article indicates that there is a beneficial association between international commerce and economic growth and supports the policy of encouraging exports and expanding Nigeria’s presence on global markets

Effect of Population Growth on Human Capital Development in Nigeria

Despite several studies on the impact of human capital development on economic development and studies on the impact of population growth on economic development, only a few studies have directly linked the impact of population growth on human capital development. In view of this, this study analyzes the causal relationship between population growth and human capital development from the period of 1970-2020. The primary school enrolment rate was set as a proxy for human development capital and the population growth rate used to measure population growth. In carryout the study, the Augmented Dicker Fuller test, was used to test for stationarity. The two variables were stationary at levels. The granger causality test was then carried out and results revealed bi-directional causality in that population growth granger caused human capital development and vice versa. This is a preliminary study that hopes to spur up more studies in this direction with specific interest to Nigeria. The policy recommendation is for massive investment in human capital along Lucas postulation and UNESCO education policy for developing nations like Nigeria