Domestic Private Investment and Selected Macroeconomic Indicators in Nigeria:An Econometric Analysis (Published)
Domestic private investment (DPI) plays significant role in economic growth of any economy. It helps in mobilizing domestic resources for socio-economic advancement. Domestic Investment and its determining factors remains one recalling issues in the field of economics and international finance. This is based on the fact that aggregate investment plays a dominant role in stimulating economic growth and development of every nation. However, most of the developing and underdeveloped economies have witnessed low domestic investment and consequently slow economic growth. Therefore, this study investigates the relationship, trends, and impact of domestic private investment and selected macroeconomic indicators in Nigeria, a developing economy. The study analyzed data gotten from the CBN Statistical Bulletin for the duration of 1991-2020. The statistical package used for the study is Econometric Views (E-Views 9.0). Multiple regression techniques via OLS, Augmented Dickey Fuller (ADF) test and Granger causality procedure was applied to determine causalities while Johansen Co-integration test was administered to verify sustainability of the long-run relationships. The result revealed that there exist short and long-run relationships between domestic private investment and key macroeconomic variables- Inflation, Lending rates, gross domestic savings, real gross domestic product, money supply in Nigeria. Vector error correction model was also adopted to determine the speed of adjustment between the independent variables and the dependent variables. The OLS result revealed that there exist a positive and significant relationship among GDSA, BMOS, RGDP and PDIV, negative and significant relationship among PLER, INFR, and PDIV. Therefore, the study recommends among others that Nigerian government must be resolute in their resolve to drive private domestic investment in the country by implementing appropriate monetary and fiscal policies that address inflation, interest rate, domestic savings and money supply. This will no doubt fast track inclusive growth.
Keywords: Economy, Interest Rate, private domestic investment
Impact of Exchange Rate on Economic Growth: Evidence from Nigeria (Published)
The effect of the exchange rate on GDP growth in Nigeria from 1985–2021, according to this analysis. The World Bank’s World Development Indicator (WDI) and the Central Bank of Nigeria’s (CBN) Statistical Bulletin were used as secondary sources of data. The real exchange rate served as a stand-in for the actual exchange rate, while real gross domestic product was used to gauge economic growth. We used the Augmented Dickey-Fuller unit root test to find out how integrated the series was. The bound test was used to test for cointegration. The bound test found that the exchange rate and economic growth are related in the long term. This research used the autoregressive distributed lag technique to estimate the short- and long-term effects of the exchange rate on GDP growth. The ARDL analysis shows that there is a weak negative correlation between the exchange rate and GDP growth. According to the research, trade openness has a small but favorable effect on GDP growth. Furthermore, the research indicated that foreign exchange reserves significantly and positively impacted economic development. There was also a negative and statistically significant relationship between interest rates and GDP growth. The analysis found that the exchange rate did not have a significant role in determining Nigeria’s economic development. Given the importance of a stable and predictable exchange rate in boosting economic development, the research suggests that monetary authorities implement a policy primarily aimed at stabilizing exchange rates.
Keywords: Interest Rate, Real Exchange Rate, economic growth, external reserve, trade openness
Richard Cantillon’s Ideologies and its Implications for Economic Development in Nigeria (Published)
This paper examines and ascertains how the contributions of Richard Cantillon have been relevant to the development of the Nigerian economy. In doing this, the economic thoughts of Richard Cantillon were critically examined in order to see how these issues raised have been affecting the Nigerian economy. Political economy and descriptive approaches were used to x-ray the relevance of Richard Cantillon’s contributions to Nigeria’s development. His contributions among others include: the nature of wealth, social and economic organization of people, wages of labour, theory of values, population problems and the use of gold and silver, barter, prices, circulation of money, interest, foreign trade, foreign exchange and banking and credit. The findings of the study revealed that these contributions are of great relevance to economic development in generally, but have not specifically contributed to the development of Nigerian economy. This is seen in the areas of low per capita income, negative attitude to work, inevitable population problems, persistent increase in prices, high lending interest rate, unfavourable terms of trade, incessant and diversion of public funds into private business rather than the real economy, and without doubt Nigeria has no place in foreign trade. Based on the foregoing, it was concluded that all these ugly trends accounted for the reason why economic development is not at sight in Nigeria. Thus, it was recommended that the monetary authorities should initiate sound monetary policies. Also, these monetary policies should be complemented with effective fiscal policies in order to put the Nigerian economy back to path of economic growth and development.
Keywords: Economic Development, Exchange Rate, Fiscal Policies, Foreign Trade, Interest Rate, Monetary Policies, Money Supply, Wages of Labour