Effects of Trade Facilitation on Inequality: A Case Study of Sub-Sahara Africa

Abstract. Inequality in the sub-Saharan Africa has been on the high side compared to other regions of the world. The policy makers in the region are aware of this and have implemented several policies to stem it. Among the solutions is inclusive growth and strong trade reforms. However, the trade position is still not encouraging even though it is rising.  One major factor inhibiting trade and hence inequality is costs attached to the movement of goods across border, that is, trade facilitation. This study investigated the effectiveness of trade facilitation on inequality in a panel of 38 SSA countries spanning from 2005 to 2012. The results show that not all trade facilitation variables contribute to reduction in inequality. While reduction in time required to export significantly reduce inequality, time required to import, and to set up a new business worsened inequality. Custom efficiency is effective and has positive impact on inequality, that is, inequality is less, and the more efficient Customs are. Following these findings, authorities in the region will do well in addressing inequality issues by paying more attention to transaction challenges facing exports and custom efficiencies.Keywords. Inequality, Trade facilitation, Generalized method of moments, Logistic index.Jel. D63, F18, B23, F13

Revisiting the Effects of Workers’ Remittances on Economic Development in Nigeria

Poverty in Nigeria continues unabated despite huge inflow of remittances. Our result supports the argument that remittances can improve economic growth but can also worsen overall wellbeing. Reasons for this are, first, remittances beneficiaries in Nigeria are concentrated in the middle income class with high propensity to consume. Second, due to high propensity to consume, consumption triggers good prices in such a way as to worsen the purchasing power of the poor. Third, institutions are weak and the poor do not benefit from weak institution. Thus good quality institutions should be encouraged while ostentatious spending should be discouraged

Fiscal deficit and inflation rate in selected African Regional Blocs: A comparative analysis

Abstract. This study investigates the effect of fiscal deficit on inflation rate in selected African countries. The data collected spans 22years from 1994 to 2015. The countries considered are Egypt, Kenya, Mali, Nigeria, and South Africa.  The selection of these countries was based on the countries with highest fiscal deficit or inflation rate in each of the geo-political zones in Africa. Based on the nature of the data, an autoregressive distributed lag (ARDL) in the context of Keynesian model of aggregate expenditure was specified and estimated.  The result shows that inflation effect of fiscal deficit is country specific and period specific.  Out of the five countries considered, it is only in Nigeria and South Africa that inflation is affected positively by fiscal deficit in the short run.  In the long run, Nigeria is the only country where inflation rate is affected positively by fiscal deficit.  In Egypt, there was no short run effect of fiscal deficit while in Kenya, there was negative effect.  Recommendations were proffered based on these results. Keywords. Inflation, Fiscal deficit, Autoregressive distributed lag.JEL. E24, F40, J30

Revisiting the Effects of Workers’ Remittances on Economic Development in Nigeria

Abstract. Poverty in Nigeria continues unabated despite huge inflow of remittances.  Our result supports the argument that remittances can improve economic growth but can also worsen overall wellbeing.   Reasons for this are, first, remittances beneficiaries in Nigeria are concentrated in the middle income class with high propensity to consume.  Second, due to high propensity to consume, consumption triggers good prices in such a way as to worsen the purchasing power of the poor.  Third, institutions are weak and the poor do not benefit from weak institution.  Thus good quality institutions should be encouraged while ostentatious spending should be discouraged.Keywords. Remittances, economic development, financial institutions, governance institution.JEL. F40, I32, C22

Testing the joint stock market efficiency of OPEC countries

The study investigates the joint market efficiency hypothesis of the OPEC countries by obtaining monthly stock price data from seven OPEC countries from January, 2005 to April, 2016.  The study confirms the risk-return tradeoff in the OPEC stock markets.  While most relationships are positive only a pair of country shows strong negative association   Results of both parametric and nonparametric tests indicate that all OPEC members’ monthly stock return, except Qatar, are not weak-efficient. This implies that not all OPEC stock markets are efficient.  Meanwhile, the study finds that current monthly stock return of one country member can be predicted using the historical monthly price movement of another OPEC member.  As a whole, the monthly stock price of OPEC countries are not jointly weak efficient.  Recommendations were offered based on these important discoveries

Forecasting Inflation and Exchange Rates under Financial Uncertainty: New Evidence from Nigeria

The increasing dealing of professional exchange rate forecaster in the financial market exposes the decision of the financial investor to financial uncertainty. Thus, this paper examines the impact of financial uncertainty on professional exchange rate forecast in Nigeria using a monthly data from the period January, 2006 to June, 2022. The paper considers monetary policy and financial uncertainty to account for different dimensions of uncertainty. Based on the Bayesian liner regression utilized, it is observed that stock market activities proxied by stock price index, improves economic performance in Nigeria. The forecasting performance is evaluated by comparing two of the most common measures to judge forecasting accuracy, Root Mean Square Errors (RMSE) and Mean Absolute Error (MAE). The result of the RSME, MAE and MAPE indicate a good accurate prediction of the model, hence, the model is perfect and no error. Therefore, the model has a good forecasting performance. However, interest rate and stock price are predicted to fall. The study concludes that past values of inflation rate, interest rate and stock market price are significant determinant for forecasting professional exchange rate in Nigeria. Policy implication from this result is that government should be prepared to combat high rate of inflation because of its negative impact on the welfare of the populace. The investors can take advantage of future low interest rate and stock price by planning to expand their businesses. Since stock market activities improves economic performance, increasing investment will lead to increase in demand and increase in profit. Since the exchange rate is predictable, the professionals will also take advantage of this to increase their profits

Determinants of Trade Flow in the Economic Community of Central African States (ECCAS): Does Governance Matter?

Subject and purpose of work: This study analyzes the determinants of intra-ECCAS trade, with special attention paid to the role of institutional quality from 1996 to 2021. Materials and methods: The study conducts descriptive analysis and utilizes a Negative Binomial Pseudo Maximum Likelihood to analyze the determinants of intra-ECCAS trade. Results: The results suggest that gross domestic product (GDP), population, time taken for export shipment in the exporting countries and the bilateral real exchange rate of the importing partner country enhance intra-ECCAS trade flow. On the other hand, distance, two trading partners being landlocked, time for importing countries and bilateral real exchange rate of the exporting partner discourage this. Furthermore, the findings reveal that institutions are vital to intra-ECCAS trade. Conclusions: T he key d rivers of intra-ECCAS t rade a re GDP, population, t ime t aken for export shipment in the exporting countries, bilateral real exchange rate of the importing partner country, and institutions’ quality measures

Determinants of Trade Flow in the Economic Community of Central African States (ECCAS): Does Governance Matter?

Subject and purpose of work: This study analyzes the determinants of intra-ECCAS trade, with special attention paid to the role of institutional quality from 1996 to 2021. Materials and methods: The study conducts descriptive analysis and utilizes a Negative Binomial Pseudo Maximum Likelihood to analyze the determinants of intra-ECCAS trade. Results: The results suggest that gross domestic product (GDP), population, time taken for export shipment in the exporting countries and the bilateral real exchange rate of the importing partner country enhance intra-ECCAS trade flow. On the other hand, distance, two trading partners being landlocked, time for importing countries and bilateral real exchange rate of the exporting partner discourage this. Furthermore, the findings reveal that institutions are vital to intra-ECCAS trade. Conclusions: T he key d rivers of intra-ECCAS t rade a re GDP, population, t ime t aken for export shipment in the exporting countries, bilateral real exchange rate of the importing partner country, and institutions’ quality measures