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

Tax Revenue and Nigerian Economic Growth (Published)

This study was designed to investigate the tax revenue and Nigerian economic growth for period of three decade, using time series data from 1986 to 2015. The objective of this study was to examine the significant difference between the effects of oil and non oil tax revenue on economic growth in Nigeria. Data collected from Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics (NBS).The study utilized both descriptive and Paired Sample T-test with the aid of Statistical Package for Social Science (SPSS) Version 23.The findings showed that, oil and non oil tax revenue were positive and strongly correlated with Real Gross Domestic Product (RGDP) with coefficient( r = .902, P< 0.05) and (r = .975, P< 0.05). The results also showed that, there was significant difference between the effects of oil and non oil tax revenue on RGDP as shown ( t₂₉ = 11.424 , P< 0.05) and ( t₂₉ = 10.968, P< 0.05). Findings also showed that, oil and non oil tax revenue contributed 7.7% and 2.5 % to RGDP from 1986-2015. This research work concluded that, there was significant difference between the effects of oil and non oil tax revenue on economic growth in Nigeria. There should be accountability and transparency from government officials on the management of revenue derived from taxation (oil and non oil) in Nigeria.

Keywords: Oil and Non Oil, Real Gross Domestic Product, Tax Revenue, economic growth

The Tenuous Relationship between Oil Revenue and Nigeria’s Economic Growth (Published)

This study examined the relationship between revenue generation and economic growth in Nigeria during the 45-year period, 1971 to 2015. This period heralded the sweet side of global energy crisis that precipitated the petrodollar windfall following steep rise in crude oil prices and the sour side that saw the economy shrink as a result of downward spiral of or crash in global energy prices and/or decline in oil production (slump non-oil boom). Using the ANCOVA model, the study expressed the change in growth rate of GDP as a function of various dimensions of tax, chiefly, change in period lag values of value added tax, personal income tax, company income tax, petroleum profit tax and custom and excise duties with a dummy variable that captures the contribution of oil revenue windfall. The results showed no significant difference in average changes in economic growth between the oil boom and oil slump periods. This suggests that Nigeria’s petrodollar windfall had no significantly stimulating effect on the country’s growth and development trajectory during the 45 years. The findings of this study adumbrate the anecdotal evidence of poor resource governance architecture that has characterized not just Nigeria’s petroleum industry but also the country’s macroeconomic management. The resonance with, and the attendant lesson from, the Dutch Disease Syndrome sequel to the country’s historicity of mismanagement of resources including the petro-dollar windfalls, is the major policy implication of this study

Keywords: Dutch Disease, Nigeria, Oil Boom And Slump, Oil Revenue Windfall, Resource Course, economic growth

Export Diversification Determinants in West African Sub-Region (Published)

This paper empirically studies the export diversification determinants in west Africa sub-region as diversification is critical for the region to promote sustainable development and economic transformation. The study used regression to analyze the data sourced from 17 west African countries from year 1995-2015. The results suggest that per capital income, human capital, investment, geographical location and good governance are significant drivers of export diversification, while terms of trade and population have negative relationship with export diversification in Africa. The evidence shows that export diversification is necessary in managing sustainable development in Africa. The study recommend among other things that the region should come up with an efficient governance that formulate and implement sound economic policies, create investment friendly environment and should pursue an aggressive process of export diversification that will result in buoyant and robust economy which will reduce high dependent on imported goods.

 

Keywords: African continent, Developing Economy, Export diversification, West Africa, economic growth

The Impact of Company Income Tax and Value-Added Tax on Economic Growth: Evidence from Nigeria (Published)

This study examined the impact of companies’ income tax, value-added tax on economic growth (proxy by gross domestic product) in Nigeria. Secondary time series panel data was collected for the period 2005 to 2014 from the Statistical Bulletin of the Central Bank of Nigeria (CBN). The study employed Ordinary Least Squares (OLS) technique based on the computer software Windows SPSS 20 version for the analysis of data, where gross Domestic product (GDP), the dependent variable and proxy for economic growth, was regressed as a function of company income tax (CIT) and value-added tax (VAT), the independent variables. The results of the analysis showed that both company income tax and value-added tax have significantly positive impact on economic growth. Based on the findings, the study recommended that government should strengthen the tax administration system to broaden the tax income, and embark on tax education to ensure voluntary tax compliance. The study also recommended that the tax authorities should employ qualified tax professionals who should be regularly trained and be retained in the tax administration system for efficient tax administration and collection.

Keywords: Company Income Tax, National Income, Value Added Tax, economic growth

Foreign Capital Inflows and Nigerian Economic Growth Nexus: A Toda Yamamoto Approach (Published)

This study investigated the relationship between foreign capital inflows and economic growth in Nigeria for the period of 1981-2014. In this study, foreign capital inflows were proxied by Foreign Direct Investment, Foreign Portfolio Investment and Foreign Aid while economic growth was proxied by Gross Domestic Product (GDP). The study employed annual data generated from CBN statistical bulletin, and Toda Yamamoto test of causality was used to determine the relationship between foreign capital inflow and economic growth in Nigeria. The result revealed that there is bi-directional causality running from GDP to FDI as well as from FDI to GDP. It also indicates that there is a unidirectional causality between FPI and GDP with causation running from FPI to GDP. Furthermore, the result showed a unidirectional causality between GDP and FA with causation running from FA to GDP. Finally the joint causation between all the components of foreign capital inflow i.e. FDI, FPI, FA and GDP indicates that increase in foreign capital inflow causes GDP to increase positively. And so, government should design policies and programs to enhance the inflows of foreign capital as the will accelerate the speed of growth in the economy.

Keywords: Foreign Capital Inflows, Toda Yamamoto, economic growth