economic growth

Evaluation of The Nexus Between Financial Inclusion and Economic Growth in Nigeria (1980-2020) (Published)

The focus of financial inclusion is the easy access of financial services to the populace to tackle poverty, improve living standard and address the general welfare of the people for the purpose of enhancing economic growth. This paper examines how financial inclusion relates with economic growth in Nigeria. Data was obtained from the bulletins of the Central Bank of Nigeria covering the period 1981 to 2020. Statistical analysis involves the use of descriptive statistics, Johansen Co-Integration Test, Phillips-Perron Unit Root Test, Pairwise Granger Causality and Error Correction Model.  To estimate the hypotheses formulated in alignment with the set objectives., the Error Correction Model was used. Economic growth, the dependent variable, was proxied by Gross Domestic Product, while total bank deposit and total credit disbursement constitute what was used to proxy the independent variable financial inclusion. The Error Correction Model result shows that there was a positive and statistically significant relationship between total bank deposit and gross domestic product. Total credit disbursement has a negative and an insignificant relationship with gross domestic product. The result from the study validates the finance led growth hypothesis and established that finance is one of the factors that causes economic growth in Nigeria. The consequence of this findings is that policy makers should pay more attention on long run financial policies that can enhance effectiveness of the financial sector in promoting growth. In addition, the CBN should focus on reduction of interest rate of banks in other to increase financial intermediation.

Keywords: Financial Inclusion, Financial exclusion, Loan, economic growth, total bank deposit

Effect of Financial Sector Lending Management on Economic Growth in Nigeria (Published)

This study investigates the effect of bank lending management on economic growth in Nigeria for the period 1985-2018. The data for the study were obtained from the Central Bank of Nigeria Bulletins, World Development Indicator and National Bureau of Statistics. The variables for the study include Gross Domestic Product, Deposit Interest Rate, Lending Interest Rate, Bank Asset Quality and Deposit Multiplier. Data for the study was analyzed using Descriptive Statistics, Ordinary Least Square method (OLS) and Multiple Regression Analysis. The result of short and long run regression revealed a negative impact of bank lending management on economic growth. The F-statistic (6.67) was also used to test explanatory power of the model with the corresponding probability value of (0.0007) which is statistically significant at 5%, suggesting that the explanatory variables have joint and significant effect on the economic growth of Nigeria. It is recommended that the regulatory authority set up a regulatory framework that will enhance the capacity of deposit money banks in Nigeria to lend to real sector of the economy at a very low interest rate and attract massive deposit by investors through robust deposit interest rate.

Keywords: Financial Sector, Lending, Management, economic growth

Impact of Tax Revenue on Economic Development in Nigeria (1997-2018) (Published)

The main objective of the study is to ascertain the influence of tax revenue on economic development of Nigeria. The specific objectives are; to determine the influence of petroleum profit tax, company income tax and value added tax on economic development proxy by human development index (HDI). Annual time series data, from CBN and FIRS from 1997 to 2018 was used. The study used regression analysis. The result showed that petroleum profit tax and company income tax have significant effect on economic development while value added tax does not significantly influence economic development. The implication of the finding is that the higher the amount of tax revenue generated, the higher the level of economic development experienced by the economy. This implies that taxes that have positive effect on economic development are direct taxes, thus direct taxes exert more significant influence on economic development of Nigeria than indirect taxes. This anomaly was attributed to dysfunctional ties in tax system, loopholes in tax law and inefficient tax administration. The lower the amount of revenue generated from tax the lower the quality of development to be witnessed. Government will generate higher revenue if they strengthen the legal and regulatory framework in order to control tax evasion and tax avoidance by taxpayers, improve on the system of tax administration, .The paper therefore recommended that tax policy makers such as federal inland revenue services and other tax regulatory bodies should strengthen their regulation on tax compliance mostly on tax that are direct based to curb tax evasion and tax avoidance by tax payers, adopt strategies to improve system of tax administration, by training and re- training of tax administrators through seminars and conferences to be abreast of modern trend in tax administration in order to generate more income for development.

Keywords: Gross Domestic Product, Tax Revenue, Taxation, direct and indirect tax, economic growth

Cashless Policy and the Performance of Deposit Money Banks in Nigeria (Published)

The main objective of the study is to investigate the effect of cashless policy on the performance of deposit money banks in Nigeria (2009-2018). The specific objectives are to: Investigate the effect of automated teller machine, examine the effect of point of sale, assess the effect of mobile banking, and to examine the effect of internet banking respectively on the performance of deposit money banks in Nigeria. We employed Econometric techniques involving Descriptive Statistics, Augmented Dicker Fuller and Philip Perron Tests for Unit Roots and the Autoregressive Distributed Lags (ARDL) for cointegration and coefficient analysis. The result of the study indicates that Automated Teller Machine (ATM) and Internet Banking each has a positive and significant effect on return on equity (ROE). Point of Sale (POS) has a positive but insignificant effect on return on equity, while Mobile Banking (MB has a negative and statistically significant effect on ROE, The study thus concludes that cashless policy has positively affected the performance of money deposit banks in Nigeria. The study recommends that government should provide uninterrupted power supply and adequate communication link while shortfalls should be covered by banks through back-up arrangement to power standby generator in case of power outage.

Keywords: Automated Teller Machine, Internet Banking, Nigeria, economic growth, mobile banking, point of sale

Relevance of Tax Revenue and Economic Growth in Nigeria (2008-2018) (Published)

This study aims at investigating the relevance of tax revenue in driving economic growth in emerging market economy context. . Using data extracted from central bank of Nigeria statistical bulletin for various years and auto-regression estimation model, our study documents the existence of significant and positive relationship between petroleum profit taxes (PPT), Company Income Tax (CIT) on economic growth in Nigeria. Our findings further reveal that Value Added Tax (VAT) and Custom –excise duty (CED) exert negative influence on economic growth. However, the study provide evidence that VAT and CED  are insignificant in determining the economic growth in emerging market economy context with special interest in Nigeria This study provide further evidence that the higher the amount of tax revenue generated, the higher the level of economic growth   in the economy. There is a recommendation therefore that strong institutional reforms are panacea to prevent leakages of revenue from VAT and CED. 

Keywords: Company Income Tax, Nigeria economy, Petroleum Profit Tax, Value Added Tax, economic growth

Tax Revenue Volatility and Economic Growth in Nigeria (Published)

Over the years Nigeria has experienced downward slope in its productivity and economic growth. This is evident in the country’s inability to deliver on national plan, high rate of unemployment, poor road networks, low quality education and low standards of living. In all these, studies have shown low and unsteady revenue generation in the country. This study investigated tax revenue volatility on economic growth in Nigeria, using inflation and exchange rates as moderating variables. This study adopted ex post facto research design. Data were obtained from certified sources; namely, National Bureau of Statistics, Central Bank of Nigeria Statistical Bulletin and Federal Inland Revenue Services for the 1981Q1-2017Q4, amounting to one hundred and eight (108) observations. Data were exposed to the scrutiny of the appropriate regulatory agencies for validity and reliability. Pre-estimation tests were conducted using Pearson correlation and stationarity tests. The post-estimation tests included linearity, Heteroskedasticity, Breusch-Godfrey serial Correlation Lagrangian Multiplier and stability test. Data were analyzed using both descriptive and inferential statistics. Findings revealed that tax revenue volatility moderated by inflation rate and exchange rate had significant effect on economic growth (EG) in Nigeria (Adj. R² =0.6, F _{(3, 105)} =2140.285, p <0.05; β₁ = 0.219). This study concluded that tax revenue volatility affects economic growth in Nigeria. It was recommended that government should formulate tax policies that will encourage steady tax revenue. In addition, government should ensure prudent application of tax fund to the development of infrastructure that would translate into economic growth.

Keywords: Tax Revenue, economic growth, gross domestic products, tax bribe, tax compliance costs, tax penalty, tax volatility

Petroleum Profit Tax Volatility and Economic Growth in Nigeria (Published)

Nigeria has experienced downward slope in its productivity and economic growth. This affects the macroeconomic environment as it is evident that the country has challenges in fixing their roads, challenging in achieving national plan, high rate of unemployment, low quality education and low standards of living. In all these, studies have implicated low and unsteady revenue generation in the country. This study investigated petroleum profit tax volatility on economic growth in Nigeria, using inflation and exchange rates as moderating variables. This study adopted ex post facto research design. Data were obtained from certified sources; namely, National Bureau of Statistics, Central Bank of Nigeria Statistical Bulletin and Federal Inland Revenue Services for the 1981Q1-2017Q4, amounting to one hundred and eight (108) observations. Data were exposed to the scrutiny of the appropriate regulatory agencies for validity and reliability. Pre-estimation tests were conducted using Pearson correlation and stationarity tests. The post-estimation tests included linearity, Heteroskedasticity, Breusch-Godfrey serial Correlation Lagrangian Multiplier and stability test. Data were analyzed using both descriptive and inferential statistics. Findings revealed that Petroleum profit tax volatility had positive and significant effect on EG in Nigeria (R² = 0.56, β₁ = 0.422, t₍₁₀₇₎ = 6.927, p<0.05). This study concluded that Petroleum profit tax volatility affects economic growth in Nigeria. It was recommended that government should formulate tax policies that will encourage steady tax revenue. In addition, government should ensure prudent application of tax fund to the development of infrastructure that would translate into economic growth

Keywords: Petroleum Profit Tax, Tax Evasion, Tax Revenue, economic growth, gross domestic products, petroleum profit tax volatility, tax volatility

Causal Relationship between Financial Structure and Economic Growth in Contemporary African Economy: A Case Study of Nigeria from 1990-2018 (Published)

This study examined financial structure and economic growth of contemporary African economies; evidence from Nigeria. The specific objectives of this study are to investigate the effect of financial structure in bank credit to the private sector ratio (BC), market capitalization ratio (MC), liquid liability ratio (LLR), turnover ratio (TR) and value of traded share (VTS) on economic growth variable in Gross Domestic Product (GDP). The study was anchored on bank based and market-based theory. The study used secondary data obtained from World Bank Data Atlas and subjected them to Granger Causality technique to test the interaction between independent variables and the dependent variable at the 5% level of significance. The findings show that financial structure in BC, MC, LLR, TR and VTS had no significant effect on GDP in the contemporary African economies. The result further discovered that there was absence of long run relationship in the study. Thus, the study concludes that financial structure does not have significant effect on economic growth in the contemporary African economies. Hence, the study recommends that financial structure should strengthen and enhance availability of money supply to key sector of the economy thereby improving economic growth by ensuring financial deepening within the economies and providing viable economic environment for financial enhancement to boost investment activities within the Nigerian economy.

Keywords: Bank credit, GDP, Market Capitalization, economic growth, financial structure

Economic Performance and Accrual Accounting Reform: OECD versus Non-OECD Countries (Published)

This paper examines whether economic performance indices of nations signals accrual accounting reform or whether they have random effect. The secondary analysis of accrual accounting data distilled from the report of the PWC global survey of accounting and financial reporting practices of 100 central governments was done using the logistic multiple regression model. Economic performance proxied by gross domestic product per capita positively signaled the likelihood of accrual accounting reform with OECD countries 10 times more likely to implement full accrual accounting than non-OECD countries. Growth rate of gross domestic product and debt as percentages of gross domestic product both negatively signaled the adoption accrual accounting reform while tax revenue as percentage of gross domestic product returned a mixed result. The results suggest that poorer non-OECD countries may be constrained by the cost of implementing accrual accounting reform and may therefore require assistance of multilateral development institutions. This study provides empirical evidence of some of the constraints militating against accrual accounting reform that have been canvassed in the literature.

Keywords: Gross Domestic Product, Public Debt, Public Finance, Public Sector Accounting, Tax Revenue, economic growth

Perception on the Naira Devaluation and Its Effects on Poverty Reduction in Nigeria (Published)

The crash of crude oil price has devastated Nigerian economy being a mono-product economy. The nation’s reserves have dropped and the Central Bank is finding it difficult to meet its import demands. There is agitation from investors and the IMF to devalue the currency to stimulate economic growth, encourage export and discourage import. The public thinks otherwise. The study revealed devaluation of the naira will not encourage significant demand for local goods but rather rise in the prices of local products which rise in direct proportion with imported substitutes thereby fuelling inflation. Also, the economy has remained neither diversified nor internationally competitive. It is recommended among others that government review the current import tariffs, promote incentives to encourage investment in local manufacturing, direct foreign direct investment (FDI) on manufacturing/productive industries with hundred per cent (100%) local raw materials and tax holidays.

Keywords: Devaluation, Inflation, Perception, Social Infrastructure, economic growth