Appraisal of the Central Bank of Nigeria’s 2012 Currency Restructuring Proposal

This paper examines the 2012 proposed currency restructuring in Nigeria, under which a new higher bill of N5,000 was to be introduced alongside the coining of the existing N20, N10 and N5 notes. The paper identifies the implications of the currency regime to include; increased portability, annual saving of about N7 billion from the cost of production, distribution and disposal of banknotes, enhanced quality and integrity of the banknotes, incorporation of a more effective feature for the visually challenged, and elimination of the payment of royalties on erstwhile patented security features. However, the implementation of the policy might exacerbate money laundering and corruption, increase in general public apathy for coin utilization, and  inflationary pressures due to ill-informed expectations and cost-push factors, making locally produced tradable goods less competitive, enhanced smuggling, and increased unemployment and crime rates. The paper identifies the challenges which militated against the policy to include; high illiteracy level, poor public enlightenment, and poor project management. It also reveals that relative currency stability is the major driver of dollarization and mere introduction of a higher denomination of a volatile currency would not stop the practice. The paper, therefore, recommends that the Central Bank of Nigeria (CBN) should put currency restructuring at bay until the Cash-less policy project permeates the entire economy. A root-cause analysis of the public apathy in the utilization of coin, massive enlightenment and re-orientation of the public (including labour unions) on the non-correlation of higher currency denomination with inflation or devaluation should be carried out by the CBN.  Finally, the apex bank should also ensure sound project management ideals are followed while embarking on new projects. Keywords: Currency Restructuring, Implications, Challenge

Accelerating Financial Inclusion for Sustainable Development in Nigeria

Financial exclusion constitutes a major sustainable development challenge in many developing countries such as Nigeria. This paper examines the financial inclusion efforts in Nigeria, the implications of strong financial inclusion for sustainable development, and the challenges militating against financial inclusion in Nigeria. The paper also discusses the roles of rural banking scheme, Nigeria Deposit Insurance Corporation, and various types of banks as well as the non-interest banking policy and alternative banking channels in financial inclusion. The paper suggests that a strong financial inclusion of the hitherto inadvertently financially excluded and the poor segments of the society would increase economic activities, employment, consumption, government expenditure as well as economic growth and sustainable development. It also identifies the challenges militating financial inclusion in Nigeria to include; low financial literacy, cumbersome banking documentation and minimum operating balance requirements, inadequate and uneven distribution of bank branches and alternative banking channels, low uptime and malfunctioning of e-channels, growing poverty incidence, and high unemployment rate, among others. The paper recommends the re-introduction of rural banking scheme, public enlightenment, minimization of banking documentation and minimum operating balance, increased deployment of alternative banking channels, and stiffer penalty against corruption, among others. A strict implementation of the suggested recommendations would accelerate financial inclusion and ensure sustainable development in Nigeria. Keywords: Financial inclusion, Financial exclusion, Sustainable Development, Nigeria DOI: 10.7176/RJFA/12-16-05 Publication date:August 31st 202

The Political Economy of the Postponement of Nigeria’s 2015 General Elections: Effects, Implications and Lessons

The credibility of Nigeria’s previous elections had been doubted, though the situation has been improving lately. This research article examines the effects and implications of Nigeria’s postponement of the 2015 general elections. An attempt is also made to identify and discuss the lessons learned from the shift in elections. The effects of elections postponement identified in the study include: protracted grounding of governance; nosedived economic activities; increased unemployment; negative effects on social and cultural activities; and heightened political tension; although it afforded the INEC a good opportunity to improve upon its preparations. Implications examined include erosion of the integrity of Nigerian Government; perception of the INEC as managing elections’ programme poorly; and reduction in future aids. The paper pinpointed some of the lessons learned from the elections’ postponement as: the need for timely provision of funds; professional management of elections; use of contingency and change management plans; and proper documentation of lessons learned. Finally, the research recommends the use of lessons learned as springboard for strengthening democracy in Nigeria. Keywords: Effects, Implications, Lessons, Elections’ Postponement, Political Economy, Nigeria

Tackling the Wicked Problem of Poverty in Nigeria: Strategies for State Governments

Poverty incidence, a wicked problem in Nigeria, has been a source of worry to major stakeholders, especially the government and the masses. Having practically taken over the powers of local governments, the state governments are next in rank in terms of closeness to the grassroots. The objectives of the paper are to examine the measurement and profile of poverty in Nigeria, identify the causes and consequences of poverty, and suggest some pragmatic poverty alleviation strategies for state governments in Nigeria. The paper identifies the causes of poverty to include underdevelopment, inequality, increasing unemployment, teeming population, corruption, mono-cultural economy, laziness and poor education system. It also pinpoints the spate of armed robbery, kidnapping for ransom, internet fraud, terrorism and other forms of fraudulent activities as consequences of poverty in Nigeria. The paper suggests poverty alleviation strategies which include: inclusive growth, human capital development, provision of basic social services, result-oriented integrated rural development, public works and sustainable livelihood. However, to achieve optimal results, the paper emphasizes a combination of these strategies, and recommends that state governments must: demonstrate political will, be gender-sensitive and ensure professional management of poverty alleviation schemes as goal-oriented programmes in order to fast-track sustainable development in Nigeria. Keywords: Poverty, Wicked Problem, Causes, Consequences, Strategies

Taking Local Business to Global Market: The Case for Nigerian Cassava Processing Industry

Nigeria remains the second largest economy in Africa and the 22nd largest in the world with Gross Domestic Product (GDP) of $1.105 trillion on an annual growth rate of 5% as at 2015. To maintain the position, Nigeria must accelerate her industrial productivity by building new links with the rest of the global economy. Considering the global event in recent times, Nigeria needs to diversify her economy from resource-based to a knowledge-based and innovation-driven one.  The cassava processing industry is one of the sectors in the Nigerian economy that can advance such competition.  Since the 1980s, Nigeria has remained the global leader in cassava production with an annual production of 45 million metric tonnes. However, the utilization of cassava has largely explored traditional technologies for processing of its roots into human food such as garri, fufu, and flour. Through the application of science, technology and innovation (STI), Nigeria’s cassava processing industry can create substantial new business opportunities that can prominently position Nigeria in the global market. This paper therefore examines some potential paths that are useful indicators of how Nigeria’s economic growth and social progress may unfold through the productivity of the industry.  The review concludes that cassava needs to be upgraded into primary industries such as starch, ethanol, chips, and flour in order to provide a strong industrial base for further diversification of the Nigerian economy. The paper recommends, among others, that government should develop a comprehensive programme that involves agribusiness strengthening, external collaborations, promotions as well as provision of technical and commercial assistance, such as export logistics with a view to fast-tracking and sustaining competitiveness of the cassava industry in the global market. Key words: Cassava Processing, Competition, Global Market, Technologies, Innovation

Implications of Nationwide Implementation of Cash-less Policy for the Nigerian Economy: Challenges and Prospects

Prior to the introduction of the cash-less policy in Nigeria, a lot of business transactions had been carried out on “cash and carry’’ basis thereby  culminating in high cash management cost for the  Central Bank of Nigeria. This paper discusses the implications of cash-less policy for Nigerian economy, its challenges and prospects.  The paper identifies challenges militating against the seamless implementation of the cash-less policy to include: epileptic power supply, high downtime,  high illiteracy level especially in the informal sector, inadequate and import-dependent supply of the alternative channels’ hardware, dearth of information and communications technology and e-business professionals, among others. The paper opines that the scalability of the implementation of the policy, government political will and their attendant benefits have given the system some bright prospects. Finally, the paper recommends speedy energy sector reforms, share infrastructural services, continual enlightenment of stakeholders and faster turnaround time for conflict resolution, among others, in order to enhance the public buy-in and adoption of the cash-less policy with a view to fast-tracking Nigeria’s march towards sustainable development. Keywords: Cash-less Policy, Nigerian Economy, Implications, Challenges, Prospects.

DISAGGREGATED EXPORTS AND ECONOMIC GROWTH IN NIGERIA: AN AUTOREGRESSIVE DISTRIBUTED LAG APPROACH

Nigeria’s dwindling external reserves have constituted major threats to federally-collected revenue and citizens’ welfare. This paper examines the influence of disaggregated exports on economic growth in Nigeria, using the Autoregressive Distributed Lag (ARDL) approach. Adopting a longitudinal research design, and secondary data obtained from the Central Bank of Nigeria Statistical Bulletin (2015) as well as from the World Bank’s World Development Indicators, the paper utilizes annual time series data from 1981 – 2014. The paper tests the time series properties of the variables in order to confirm that no variable is I(2) before adopting the ARDL model. Economic growth is the dependent variable, which is proxied by Real Gross Domestic Product (RGDP) while results are tested at 5% level of significance. The paper establishes a long run relationship between RGDP and its selected determinants such as oil exports, non-oil exports, growth in labour force, capital formation, oil imports and non-oil imports while no short run causality is established among the variables. The restricted error correction model shows a low speed of convergence of output to its long run equilibrium as about 38.66 percent of the disequilibrium in the system is corrected within a year. The paper examines the long run elasticities and finds that oil exports do not significantly enhance economic growth while non-oil exports significantly hurt economic growth in Nigeria. Overall, the findings of this study cannot provide strong evidence to support the export-led hypothesis. Finally, the paper recommends, among others, that government should strengthen export-oriented policies; increase local refining capacity so that oil imports can be halted or minimized; enhance value-added non-oil exports; and adopt import-substitution strategy on consumer goods as these constitute the sine qua non for accelerating economic growth in Nigeria. Keywords: Disaggregated Exports, Economic Growth, Unit Roots, ARDL

Influence of Exchange Rate Movements on Economic Growth in Nigeria

Nigeria’s dwindling external reserves and exchange rate fluctuations have been major sources of concern to major stakeholders in recent times. Adopting a longitudinal research design, this study examines the influence of exchange rate movements on economic growth in Nigeria, using annual time series data from 1981 – 2014 obtained from the Central Bank of Nigeria Statistical Bulletins. Economic growth is the dependent variable proxied by Real Gross Domestic Product (RGDP) while the explanatory variables are nominal exchange rate, inflation rate as well as growth in money supply. The unit root test indicates that all variables are I(1) while Johansen cointegration test reveals a long run relationship between economic growth and the explanatory variables. The Error Correction Model indicates a negative short run causality running from nominal exchange rate to RGDP, and from growth in money supply to RGDP in Nigeria. The error correction term indicates that departure from long run equilibrium gets corrected at the rate 93.55 percent. The paper also reveals that long run Granger causality runs from growth in money supply to RGDP, and from growth in money supply to inflation rate. Also, long run Granger causality runs from exchange rate to inflation. All results are tested at 5% level of significance.  The paper, therefore, recommends that Government should design export-oriented policies that would accelerate accretion to foreign reserves in order to reverse or, at least, minimize exchange rate depreciation. Finally, the Central Bank of Nigeria should ensure sound exchange rate, and inflation rate management with a view to promoting economic growth in Nigeria. Keywords: Exchange Rate, Economic Growth, Cointegration, Granger Causality, Error Correction Model

Analysis of the Bank Credit, Economic Growth Nexus in Nigeria

In spite of Nigeria’s recent ranking as one of the fastest growing economies in world, it is paradoxical that the rapid growth has not impacted on the welfare of the citizens and residents as poverty incidence has persistently been on the rise. Bank credit has been widely recognized as a veritable means of lifting people out of the abyss of poverty. This study was designed to appraise the bank credit, economic growth nexus in Nigeria, using annual time series data from 1970 to 2011. The paper specifically attempts to determine the flow of causality between private sector credit and economic growth. The research employed unit root, and granger causality tests. The study revealed that there exist a unilateral flow of causality which runs from bank credit to economic growth at 5% level of significance both in the short and long run.  The paper therefore recommends that the Central Bank of Nigeria  should prescribe and enforce rules on sectoral allocation of credit between the private and public sectors with a tilt towards the former, leverage credit disbursement as a tool for driving economic growth, and ensure that credit growth does not compromise credit quality. Keywords: Bank Credit, Economic Growth, Granger Causality, Unit Root

Home-Grown Recipe for Fast-Tracking Sustainable Development in Nigeria

In spite of Nigeria’s rich human and natural resources endowment, endemic corruption has constituted a serious impediment to sustainable development. Nigeria was ranked 148 out of 180 countries in 2017 by the Transparency International’s Corruption Perceptions Index, which shows that the country is very corrupt. The application of false paradigm model of faulty and inappropriate advice provided by well-meaning but often uninformed and biased international expert advisers has also exacerbated Nigeria’s underdevelopment. This paper reviews some theories of growth and development and identifies corruption as a bane of sustainable development in Nigeria. It also postulates a home-grown recipe for accelerating sustainable development in Nigeria to include: forward integration of primary industries and backward integration of manufacturing industries, economic diversification, zero tolerance for and stiffer penalty against corruption at the household, firm and government levels. Therefore, a strict execution of the above would go a long way in fast-tracking sustainable development in Nigeria and thereby make the country one of the most desirable destinations in the world. Keywords: Corruption, Recipe, Growth and development theories, Sustainable development, Nigeria DOI: 10.7176/JESD/12-16-03 Publication date:August 31st 202