Gross Domestic Product

Effect of Increasing Government Debt Profile on Economic Prosperity of Nigeria (Published)

The study aimed at assessing the effect of increasing government debt profile on economic prosperity of Nigeria. Specifically, the study examined the extent that Gross Domestic Product (GDP) was affected, during the period of study, by rising domestic debt, external debt, and cost of borrowing in Nigeria. The data for analysis were sourced principally from CBN Bulletins and Debt Management Office. The null hypotheses that domestic debt, external debt, and cost of borrowing do not significantly affect Gross Domestic Product, were tested through a multiple regression analysis. The findings indicate that Domestic Debt has a positive and significant effect on Gross Domestic Product in Nigeria with coefficient of 1.005965 and p-value of 0.0000. Furthermore, the external debt stock reveals a negative and non-significant effect on Gross Domestic Product with coefficient of -0.083963 and p-value of 0.5909, while Cost of Borrowing exposes a positive and non-significant effect on Gross Domestic Product in Nigeria with coefficient of 0.038835 and p-value of 0.7589. The R-squared (Coefficient of Determination) indicates that 98% of the variations in Gross Domestic Product in Nigeria could be explained by changes in Domestic Debt, External Debt and Cost of Borrowing. The implication of the findings is that economic prosperity is facilitated by Domestic Borrowing while External Borrowing must be avoided where possible because of its’ negative effect on GDP. In addition, the effect of Cost of Borrowing on GDP is purely dependent on the appropriateness of use of borrowed fund. The study recommended that government should first explore internal sources of fund whenever borrowing is unavoidable in preference to foreign/external sources, reduce or avoid external borrowing and properly apply the borrowed fund for its economy to prosper.

Keywords: External Debt, Gross Domestic Product, Nigeria, cost of borrowing, economic prosperity, internal debt

The Financial Impact of COVID-19 on Poultry Industry in Nigeria (Published)

The covid-19 pandemic as declared by WHO in March 2020 is a game changer that introduced a “new normal” of every facet of life, every sector of the economy and every cluster of the population. The key indicators of business plan and continuity, government policies and security imopacting logistics have been affected and in all affecting the short-term survival rate of the poultry industry.The analysis revealed that all proxies of covid-19 indicators such as business plan and continuity, government policies and security impacting logistics have a significant positive effect on the financial health of the poultry industry (Adjusted R²= 0.949, F-statistics = 5.512 : p= 0.000<0.05). Thus, the research concluded that a well-managed Covid-19 indicators and proxies have a significant positive effect on the financial health of the poultry industry in Nigeria.

Keywords: COVID-19, Gross Domestic Product, cycle management., poultry industry

Accounting Implications of Oil Price, Interest Rate and Unemployment on Nigeria’s Economic Growth (Published)

Holding other variables constant, exchange rate and unemployment are supposed to have an inverse relationship. Is this really the case in the Nigerian economy? Does oil price have an impact on unemployment in Nigeria? Our study analyzed the accounting implications of oil price, interest rate and unemployment on Nigeria’s economic growth using data from 1981 to 2019. Using ARDL and VEC models, our finding revealed that all variables had a short and long term association and were statistically significant, hence we recommended better economic policies should be put in place by government to curb unemployment because this has a long and short run implication on GDP, and that if not properly managed can lead to economic and social vices. The government should formulate policies that are economically friendly in order to encourage local production to boost our export and improve our local currency (Naira) and the exchange rate. This will increase local production and firms will create employment opportunities for our teeming population. Increased oil price has really helped in boosting our GDP. However, the economy should be diversified because any drop in oil price will definitely affect our GDP drastically, both in the short and long run.

Keywords: Gross Domestic Product, Interest Rate, Oil price, Unemployment, accounting implication, and economic policy, efficient wage model

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

Evaluation of Petroleum Crude Oil Price Volatility on Nigeria National Income and Nigeria Economy (Published)

Oil dependent nations have the potential of economic growth and development in a stable international oil price system. However, the effect of oil price volatility in the evaluation of Nigeria national income and economy is imperative in the face of Nigeria reliance on oil becoming a dream as the negative effect on budget implementation is clearly discovered by researchers. This study evaluated the effect of crude oil price volatility on Nigeria economy and the national income. The study adopted ex-post facto research design. The study covered a period of 22years from 1995 to 2017.  Descriptive and inferential (regression) statistics were adopted for the study. The result showed that oil price volatility has significant combined  effect on Nigeria’s economy (Gross Domestic Product, Gross National Product and Per Capital Income) Adj.R² of 0.432;0.449 &0.478, F-Statistics of 7.858, 9.488 ,& 9.238 and p-value 0.004, 0.002 & 0.002.Oil price volatility has no significant negative  impact on Gross Domestic Product with β₂₂ of -0.004,R² of 0.023  t-statistics of -0.630 & p-value  of 0.537;oil price volatility has no significant  negative impact on Gross National Product with β₂₂ of -0.005,R²of 0.027,t-statistics of -0.692 and p-value of 0.498;also oil price volatility has no significant negative impact on Per Capital Income with β₂₂ of -0.004,R² of 0.027,t-statistics of -0.688 & p-value of 0.500.The study concluded that oil price volatility affects national income and Nigeria economy significantly.  The study recommended that Nigeria should adopt policies that will address negative oil price shocks so that the budgetary system and national income will not be affected.

Keywords: Exchange Rate, Gross Domestic Product, National Income, Nigeria economy, gross national product, oil price volatility

Insurance Business: A Panacea for Agricultural Sector Sustainability in Nigeria (Published)

Insurance sector plays important role in the growth of Nigeria economy as well as agricultural sector. The study investigated the impact of insurance business on the growth of agricultural sector in Nigeria, using time series data for 18 years from 2000 to 2017, the data used were total insurance investment; total non-life insurance premium (Independent) and the agricultural sector output to Gross Domestic Product (Dependent) which was obtained from central bank of Nigeria (CBN) statistical bulletin and also National insurance commission (NAICOM) statistical bulletin. OLS regression was conducted as well as Augmented Dickey Fuller unit root test which reveals that all the variables are stationary at the order of one, the test for cointegration shows that all the variables cointegrate when AGDP is the endogenous variable. The granger causality test reveals that there is a bidirectional relationship existing between AGDP and total non-life insurance premiums, while unidirectional relationship exists between AGDP and total life insurance premiums with no causal relationship existing between AGDP and total insurance investments. The regression result shows that all the variables have significant impact on agricultural output to gross domestic product and also there is a positive relationship between all the predictors and agricultural output to GDP. It was therefore concluded that insurance serve as a remedy to the sustainability of agricultural sector in Nigeria. The study therefore recommends that insurance sector should provide adequate information particularly on the risk concerning agricultural sectors and also providing a maximum coverage for farmers and their products to reduce the risk which the farmers retained or being expose to in the sector.

Keywords: Agriculture, Gross Domestic Product, Insurance, Investment, Life Insurance, general insurance

Bank Fraud and Its Effect on Nigerian Economy- A Study of Selected Quoted Banks (Published)

This study assessed the effect of bank fraud on Nigerian economy  field survey research methods were employed in the study. Data were collected from the financial statements of the selected banks in Nigeria This study adopted both descriptive and inferential statistics to achieve the stated objective. The descriptive statistics used included measures of central tendency such as mean, maximum and minimum and measure of variability such as, variance and  standard deviation. The inferential statistics adopted was OLS Model –Multiple Linear Regression Analysis.  Customers’ deposits and Bank distress were regressed on the various explanatory variables to determine the impact of banking fraud on the Nigerian economy. The study established that the relationships are significant and that the models can be used for meaningful analysis and decision making. Again it was ascertained that  there is a great level of interaction between bank fraud and economic development of Nigeria. This research work has attempted to highlight the incidence and magnitude of fraud and some of its negative impact on the Nigeria economy. Fraud inflicts severe financial difficulty on banks and their customers. The study recommended that banks need to strengthen their internal control systems to be able to detect and prevent fraud and fraudulent activities and to protect its assets. The regulatory and supervisory bodies of banks in Nigeria need to improve their supervision using all tools at their disposal to appropriately check and curtain the incidence of fraud and fraudulent practices in the banking industry in Nigeria.

Keywords: Bank Distress, Bank Fraud, Gross Domestic Product, Per Capital Income

Influence of Trade Liberalization on the Growth of Nigerian Economy: Autoregressive Distributed Lag Approach (Published)

This study examined the relationship between trade liberalization and economic growth proxied by gross domestic growth rate in Nigeria. The study specifically assessed whether there is a long run and short run causal relationship running from trade liberalization to economic growth in Nigeria. Trade liberalization was measured using trade openness, exchange rate, total import trade, total export trade and balance of trade. The data for the study were source from the CBN statistical bulletin for the period 1986 to 2014. The study used the Autoregressive Distributive Lag (ARDL) technique for data analysis. Findings from the analyses showed that trade liberalization has no long run causal relationship with gross domestic product growth rate in Nigeria. Also, trade openness and exchange rate have no short run causal relationship with gross domestic product growth rate in Nigeria. Lastly, total import trade, total export trade and balance of trade has short run causal relationship with gross domestic product growth rate in Nigeria. The study on the basis of these findings recommends the efficient use of total import trade, total export trade and balance of trade policy measures of trade liberalization in other to maximally benefit from trade liberalization.

Keywords: Exchange Rate, Gross Domestic Product, Trade Liberalization, trade openness

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

External Debt and Economic Growth: The Nigeria Experience (Published)

This research work was aimed at ascertaining the impact of external debt on economic growth in Nigeria. Ex-post facto research design was adopted for the study. While data on Gross Domestic Product (GDP), External Debt Stock and External Debt Service Payment were obtained from World Bank International Debt Statistics, Exchange Rate data were collected from Central Bank of Nigeria Statistical Bulletin, 2013. The period of study was 1980-2013. Model was formulated and data were analyzed using Ordinary Least Square. Diagnostic tests were conducted using Augmented Dick Fuller Unit Root Test, Co-integration and Error Correction Model. The independent variable was GDP, while the explanatory variables were External Debt Stock, External Debt Service Payment and Exchange Rate. We discovered that External Debt had a positive relationship with Gross Domestic Product at short run, but a negative relationship at long run. Also, while External Debt Service Payment had negative relationship with Gross Domestic Product, Exchange Rate had a positive relationship with it. The paper concluded that exchange rate fluctuation had positive impact on the Nigerian economy while external debt stock and debt service payment had negative impact on the same economy. The study recommended amongst others, that Debt Management Office should set mechanism in motion to ensure that loans were utilized for purposes for which they were acquired as well as set a ceiling for borrowing for states and federal governments based on well-defined criteria.

Keywords: Debt Stock, Exchange Rate, External Debt, External Debt Service Payment, Gross Domestic Product