Effects of Exchange Rate Volatility on Low Income Residential Real Estate Investment Returns in Nigeria

This paper examined the effects of Naira/Dollar exchange rate volatility on low income residential real estate investment returns in Nigeria using EGARCH model. Time series data for an 11year period between 2000 and 2010 was used in this study. The findings reveal that exchange rate volatility has a significant positive effect on low income residential real estate investment returns in Nigeria within the study period. Magnitude of volatility and volatility persistence measured.....

RESPONSE OF STOCK MARKET VOLATILITY TO FOREIGN EQUITY INVESTMENTS

This study evaluates the response of stock market volatility to foreign equity investments. Specifically, the study examines how foreign portfolio investment and foreign direct equity investment influence stock market volatility in Nigeria, using monthly data from January 2007 to July 2017. Results of preliminary analyses of stock market returns series show evidence of negative skewness, leptokurtosis, non-normal distribution, and average positive monthly return. Estimates from the GARCH-X (1,1) model show evidence of volatility clustering in the stock market returns. The estimates also show that stock market volatility responds to changes in foreign portfolio investment. On the other hand, changes in foreign direct equity investment do not influence stock market volatility. The key implication is for investors to adjust their portfolio to changes in the foreign portfolio investment, in order to mitigate stock market volatility, and for stock market regulators to encourage more inflow of foreign direct equity investment as a more stable source of foreign equity investment

Banking Sector Reforms in Nigeria’s Fourth Republic: A Review of Evidence

One of the most outstanding debates in recent times is whether government banking sector reforms promotes growth and development. Objectively, this study is quite significant as it empirically re-investigates the role of the Nigerian banking sector reforms especially of the fourth republic (2000-2010) on the economy. The study adopts the Granger-causality and Johansen  co-integration econometric approaches in the estimation procedure. Overall, evidence from the study shows that there is no link between fourth republic banking sector reform and economic growth in Nigeria, thereby contradicting the finance-growth nexus of Mckinnon and Shaw (1973) hypothesis. The study, therefore, concludes that any serious effort to ensure the strengthening of the banking sector should be preceded by the narrowing down of the interest rate spread. Moreover, the reform programmes of the Nigerian banking sector should be sustained so as to channel resources from the surplus sector (savings) to the deficit sector (investment) by putting in place appropriate macroeconomic policies that will engender productive activities and ensure sustainable economic growth. Keywords: Governance, Banking sector reform, economic growth, co-integration

An econometric analysis of the investment climate and growth potential in Nigeria

The slow economic growth rate experienced by most developing countries, including Nigeria in the late 1970s and the early 1980s, has now manifested itself in the form of macro-economic imbalances, a wide saving/investment disparity, a steep inflationary spiral, and a high debt overhang. Hence, the study examines improving the Nigerian investment climate for enhanced economic growth. The data was sourced from the Central Bank of Nigeria (CBN) Bulletin and National Bureau of Statistics. The level testing results reveal that none of the variables were stationary at its levels. However, the absolute values of the variables in the first-difference is greater than the Mackinnon Critical value as provided by EVIEWS Package, which means that we do not reject the null hypotheses for the non-stationary series. It was observed that there were many reasons for the poor economic performance of the Nigerian economy, among which was the decline in investment rates. It is thus recommended that polices which will improve and encourage investment should be institutionalised, a stable macro-economic framework should be pursued, a favourable fiscal regime should be promoted, and the financial sector strengthened by diversification to achieve investment objectives

Tax Revenue and Infrastructure on Composite Health and Education Development in Nigeria: A Simulation Approach

Insufficient allocation of resources and infrastructure remains two daunting challenges of human capital development in Nigeria despite government policy measures to efficiency of resources and infrastructure development. This paper examined the effect of tax revenue proxy by value added tax and infrastructure on composite health and education in Nigeria from the period 1980- 2021. This paper utilized the simulation approach in forecasting performance of the macroeconometric model. From the results, the following were observed: First, value added tax has positive and statiscally significan effect on government expenditure on education and health. This implies that an increase in tax revenue causes increase in government’s spending on education and health in Nigeria. Second, health is not a good channel through which tax revenue can be used to influence economic growth, relative to education. Education impacts more on human capital in Nigeria than health. Three, higher investment in infrastructure or higher infrastructure will increase economic growth and human capital development. Four, positive and significant relationship exist between value added tax revenue and government expenditure on education and health. This implies that increase in tax revenue causes increase in government spending on social and community services including health and education. Five, to increase human capital development in Nigeria, temporary tax revenue shock is sufficient. This implies that the growth reducing effect of government tax via permanent increase in value added tax revenue. Six, to increase human capital development in Nigeria, permanent infrastructure development and investment is required. From the results, the following were observed: First, value added tax has positive and statiscally significan effect on government expenditure on education and health. This implies that an increase in tax revenue causes increase in government’s spending on education and health in Nigeria. Second, health is not a good channel through which tax revenue can be used to influence economic growth, relative to education. Education impacts more on human capital in Nigeria than health. Three, higher investment in infrastructure or higher infrastructure will increase economic growth and human capital development. Four, positive and significant relationship exist between value added tax revenue and government expenditureon education and health. This implies that increase in tax revenue causes increase in government spending on social and community services including health and education. Five, to increase human capital development in Nigeria, temporary tax revenue shock is sufficient. This implies the growth reducing effect of government tax via permanent increase in value added tax revenue. Six, to increase human capital development in Nigeria, permanent infrastructure development and investment is required. The study recommended that: (i) The government should increase its investment on critical infrastructure to further bolster human capital development and by extension accelerate the rate of economic growth, (ii) The government should diversify its revenue base and expend more on health and education in addition to building a strong institutional framework to ensure the efficacy of government spending on both health and education. Keywords: Tax revenue, infrastructure, composite health, education, simulation , Nigeria JEL Codes: H24, I10, E27 DOI: 10.7176/JESD/14-6-04 Publication date:March 31st 202

Credit Risk Management and Financial Performance of Microfinance Institutions in Kampala, Uganda

The objective of this study was to evaluate whether relationship exist between credit risk management techniques and financial performance of microfinance institutions in Kampala, Uganda. Specifically, the study examined whether there is a relationship between credit risk identification, credit risk appraisal, credit risk monitoring, credit risk mitigation and financial performance of microfinance institutions in Kampala using sample of 60 members of staff in finance and credit departments of three licensed microfinance institutions in Kampala, Uganda namely Finca Uganda Ltd, Pride Microfinance Ltd, UGAFODE Microfinance Ltd. Primary data was collected using questionnaires and it comprised of closed ended questions. Secondary data was collected from the microfinance institutions (MDI’s) annual reports (2011 - 2015).  Frequencies and descriptive statistics were used to analyse the population. Pearson linear correlation coefficient was adopted to examine relationship between credit risk management techniques and financial performance.  The findings indicate that credit risk identification and credit risk appraisal has a strong positive relationship on financial performance of MDIs, while credit risk monitoring and credit risk mitigation have moderate significant positive relationship on financial performance of MDIs. The study recommends, among others, that the credit risk appraisal process should identify and analyse all loss exposures, and measure such loss exposures. This should guide in selection of technique or combination of techniques to handle each exposure.  The study concludes that MDIs should continually emphasise effective credit risk identification, credit risk appraisal, credit risk monitoring, and credit risk mitigation techniques to enhance maximum financial performance

Credit Risk Management and Financial Performance of Microfinance Institutions in Kampala, Uganda

The objective of this study was to evaluate whether relationship exist between credit risk management techniques and financial performance of microfinance institutions in Kampala, Uganda. Specifically, the study examined whether there is a relationship between credit risk identification, credit risk appraisal, credit risk monitoring, credit risk mitigation and financial performance of microfinance institutions in Kampala using sample of 60 members of staff in finance and credit departments of three licensed microfinance institutions in Kampala, Uganda namely Finca Uganda Ltd, Pride Microfinance Ltd, UGAFODE Microfinance Ltd. Primary data was collected using questionnaires and it comprised of closed ended questions. Secondary data was collected from the microfinance institutions (MDI’s) annual reports (2011 - 2015).  Frequencies and descriptive statistics were used to analyse the population. Pearson linear correlation coefficient was adopted to examine relationship between credit risk management techniques and financial performance.  The findings indicate that credit risk identification and credit risk appraisal has a strong positive relationship on financial performance of MDIs, while credit risk monitoring and credit risk mitigation have moderate significant positive relationship on financial performance of MDIs. The study recommends, among others, that the credit risk appraisal process should identify and analyse all loss exposures, and measure such loss exposures. This should guide in selection of technique or combination of techniques to handle each exposure.  The study concludes that MDIs should continually emphasise effective credit risk identification, credit risk appraisal, credit risk monitoring, and credit risk mitigation techniques to enhance maximum financial performance

Trade- GDP Nexus in Nigeria: An Application of Autoregressive Distributed Lag (ARDL) Model

This study examined Trade-GDP nexus in Nigeria using the autoregressive distributed lag(ARDL) approach. The study covers the periods 1970-2012, employing data sourced from Central Bank of Nigeria Statistical Bulletin of various issues. Econometric evidence revealed that trade openness; foreign direct investment and exchange rate were some of the key factors that explained the trade-GDP nexus in Nigeria. In addition, the estimated ECM result revealed 31% speed of adjustment between the dependent variable (RGDP) and independent variables (TOP, FDI and EXR). Findings from the study also showed that the endogenously determined variables of (TOP, FDI & EXR) are jointly significant in explaining changes in Nigeria’s economic growth. However, trade openness and exchange rate management influences economic growth negatively because of unfavourable terms-of-trade between Nigeria and her trading partners and the continuous depletion of the external reserves. We therefore recommend among others, expansion of the economy’s export base by complete diversification of the economy away from the oil enclave as well as effective exchange rate management in Nigeria by the monetary authorities. Keywords: Trade, economic growth, ARDL co -integration. JEL Classification: F43, F14, C3

Environmental Forces as Catalysts in Electronic-Marketing, The 21st Century Trends in Nigeria

Electronic marketing is the use of electronic data and applications for planning and executing the conception, distribution and pricing of ideas, goods and services to create exchanges that satisfy individual and organizational goals. While a number of research studies have examined the factors that drive electronic marketing, there is only scant empirical evidence on the link between environmental forces activity and electronic marketing integration into our contemporary business model.  The objective of this study is to critically analyze the environment forces that influence e-marketing practices in the 21st century trend in Nigeria. Various environmental factors were identified that hampers electronic marketing growth in Nigeria. Technological Acceptance Model was used as the theoretical underpin for the study. It was concluded that a systematic implementation of e-marketing strategies is positively related to the enhanced job performance of Small and Medium scale Enterprises (SMEs) owner/managers and the overall success of core business processes, that the environmental force if properly streamlined will result to full integration of the electronic marketing tools into the business operation. Various recommendations were given and limitations/suggestion for further studies

Dimensions of Emotional Intelligence and Transformational Leadership: A Correlation Analysis

The study was designed to explore the degree of relationship between emotional intelligence and transformational leadership style. Goleman who popularized the concept of the science of emotional intelligence and brought it to its academic zenith drew on a wealth of research to argue that successful leaders need emotional intelligence, or the attributes of self-awareness, impulse control, persistence, confidence, self-motivation empathy, social deftness, trust worthiness, adaptability, and a talent of collaboration. Data were generated through 5 – point Likert-type questionnaire based on Schutte, Self Report questionnaire. Pearson’s correlation analysis was carried out through the Statistical Package for Social Sciences, and a strong positive correlation of r = .90, was found between emotional intelligence and transformational leadership style