Monetary Policy Committee and Monetary Policy Conduct in Nigeria

The study provides an incisive but preliminary investigation into the activities of the monetary policy committee of the central bank of Nigeria and the implications for monetary policy, using the standard deviation measure of volatility and the ordinary least square method. The findings show that the ‘internal’ members and majority of the ‘external’ members have different preferences as shown in the voting patterns. Also, there has been reduction in inflation, money and stock markets volatilities since the operations of the committee became more visible. Furthermore, there is no structural break in both the money and stock markets in the period when the central bank started releasing the personal statements and voting pattern of the committee members. The policy implication of these results is that the transparency with which the monetary policy committee has operated since 2011 has boosted policy credibility due to the reduction in markets volatility. Nevertheless, there is need for the individual committee members to be more visible to the public through different platforms as this will further improve the central bank’s communications strategy. Keywords: Monetary policy committee decisions, voting, volatility JEL Classification: D71, D78, E5

Estimating Legislative Effectiveness in Nigeria

The study estimates the effectiveness of legislators in Nigeria using the Legislative Effectiveness Score (LES) approach proposed by Volden and Wiseman. The study deviates from the often controversial issue of astronomical remuneration of the legislators’- to assessment of the effectiveness and efficiency of the individual legislators. The findings show that on average, legislators with experience sponsored approximately 2.58 bills per head in the reviewed period, while those without legislative experience sponsored approximately 2.32 bills per head. This supports the views in the literature that longer serving members of the legislature tend to be more effective. Also, the LES ranking showed that out of the top 10 senators, eight were of the ruling Peoples’ Democratic Party (PDP) while two were of the now defunct All Nigeria’s Peoples Party. This also supports the unanimous findings in the literature that members of the dominant party tend to be more successful than members of the minority or opposition parties. With respect to individual senators effectiveness, Senator Victor Ndoma Egba, with legislative experience, and of the ruling PDP, was the most effective senator in the period reviewed. Keywords: Legislature, Legislative Effectiveness, Bill, Scor

An Empirical Trade Intensity Analysis of South Africa - BRIC Economic Relations

The study broadly focused on examining the trade and investment relationship between South Africa and the BRIC, using both descriptive and vector autoregressive estimation approaches. Specifically, the key objective is to investigate the impact of trade shocks between South Africa and the individual countries of the BRIC bloc. The findings illustrate that South Africa’s trade was more intense with India in the review period followed by trade with China. The impulse-response outcome showed that South Africa’s GDP reverts faster to equilibrium in the event of a shock in exports to and imports from Brazil. Also, when there is a shock to GDP, South Africa’s imports from Brazil reverts faster to equilibrium. The results of the variance decomposition indicate that inflation accounted for the highest variation in South Africa’s exports to and imports from both Brazil and China. Similarly, inflation explained the greatest variation in the GDP, while the greatest variation in the domestic inflation rate is explained by its own shock. JEL Codes: C32; C51; F5; F33 Keywords: Trade flows; Impulse response; Variance decomposition; BRIC; South Afric

The BRICS and Nigeria’s Economic Performance: A Trade Intensity Analysis

The study examined Nigeria’s trading relationship with the individual BRICS (Brazil, Russia, India, China and South Africa) by applying a combination of descriptive and econometric techniques. The findings show that Nigeria’s trade intensity is highest with Brazil followed by trade with India and then South Africa. The outcome of the vector autoregressive analysis indicated that Nigeria’s gross domestic product (GDP) reverts faster to equilibrium when there is a shock to exports to and imports from Brazil, as against Nigeria exports to and imports from the other BRICS countries. A key policy implication of the results is that of all the BRICS countries, Brazil appears to have the most potential in terms of improving Nigeria’s trade position

Government Spending and Economic Growth: A Revisit of the Nigerian Experience

Given the continued debate surrounding the effectiveness and efficiency of government spending in Nigeria, this study adopts a modified Autoregressive Distributed Lag Model in order to investigate the impact of federal government spending on economic growth between 1961 and 2010. The main findings are that government total expenditure and recurrent expenditure have insignificant effect on real GDP growth irrespective of the lag period. However, capital expenditure has significant positive effect in the second lagged period. Nevertheless, the long run multiplier of government spending whether total expenditure, capital expenditure or recurrent expenditure, is negative. This means that in the long run real GDP growth is slowed by the negative government expenditure multiplier. The policy implication of the findings is that the quality and efficiency of government spending remains an issue in Nigeria as theory posits that the multiplier effect of government spending should be positive even if it is, as usual, lower than private sector investment multiplier

Impact of financial development on manufacturing output: The Nigerian evidence

This study examined the influence of financial deepening on manufacturing output in Nigeria. Using the Vector Autoregression (VAR) based Johansen cointegration technique and an Ordinary Least Square (OLS) estimator on annual data spanning 1970 to 2010, we found insignificant coefficients for credit to the manufacturing sector, banking efficiency and the non-oil trade balance. This suggests a fundamental disconnect between the real and financial sectors of the Nigerian economy. Policymakers should therefore innovate with productivity enhancing reforms which are better tailored to the needs of the manufacturing sector. This should work to boost growth prospects for the aggregate economy

Re-appraising the effect of the banking sector on the Nigerian economy

The banking sector remains pivotal to Nigeria’s quest for sustainable economic growth and development. Using quarterly data between 2001 and 2018, and applying the Johansen Cointegration and Vector Autoregression techniques, the evidence shows that long-run equilibrium relationship exist among Gross Domestic Product (GDP), Credit to the Economy (CRD), All Share Index (ASI) and the Monetary Policy Rate (MPR). The response of GDP to shock to CRD was initially flat but turned negative for some periods, before becoming positive. On the contrary, the response of GDP to shock to the ASI was initially positive, and then became negative from the third period, and remained so for a longer period when compared with the response of GDP to CRD. It however turned positive at the final stage. This evidence supports the view that economic growth can be achieved faster through the banking sector when compared with the stock market which is an avenue for sourcing long-term funds. The response of GDP to shock to the MPR was also flat originally and then became negative for the rest of the period, confirming the interest rate stance of the Central Bank of Nigeria which has been more of a restrictive posture. The variance decomposition analysis indicates that GDP accounts largely for its own variation, meaning that it is highly endogenous

The determinants of current account balance in an oil-rich exporting country: the case of Nigeria

This paper examines the determinants of current accounts balance in Nigeria with emphasis on oil- related variables using the Johansen–Julius vector error correction estimation approach, the impulse response function and the variance decomposition analysis. The results showed that oil price, oil balance and oil revenue are positively related with the current account, with only oil wealth having a significant negative impact in the long run. We find that the impact of oil price on the current balance is only significant in the short run. The variance decomposition analysis indicated that the variance in the current account is better explained by shocks to itself followed by shocks to oil price, oil balance and fiscal balanc

The BRICS and Nigeria’s economic performance: A trade intensity analysis

The study examined Nigeria’s trading relationship with the individual BRICS (Brazil, Russia, India, China and South Africa) by applying a combination of descriptive and econometric techniques. The findings show that Nigeria’s trade intensity is highest with Brazil followed by trade with India and then South Africa. The outcome of the vector autoregressive analysis indicated that Nigeria’s gross domestic product (GDP) reverts faster to equilibrium when there is a shock to exports to and imports from Brazil, as against Nigeria exports to and imports from the other BRICS countries. A key policy implication of the results is that of all the BRICS countries, Brazil appears to have the most potential in terms of improving Nigeria’s trade position