Towards An Understanding of the Dynamics of Anglo-Nigerian Trade Relations, 1971 To 1990 (Published)
Nigerian-British Trade relations spanned the pre-colonial, colonial and post-colonial period. The main thrust of the paper is to irradiate the dynamics of Anglo-Nigerian Trade Relations during the period, 1971 to 1990. The paper examines the trade interactions in commodities especially imports and exports that occurred between Nigeria and Britain and looks at the evolving nature of the relations during the period. It also highlights the pattern of dependency in Anglo-Nigerian Trade relations and how the peculiarities of the period affected the character of the relations. The paper concluded by submitting that Anglo-Nigerian Trade relations during 1971 to1990 were more beneficial to Britain than Nigeria because of disequilibrium in Trade Relations, payment, difficulties on the part of Nigeria and her failure to meaningfully diversity its exports, which had over-concentration on oil to the relative sheer neglect of agricultur., There is therefore need to address those areas so as to redress the imbalance.
Keywords: Anglo-Nigerian, Dynamics, Exports, Imports, Trade Imbalance, Trade Relations
EXCHANGE RATE AND TRADE BALANCE IN GHANA- TESTING THE VALIDITY OF THE MARSHALL LERNER CONDITION (Published)
Currency depreciation has been lauded as a means of improving a country’s trade balance borrowing from the Marshall Lerner Condition that the sum of the elasticity or the coefficient of the trade balance in respect of the exchange rate be greater or equal to unity. This paper examined exchange rate and trade balance in Ghana testing the validity of the Marshall Lerner Condition at aggregate level. The data spanned from 1980-2013 sourced from World Development Indicators. Co integration and vector error correction mechanism (VECM) was used to estimate the short as well as the long run parameters. The result of the findings showed that real effective exchange is negatively linked to trade balance in long run. In the short run the lag one coefficient shows a positive sign implying that trade balance deteriorate in the short run due to some contractual obligations already signed by the domestic country with the trading partners. However in the long run the coefficient shows that a depreciation of cedi all things being equal will lead to an improvement in Ghana’s trade balance. Though the Marshall Lerner condition is not met in Ghana because of the REER coefficient less than unity but evidence from the result indicates that depreciation can be used to improve on the trade balance. The estimated coefficient of the error correction term is -0.3696 which implies that the speed of adjustment is approximately 37. percent per quarter. This negative and significant coefficient is an indication that co integrating relationship exists among the variables. The paper recommends that Ghana should devalue its currency to move from the deficit side of the J curve to the surplus side since evidence from the result shows that depreciation or devaluation can substantially improves the trade balance in the long run.
Keywords: Currency depreciation, Exports, Imports, Income, Marshall Lerner Condition, Trade balance