Financial Integration and Financial Development: Evidence from Sub-Saharan African (SSA) Countries

The study examined the effects of financial integration on financial development for 49 Sub-Saharan Africa (SSA) countries for the period 2002 to 2021. Five independent metrics of financial development and two financial integration measures were utilized to ensure robustness of the anticipated results. Using a dynamic panel GMM-SYS estimation technique, it was discovered that the impacts of financial integration on financial development in SSA are highly dependent on the proxies employed to capture these two variables of financial integration. Financial integration has a beneficial influence on private sector credit, domestic credit, liquid liabilities, and finance size, when proxied by the interest rate spread. However, this measure of financial integration limits the volume of financial activity of financial intermediaries as it’s negatively correlated. Similarly, when measured using gross private capital flows, financial integration has statistically positive effects on financial development as measured by liquid liabilities but has a negative impact on financial development as measured by finance activity and financial size in Sub-Saharan African nations. The general implication of these findings is that the influence of financial integration on financial development in SSA is complex. However, before reaching a firm conclusion about the relationship between these two variables, several transmission mechanisms by which former influences the latter, as well as their various proxies, must be considere

Dividend Policy, Liquidity and Firm Value of Consumer Goods Industry Companies in Nigeria

The focus of this study is to determine the effect of dividend policy and liquidity on firm value. The research was conducted on companies in the consumer goods industry sector on the Nigeria Exchange Group for the 2012-2021 period. The population used in conducting this study was obtained from the consumer goods industrial sector companies listed on the bourse of the Nigeria Exchange Group (NGX Group) which have a total of 25 companies. Purposive sampling technique was used and 17 companies were selected that met the condition of regular dividend payment. Panel least regression data analysis technique was used for the study. Secondary data used were obtained from audited financial statements of the sampled companies for the period and Nigerian Exchange Group factbook. The results showed that dividend policy, liquidity and market risk had positive significant relationship with firm value at 5.8198:0.000; 15:6395:0.000 and 1.2805:0.000 respectively indicating 1% significance level. Free cashflow had positive insignificant relationship with firm value while ownership concentration has negative but insignificant causal effect on firm value. R², the coefficient of determination of 0.8329 reflects that the model explanatory variables account for 83.29% of value of price to book value, the explained variable. It is recommended that adequate level of profitability should be a priority to enable payment of dividend. Liquidity position should be at the acceptable levels and market risk should not exceed tolerance limit

Effect of Dividend Policy on Share Price Movement of Selected Quoted Companies in Nigeria

Dividend Policy remains a contentious area of corporate finance with a school of thoughtindifferent and another in support. The two contending views under which other hypotheseswere premised are; on the popular dividend relevance and irrelevance theories. Dividendpolicy scholars argued that it expresses information content about future prospects andcashflow of the firm. Irrelevance proponents hinged their argument on the point that all that isnecessary is the investment policies and risk of an enterprise in maximizing shareholderswealth. The latter proponents advanced their theories in favour on capital and future gainsinpreference to immediate payment of cash in form of dividend. This study centered oneffectsof dividend policy on share price of selected quoted companies in Nigeria with dividendper-share, earnings per-share and profitability taken as endogenous variables. Thirteenquotedcompanies on the floor of the Nigeria Exchange (NGX Group) using randomsamplingwereused. Pooled OLS regression with fixed and random effects models were employedforestimation. The fixed effects model was preferred as the efficient estimator for the studyandthe results revealed that dividend per share has inverse and statistically insignificant effectswith share price, likewise; earnings per share. Profitability has positive but insignificanteffect on share price

The Dynamics of Monetary and Fiscal Policy as a Tool for Economic Growth: Evidence from Nigeria

Abstract The study investigated the dynamics of Nigeria's monetary and fiscal policies, focusing specifically on the effects on the growth of Nigerian economy. The fundamental objective is to examine the effect of monetary and fiscal policy in Nigerian economic growth. The paper employed the Engle-Granger and Johansen-Joselius method of co-integration in a VECM setting. The empirical results demonstrated that there exist a long-run linear relationship between the dependent variable and the explanatory variables, meaning that both monetary and fiscal policy contributed to the growth of Nigerian economy. Based on the above reason the paper, therefore recommended that both monetary and fiscal policy should have the same objectives at a time

The Intensity of Financial Repression in Nigeria

This paper focuses on financial repression in Nigeria and its intensity using data from the Central Bank of Nigeria Statistical Bulletin to construct the financial repression index for Nigeria by employing the summary measure of the Principal Component Analysis(PCA). Results indicated a preponderance of financial repression over the study period of 1986-2020 and provided a financial repression index at a measure of less than 30% over the study period. This measure is seen as far less than average measures of financial repression from extant cross-country literature on Nigeria’s financial repression index at the level 64.53% over the period of 1990-2009 and 39.08% average over the period of over 1970-1997. The study concludes the presence of financial repression in Nigeria at a magnitude that is reasonably lower than previously estimated from cross country studies in which Nigeria was sample

Can Non-Oil Exports boost Agriculture Sector Performance in Nigeria? A Tale for Oil Independency

The study examines the effect of non-oil export on the agricultural sector performance in Nigerian economy using empirical evidence and modern research analysis. The bulk of non- oil export of Nigeria comes from agriculture and pre-processed products. Hence, non-oil export from perspective of efficiency-seeking indicates that non-oil export always aim at taking advantage of poor-efficient production condition and boost the productive edge of resources. There is a general believe that non-oil exports commodities has nothing to do with sectoral growth in Nigeria, this role is therefore the major focus of this study. Modern econometric analysis is used to validate if there is any relationship between non-oil export and sectoral performance, we also conducted unit root test to detect the risk of non stationarity of any of the variables involve in the model specified. Having tested for unit root, the paper also considers cointegration test and a parsimonious result of the least square estimate is presented. Lastly, a causality analysis of the relevant variables was undertaken in order to verify the relevance of non-oil export on growth in Nigeria. Interestingly, non-oil export commodities fail to enhance growth of the economy in recent findings, while agriculture, openness and exports promote growth in both the short and long run in our dear country

Modelling the Determinants of Naira/US Dollar Currency Exchange Rates Using Principal Component Analysis (PCA) and Singular Value Decomposition (SVD)

In the literature, a large number of factors are mentioned as being responsible for the relative strength or weakness of a country’s currency with respect to the currencies of other nations. Many of these variables are usually highly correlated with each other leading to the twin problems of multicollinearity and redundancy in the explanatory variables.This study examines the main determinants of currency exchange rates, and applies Principal Components Analysis (PCA) and Singular Value Decomposition (SVD) to Naira/USD data regarding the factors responsible for the steady deterioration in the Naira/USD exchange rates over time. The aim is to rank the factors in order of importance and impact on the Naira/USD exchange rate in the Nigerian environment, as such ranking may not be of universal application in all countries. The study uses Machine Learning algorithms to achieve dimensionality reduction and thus address the problem of multicollinearity and high dimensionality. The study found that three principal components adequately explain more than seventy percent of the variance, thereby making it unnecessary to use more than three explanatory variables in similar studies predicting the evolution of currency exchange rates. In this study the number of explanatory variables was drastically reduced from twenty-one to just three, while solving the problem of multicollinearity

CONTRIBUTION OF SMALL AND MEDIUM SCALE ENTERPRISES TO ECONOMIC DEVELOPMENT OF NIGERIA

Nigeria’s economic challenges have been attributed to excessive reliance on crude oil and as a result of the government's concentration of large-scale industries at the expense of Small and Medium-sized Enterprises (SMEs). In this study, we investigate the effect of electricity power supply on the productivity of SMEs as well as to which these Small and Medium scale Enterprises SMEs contribute to the economic development of Nigeria. Secondary data were extracted from CBN Statistical Bulletins covering the period between 1997 and 2020. Multiple Econometric Method was used to analyse the data, and the results were tested at a 0.05 significance level. The findings from the analyses of the study showed that SMEs’ productivity (SMEP), employment generation by SMEs (EG), electricity power supply and credit available to SMEs have significant positive effects on the economic development of Nigeria. Based on the findings, it was recommended that the government should ensure that SMEs’ productivity is improved by ensuring adequate credit availability to SMEs at reasonable interest rates, adopting macroeconomic policies that will reduce the level of inflation rate, ensuring regular and affordable electricity power to SMEs by allowing state independent power generation and supply. We believe that improving the SME's operational base will provide the needed catalyst for Nigeria's economic growth and development

The Impact of Oil Price Fluctation on the Economic Growth of Nigeria

This study examined the impact of oil price changes on Nigeria's economic expansion. The aims of the study were to evaluate how oil price changes effect Nigeria's revenue generation and overall economic growth. Additionally, the impact of demand and supply market dynamics on Nigerian crude oil revenue generation was evaluated. Secondary data were gathered from CBN Statistical Bulletins and utilised for the study between 1997 and 2020. The Multiple Econometric Method was used to analyse the hypotheses, and a significance level of 0.5 was applied to the results. This research demonstrated that oil price changes have a significant impact on Nigeria's economic expansion. In addition, it was shown that the interest rate and inflation rate had a significant negative effect on Nigeria's economic growth. Based on the findings, it was established that the government should ensure that oil price changes are factored into the budget at manageable rates and implement macroeconomic policies that will reduce the level of inflation

NON-OIL EXPORT AND ITS EFFECTS ON ECONOMIC GROWTH IN NIGERIA (1981-2020)

Over the decade, Non-oil exports played a vital role in the growth of the Nigerian economy. Focusing on Nigeria's real economic growth, inflation, exchange rate and nonoil export, this study investigates the impact of non-oil exports on the economy of Nigeria using data from the years 1981 to 2020. The goal was to determine whether non-oil exports have an impact on Nigeria's real GDP. A model was developed to attain these goals, and the Autoregressive Distributed Lag (ARDL) Cointegration Technique was employed as the analysis approach. In addition to other tests, the variables in the study were submitted to a stability test, a bound test, and the Augmented Dickey-Fuller (ADF). The study demonstrates that, unlike other procedures, the ARDL Cointegration technique does not require pretests for unit roots. When dealing with variables that are integrated in various orders, I(0), I(1), or a mix of the two, the ARDL Cointegration technique is preferable and robust when there is a single long-run relationship between the underlying variables in a small sample size. The F-statistic (Wald test) detects the long-term relationship of the underlying variables. The ARDL results revealed, and the t-test of hypotheses examined, that non-oil exports, oil exports, and exchange rate have no effect on Nigerian economic growth and that there is a long-term link. According to the coefficient of determination, the dependent variable captures 79% of the independent factors. According to the report, for oil export and non-export to have an impact on Nigerian economic growth, a stable exchange rate and inflation must be monitored through regulations