Debt Overhang and Output Stimulation in Nigeria

This study examines the association between debt overhang and output stimulation in Nigeria for a period of 37 years extending from 1981 to 2017, utilizing time series data sourced from the statistical bulletin of Central Bank of Nigeria. Public domestic bank debit outstanding, public domestic non-bank debt outstanding, public foreign multilateral debt outstanding, and public foreign informal debt outstanding was employed as indices of debt overhang, with real gross domestic product utilized as proxy of output stimulation. The study employed ex-post facto research design. The augmented Dickey-Fuller unit root test carried out revealed that all the variables are integrated of order one. The Johansen cointegration test carried out divulged the presence of long run relationship among employed variables. From the result of the study public domestic bank debt outstanding, public domestic non-bank debt outstanding, and public foreign multilateral debt outstanding have positive and significant impact on real gross domestic product, while public foreign informal debt outstanding exerts a positive and insignificant impact on real gross domestic product. The study recommended that the Federal government should sustain current level of debt or decrease the level of debt and also ensure that fund sourced from external and domestic sources are channelled to the designated projects. Keywords: Real Gross Domestic Output in Nigeria, Public Domestic Bank Debt outstanding, Public Domestic Non-Bank Debt outstanding, Public Foreign Multilateral Debt outstanding and Public Foreign Informal Debt outstanding. DOI: 10.7176/EJBM/12-10-06 Publication date: April 30th 202

Inflation, Interest Rate, Real Gross Domestic Product and Stock Prices on the Nigerian Stock Exchange: A Post SAP Impact Analysis

This study investigated the impact of Inflation, Interest rate and Real Gross Domestic Product on stock prices of quoted companies on the Nigerian Stock Exchange (NSE) post SAP. Times series data was used covering the period 1985-2012. The stationary properties of the data were tested using Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) unit root tests. They were all integrated at order I (1). The Johansen Multivariate Cointegration test indicates the existence of long-run equilibrium relationship among the variables in the model. There are no causal relationships between the variables based on the Granger Causality test result. Our equation estimation result indicates a good fit for the model. 96.8% of variations in the dependent variable were as a result of changes in the independent variables. The Durbin-Watson of 1.867475 is a little below the benchmark of 2 but we don’t have to worry about serial correlation problem. Two other diagnostic tests the Breusch-Pagan-Godfrey test for heteroscedasticity and Ramsey RESET test for stability and both indicate we don’t have to worry about those problems. Specifically, the findings suggest that inflation was the most important variable influencing stock prices in Nigeria. Therefore, it is the opinion of this paper that stronger measures be adopted to effectively combat the problem of inflation in Nigeria. Key Words: Heteroscedasticity, Stability, interest rate, Cointegration, Causality, Inflatio

Balance of Payments Disequilibriumin and Implication for Economic Growth in Nigeria

This study examined the impact of Balance of Payments Disequilibriumin And Implication for Economic Growth in Nigeria over the time frame of 1981 to 2020. Secondary data were sourced from Central Bank of Nigeria statistical bulletin of various issues and CBN annual reports. In analyzing the short and long-run dynamic relationship between Gross Domestic Product and selected Balance of Payment determinants which include; Balance of Payment and Exchange rate. This study utilized the Unit root test, Ordinary Least Square method, Granger Causality and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) in capturing the short-run and volatility dynamics of the variables used in the model. The result revealed the existence of negative and insignificant relationship between Balance of Payment and Gross Domestic Product proxy for Economic growth while Exchange rate exhibited negative and significant relationship on economic growth in Nigeria. The study therefore recommends that Balance of payments position in Nigeria constitutes a structural problem that can hinder the attainment of potential growth. It has been shown clearly that, these problems can be addressed by diversifying the structure of production; reduce dependency on imports, making exports competitive in the international markets through macroeconomic stability, improvement in the state of infrastructure, human capital development, and eradication of corruption. Also, Government should create an incentive that would encourage investment in the country and also improve the balance of payments position

Balance of Payments Disequilibriumin and Implication for Economic Growth in Nigeria

This study examined the impact of Balance of Payments Disequilibriumin And Implication for Economic Growth in Nigeria over the time frame of 1981 to 2020. Secondary data were sourced from Central Bank of Nigeria statistical bulletin of various issues and CBN annual reports. In analyzing the short and long-run dynamic relationship between Gross Domestic Product and selected Balance of Payment determinants which include; Balance of Payment and Exchange rate. This study utilized the Unit root test, Ordinary Least Square method, Granger Causality and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) in capturing the short-run and volatility dynamics of the variables used in the model. The result revealed the existence of negative and insignificant relationship between Balance of Payment and Gross Domestic Product proxy for Economic growth while Exchange rate exhibited negative and significant relationship on economic growth in Nigeria. The study therefore recommends that Balance of payments position in Nigeria constitutes a structural problem that can hinder the attainment of potential growth. It has been shown clearly that, these problems can be addressed by diversifying the structure of production; reduce dependency on imports, making exports competitive in the international markets through macroeconomic stability, improvement in the state of infrastructure, human capital development, and eradication of corruption. Also, Government should create an incentive that would encourage investment in the country and also improve the balance of payments position