Challenges of Population Dynamics in Nigeria: Implications for Household’s Portfolio Choices

This research study attempts to quantify and examine how changes in Population dynamics affect household portfolio choices (expenditure on food, monetary transactions, goods and services and non-cash expenditure) in Nigeria given the fact that Nigeria is going through a demographic transition. Previous efforts to assess impacts of Population growth have ignored the household expenditure responses, which has been far from being definitive on the transmission net effects on household portfolio choices. This study focuses on Nigeria with the aim of overcoming these defects and obtaining reliable information. The study establishes a link between demographic variables and household expenditure components using the Vector Error Correction Methodology. Next, the estimated equations are used to project the pattern of the different components of expenditure income based on three population scenarios generated from different assumptions on changes in fertility. Nonetheless, several counterfactual simulations were examined to enhance our understanding of the effects of Population dynamics on contingent choices. The results suggest that population dynamics in Nigeria can produce significant effects on the economy via the expenditure profiles of households. The results also suggest that other factors such as real per capita income, ratio of other expenditure categories to total expenditure influence growth of household expenditure components. The results of the study have some important implications for policy: • Pursuit of prudent macroeconomic policy has significant payoffs, as it avoids further constraints on household’s provision of essential social services, such as health services; • The rate of urbanization in Nigeria affects many categories of household expenditure, and therefore government policy of directing policies that would improve household expenditure on monetary transactions is likely to have significant payoffs in terms of easing the rate of pressure on households. • The results show how changes in age structure could be extremely relevant to the process of economic growth. Finally, there must be a sustainable momentum to boost monetary transactions among the people as a means of revitalizing the weakened social pillar. Doing so calls for a population rights approach to development planning that places people at the centre of developmental efforts. This will help in achieving the objectives envisaged for the social charter in the “NEEDS” framework. The determination for an appropriate mix of policies for managing Nigeria’s development requires prescriptions that recognize the structural linkages between the sectors. Such prescriptions must uniquely isolate, define and determine the nature and magnitude of the change variables that drive the development process. The necessity of such prescriptions should form the building blocks of national development planning and resource management. This entails reconciling planning with implementation and carrying out regular analysis of the challenges of population dynamics that underpins the NEEDS programme.

HOW USEFUL IS CONTINGENT VALUATION OF THE ENVIRONMENT TO WATER SERVICES? EVIDENCE FROM SOUTH EAST, NIGERIA

Contingent Valuation Methods (CVM) Willingness To Pay (WTP) Tobit (censored) model Quasi-deregulation

Efficiency of Capital-Labor in Nigeria’s Mining Sector: A Cobb-Douglas Framework

The productivity in the Nigeria’s mining sector presents significance challenges, especially in view of its prospect in diversifying the national economy. The need to uncover the efficiency by way of estimating two major production functions (i.e. capital and labor) cannot be minimized. However, this paper uses econometric technique to estimates the Cobb-Douglas production function of mining sector between 1980 and 2011 periods in Nigeria. To avoid a spurious series, unit root test was conducted based on Augmented Dickey-Fuller (ADF) to test for the stationarity or otherwise of the variables in the model. The outcome reveals that the substitution parameters α and β (substitution parameters for capital and labor) confirms the a priori expectation that the pair of α and β are positive values. Despite labor is the most significant factor of production, the study also found that other inputs such as innovations and technology are positively significant in this period of modern mining production processes in view of the global economic outlook. The study amongst others recommends strong political will of government, transparency and accountability to drive efficient and effective mining sector reform, increased capital investment in innovations, technology, and raw materials

Sustainable Development in Developing Countries: Case Studies of Sustainable Consumption and Production in South Africa and India

The pursuit of development has had a major impact on the environment and on existing social structures. During the 1950s and 1960s, most nations were preoccupied with economic growth and energy consumption, which led to social and environmental issues being overlooked. Thus, traditional societies have been devastated and extreme environmental damage occurring such as pollution and inadequate water supply, transportation and sewer infrastructure problems amongst others. If environmental damage remains unchecked, the achievements of development and even essential ecosystems would be undermined. This paper reviewed the link between growth trends and sustainable development in Sub-Saharan Africa. Thereafter, the impact of environmental degradation was discussed including strategies for sustainable energy production and consumption. These were based on evidence from South Africa and India and provided the benchmark for discussing ways in which energy production and consumption can take place sustainably. The paper notes that in developing and implementing strategies, emerging countries do not necessarily have to be western in their sustainable development policies. Rather, each country has to have sustainable development policies that are peculiar to its own circumstance. The paper recommends community participation and accountability of institutions as necessary for ensuring that social development is integrated into the economic and environmental elements of sustainable development

A Review of the Macroeconomic Policy Frameworks adopted by the BRICS countries (2000-2015)

Recent development in the practice of macroeconomic policy has increased the importance of monetary and fiscal policy. Monetary policy within BRICS countries has shifted towards the setting of interest rates as the key monetary instrument, along with the adoption of inflation targets as key monetary policy objectives. It is well accepted that there is no one set of macroeconomic policies that guarantees sustained growth and development in the economy. However, the BRICS countries have been following a similar trend with regard to the exchange rate policy. This is shown by the fact that the BRICS countries have moved away from using a pegged exchange rate regime towards a managed floating exchange rate regime which is in contrast with the recommendations of the Washington Consensus. On the fiscal side, the BRICS countries agreed to spend only what is necessary in order to avoid the ballooning local government debt. Summarily, the BRICS countries have performed well economically and socially although there are still some room for improvement. However, there are still other BRICS members who have government debt that are well above half of their Gross Domestic Product. Alignment of policy regimes would strengthen the macroeconomic base of the BRICS. It is recommended that all BRICS members need prioritise inclusive governance that would checkmate social ills such as poverty, inequality and unemployment, while promoting social inclusion

Public sector spending in Nigeria: implications for poverty, demographic changes and millennium development goals target

Philosophiae Doctor - PhDOver the last two decades, budgetary allocations to both the Health and Education sectors have been on the increase in Nigeria, while a counter-factual feedback on its effects for various economic groups and distributional effect for different population households has not been defined and well known. The resultant effect has been gross inefficiency and sub-optimality in terms of observed outcomes of the fiscal framework. In-addition, there have been a continuous quest by the citizenry for increased allocations to these sectors because of its supposed impact on the poverty index and standard of living. Although this is a compelling reason, but what is worrisome and equally troubling, is that the increasing incidence of poverty and expanding inequality in the Nigerian society have not mitigated, despite the scaling up of funding on the social sectors. Furthermore, the current level of socioeconomic development in Nigeria is not in tandem with the distributive outcome targets set by the 2004 reforms. Thus, understanding the current structure of poverty in Nigeria as well as beneficiaries of public sector spending provides a sound basis for tackling inequality and redesigning the current pro-poor frameworks. However, our analysis is focused on the distributional spread of beneficiaries from services and the counterfactual reciprocity of expenditure benefits rather than measuring the exact value to recipients of government-sponsored services. Our research methodology used the 2004 Nigerian Living Standard Survey; 2010 Harmonized Nigerian Living Standard Survey; Recent Cros-sectional data (2014) in South East Nigeria and secondary sources. Econometric methods (Error Correction Method); Marginal Odds estimation techniques, Concentration Curves and Ordered Logistic Regression were used for our analysis. Statistical and Econometric Software’s (E-Views; SPSS; DAD and STATA) were used for estimations. Econometric results showed misalignments between population dynamics and public sector expenditure on education, health and economic services. The government consumption expenditure was not sensitive to demographic changes. The derived adjustment coefficients of -1.38, -1.51 and 0.51 respectively, for education, health and economic services indicate huge gaps in terms of what optimal spending should have been, giving the population dynamics. Our benefit incidence analysis indicates that substantive gains have been made at the primary education and health care level, at the state level for SE Nigeria but there is a gross misapplication of funds at the secondary and tertiary levels of both education and health sectors. Results show that the state governments’ is subsidizing the rich at the levels of both secondary and tertiary for education and health care. In addition, country wide results indicate that apart from public primary education and health care for urban residents, no other level of social service was absolutely progressive in general terms, by gender or by location while the tertiary level of both services were regressive as shown by the 2010 survey results, in comparism to the 2004 survey results. Using the Ordered Logistic Regression, our result inclines to the lifecycle hypothesis which maintains that poverty oscillates depending on the age. At a younger age, it tends to be on the high side and decreases during the middle ages and increases with age. Our results discards the feminization of poverty general framework that women or female headed households are more prone to poverty due principally to low education and lack of opportunity to own assets such as land amongst others. This wasn’t the case for the South East Region of Nigeria. Estimates indicate that education status, health status and access to health facilities affected the category of welfare of head of households and invariable, the entire household. In general, our analysis shows misalignment of social expenditure for various population groups, both at the federal and state levels; making doubtful the realization of basic MDGs. Nigeria has to combine growth policies and assuring that demographics count, with the poor fully participating in economic development. Also, the need for a refocusing in resource allocation taking into cognizance gender dimensions cannot be overemphasized. A general re-allocation of spending going to females and the poorer households would lead to improvement in gender equality and health status of women and children. Expediting actions towards qualitative education will lead directly to an acceleration of many of the other MDGs, especially those focusing on the reduction of poverty and inequality. To attain MDG targets (post 2015) within a shorter period of time, there is the need to improve the quality of social infrastructure and services. Furthermore, research should be focused on improving knowledge and understanding of what policies, technologies and investments matter for sustained growth in the country. This will create the much needed multiplier effect on other aggregates. The degree to which the poor participate in the growth process and share in its proceeds matter; both in the pace and pattern of growth. It is therefore important to have categorization of the population into economic groups when formulating a developmental framework for poverty reduction programmes. The study recommends sequencing of interventions, strengthening of institutions and other several interrelated areas to attain effectiveness of public sector spending

Impact of Public Expenditure on Climate Change in Nigeria: Lessons from South Africa

This paper examines the role of public expenditure in enhancing climate change adaptation and mitigation in Nigeria. It examines the trend of carbon dioxide (CO2) in Nigeria alongside those of South Africa and Sub Saharan Africa and investigates the statistical relationship between public expenditure and climate change in Nigeria. The paper hinges on the Climate Public Expenditure and Institutional framework of the Oversee Development Institute (ODI), which argues that climate change, has fiscal implications and can be addressed using national plans and annual budgets. Time series data were then collected for emission, public expenditure, human development index and economic growth from the World Bank and the Central Bank of Nigeria for 1970-2008, while trend analysis and lag regression model were used for data analysis. It was found that public expenditure towards economic services could be used to enhance Nigeria’s climate change mitigation and adaptation strategies. Though economic growth and human development index were found to be positively related to emission, results imply that economic growth in Nigeria is not pursued in a sustainable manner that accounts for the future generation. The paper recommends that economic growth that is driven by investment in renewable energy, developing human capacity to adapt to climate change and coordinating public expenditure to economic and community services to develop rural communities and vulnerable sectors like agriculture, would be useful for addressing climate change in Nigeria and ensuring sustainable development. A lesson Nigeria can learn from climate change mitigation and adaptation measures in South Africa is to identify and prioritize short term and medium term adaptation interventions to be addressed in sector plans such as water, agriculture and forestry, health, biodiversity and human settlements

A Review of Value Added in Nigeria’s Pre and Post–SAP Agricultural Sector: Background and Issues

In spite of the growing importance of oil, Nigeria has remained essentially an agrarian economy, with agriculture still significantly contributing to its Gross Domestic Product. However, the potentials of the agricultural sector to contribute to economic development in Nigeria have varied widely in the last two decades. This variation appears to be correlated to the nature of the political and economic regimes that exists. There were indications of some moderate output increase following the introduction of SAP. But, it is not yet certain whether the extent of deregulation policy currently being pursued by the Government and the preliminary outcome has elicited the desired response. One of the indications of the adverse development is the diversion of scarce foreign exchange from financing capital and intermediate imports to paying for food imports. Successive governments have experimented with various options in the promotion of agro-based industries, import substitution, promotion of specific sectors and specific areas. The outcome is an imbalance growth of various sub-sectors in the sector, poor capacity utilization, eroded competitiveness of local manufacturers and uneven playing field within the country. This paper basically reviews and analyzes the components of Nigeria’s agricultural sector, its contributions to economic development, and strategies adopted within the sector before and during the Structural Adjustment Program. It recommends that providing the right policy framework/enabling environment and incentives for private sector investment in the sector enshrined in the new economic blue print‘Transformation Agenda’ could be a viable option for revitalizing the sector

Macroeconomic Theory and Unemployment: A Comparison between the Keynesian and New Classical Model

Objectives: Both the New Classical and Keynesians models ignore involuntary unemployment, which is an effect of labour supply. Unemployment has been a cause for concern in the political economy since its inception; furthermore, it is seen as a universal problem. Thus, a pertinent question arises; Are the theoretical constructs of unemployment the same for both schools of thought? This paper investigates and discusses the implications of the two schools of thought in relation to the above-mentioned aspect. Prior Work: Gaps in literature suggest that existing theories of unemployment and the macroeconomic theory are based on problematic assumptions; which do not allow for a seamless policy framework. This has resulted in conflicting and contrasting dimensions between the two schools of thought. Approach: The paper adopted a qualitative approach, using content review method. This involves the review of various journal articles and publications. To compare the main difference between the Keynesian School and the New Classical School, we focused on macroeconomic Equilibrium; Monetary policy Effects of Unemployment; Philips Curve and Supply of Labour. Results: Analysis suggests that a near consensus is that there is no answer to unemployment conundrum for developing countries without them increasing their rate of capital accumulation, which must be at the same level with the growth of labour supply. The New Classical model posits that an efficient outcome is a consequence of free markets, which is self-regulating. They assume that in the long-run, aggregate supply curve is inelastic; therefore, any shift from full employment will only be transitory. However, Keynesians contend that the economy can be below full capacity for a significant time because of market imperfections. Thus, they advocate a greater role for expansionary fiscal policy to overcome recession. Implications Value: The issues discussed in the paper provide a template that could assist policymakers in improving policies that aim to reduce unemployment

Medium Term Expenditure and Fiscal Management in Nigeria: A Review of the (2005-2008) Framework

The Medium Term Expenditure Framework (MTEF) provides the link between policy priorities and the budget. Given that in developing countries in general, and in Nigeria in particular, there is a disconnection between planning, policy and the budget, the MTEF has increasingly been regarded as central to public expenditure reforms. The objectives of this paper are to review the MTEF and budget performance in Nigeria for the period 2005-2008, and identify the challenges undermining the effective operation of the budgetary processes. The paper gathered that the MTEF is the bridge between the national development plan, its underlying policies and the annual budget. Analysis of available data on budget performance during the review period shows that public finance in Nigeria have not been operated within the specifications of the MTEF and the budget, and the priorities expressed in the budget are not always in sync with national objective plans. Some of the identified challenges to effective public expenditure management in Nigeria include lack of citizen’s participation in the process, the bureaucratic and inefficient nature of the civil service, large scale corruption, lack of proper coordination between the national development plan and budget, lack of adequate reforms in other key budget areas, such as execution, monitoring and reporting, lack of political commitment, and lack of adequate coordination between the national and sub-national governments