Trade Openness and Manufacturing Sub-Sector Growth in Nigeria (Published)
The manufacturing sub-sector and trade openness play key roles in economic growth of nations, various government administrations in Nigerian recognize these roles and have made significant efforts (SAP, Trade, Export, Digital Economy and Market access policies. etc.) sub-sector and trade openness in the economic growth of Nigeria remain epileptic except importation. Thus, the study examined trade openness and manufacturing sub-sector in Nigeria between 1981 and 2020. Manufacturing sub-sector and trade openness were proxied by foreign direct investment, trade openness index, Foreign Portfolio Investment, foreign remittances and exchange rate which adopted as check variable and analyzed using both descriptive and econometrics techniques. The results showed that trade openness and manufacturing sub-sector exhibited positive relationship during the period of investigation. However, foreign portfolio investment portrayed subtractive influence on the performance of the manufacturing sub-sector for the period. The study recommends that government of Nigeria should implement the policy of duty draw back/suspension scheme (DDBS) which stipulates the refund of import duties on raw materials including packaging materials used in manufacturing exportable good, subsidize loan and transitory tax exemption to encourage both indigenous and foreign investors to participate more in the manufacturing sub-sector.
Keywords: economic growth, manufacturing sub-sector, trade openness
Trade Openness and Petroleum and Natural Gas Sub-Sector Growth in Nigeria (Published)
Trade openness is adjudged a potent driver of industrial growth. But the Nigerian case is different, empirical evidence show that about 70 to 97 percent of the major products of the industry are imported for domestic consumption indicating that the industry is under performing. Hence, the study examines the impact of trade openness on petroleum and natural gas sub-sector growth in Nigeria from 1981 to 2020. Auto Regressive Distributed Lag (ARDL) econometrics technique was employed in the analysis of the study. The ARDL Bound Test Co-integration, ADF unit root test and some diagnostic tests were conducted. The results of the short run analysis revealed that trade openness triggered the performance of the petroleum and natural gas sub-sector. Foreign direct investment and Foreign portfolio investment were not positively related to petroleum and natural gas sector during the period under consideration. Based on these findings, the study recommended that government in Nigeria should reduce duties on the import of capital goods into the petroleum sub-sector to improve local refining to enhance the export of refined products; promote peace and security in the oil-bearing regions through holistic development as this could attract more foreign investors into the industry. Also, government should encourage modular refineries to complement the main refineries.
Keywords: economic growth, petroleum and natural gas, trade openness
Blue Economy, Sustainable Development and Economic Growth in Nigeria (Published)
Economic growth experienced in Nigeria over the past decade has been primarily impacted by dwindling foreign exchange earnings. These earnings are dictated by an increasingly monolithic economy with an almost singular dependence on crude export proceeds. While various options for diversifying the economy, enhancing productivity as well as creating multiple sub-national and national income streams, abound, not much has been done towards harnessing and optimising these alternative options, hence a national Gross Domestic Product (GDP) that is impeded by regular fluctuations that have come to define the global oil market. Blue Economy (BE) as defined by the World Bank underscores, ‘the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem’. In its hypothesis, this paper posits that BE presents a viable and alternative path to Nigeria’s economic diversification and growth in a manner that is not damaging to the environment and ecosystem, but boosts empowerment, job and wealth creation as key indices of sustainable development and economic growthIn its literature review, the paper connects and underlines typical literature backed cases of BE facilitating sustainable development and economic growth. Its analysis derived from global perspectives, insights and experiences, seeks to situate and apply BE prospects within the Nigerian context. These feeds the eventual proffered recommendations. In its recommendations, the paper puts forward steps that underscore a path to harnessing the Nigeria’s BE in such a way as to ensure sustainable development, and that seeks to satisfy current socio-economic diversification and growth needs, boosting wealth creation and empowerment while ensuring safe climate and environmentally friendly practices.
Keywords: Nigeria, Sustainable Development, blue economy, economic growth
Infrastructure Development and Economic Growth Nexus: The Nigeria Experience (Published)
This study examined the impact of government infrastructural development on transportation (IFDT), road (IFDR), water (IFDW) and telecommunication (ITEL) as they influence the growth process of the Nigerian economy, proxy by real GDP (RGDP), from 1990 to 2023. Data were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin (various issues), World Development Indicators (WDI), and National Bureau of Statistics (NBS). Four models were estimated to capture the influence of infrastructure development on GDP growth. The Augmented Dickey Fuller (ADF) and Phillips Perron (PP) unit root tests were conducted to ascertain the level of stationarity of the series. Descriptive statistics and econometric methods of Auto-Regressive Distributive Lag (ARDL) model and Granger causality estimation tests were conducted to examine the long run relationship of the series.The analysis revealed that infrastructure development on transport services (IFDT) was positive and significant in explaining changes in real GDP of Nigeria. However, Infrastructure development on road (IFDR), water (IFDW) and telecommunication (ITEL) were negative and not significant in explaining changes in Nigeria’s real GDP within the study period. On this basis therefore, the study concludes that there is no long run relationship between the dependent variable (RGDP) and the explanatory variables (IFDT, IFDR, IFDW and ITEL). It was recommended that the government, in partnership with the private sector, should increase her investment in the provision of infrastructural facilities that are reliable, durable and affordable to the people, as this will not just reduce the cost of doing business but also attract foreign investors into the country. Proper and dedicated maintenance culture of existing infrastructure facilities should be prioritized as this will save government huge amount that can be channeled into other areas of development.
Keywords: Infrastructure development on water, Nigeria, Road, economic growth, telecommunication
Cashless Policy and Economic Growth in Nigeria (Published)
The impeding infrastructural decay, inefficient security system on financial information and the high rate of cybercrime impedes efficient and effective electronic payment system which in turn affects the attainment of objective of cashless policy in Nigeria. In view of this, this study examined the relationship between cashless policy and economic growth of Nigeria. Specifically, the study aimed at ascertaining the relationship between web-based transactions, POS transactions and ATM transactions with real GDP of Nigeria over a period of 10 years (2013-2022). This study adopted the ex-post facto design with data obtained from the Nigerian Stock Exchange fact books, National Bureau of statistics (NBS) and Central Bank of Nigeria statistical bulletins for the various years under study. The collected data for this study were computed and analyzed using descriptive statistics and multiple linear regression tools with the aid of SPSS 20.0 software. The findings revealed that POS transactions and ATM transactions have an insignificant positive relationship with real GDP while web-based transactions showed an insignificant inverse relationship. Based on the analysis of variance (ANOVA), the F-change test suggests that the model is statistically significant (p-value = 0.020<0.05). This implies that the joint effect of the predictor variables is statistically significant. In view of this, it is however concluded that cashless policy plays a critical role in improving the economic growth of Nigeria. The study recommended, amongst others, that policymakers should prioritize initiatives that promote secure online transactions, such as implementing robust cyber security measures and ensuring a reliable internet infrastructure.
Keywords: ATM, CBN, POS, cashless policy, economic growth
International Trade and Economic Growth in Nigeria (Published)
This study evaluated the impact of international trade on economic growth in Nigeria from 1986 to 2021.The variables used in this study comprised of gross domestic product as a dependent variable, while oil exports, non-oil exports, oil imports, non-oil imports and exchange rate are the explanatory variables. The employed variables have different order of integration ranging from zero and one, which led to the application of auto-regressive distributed lag (ARDL) model as the method of analysis. The ARDL model investigated long-run and short-run interactions among the variables. The results showed evidence of co-integrating equations amongst the variables. Hence, the key findings that satisfied the research objectives are (i) oil exports have significant positive impact on economic growth in Nigeria in both short-run and long-run. (ii) Non-oil exports exerted positive and significant influence on economic growth in Nigeria in both short-run and long-run. (iii). Oil imports negatively and significantly affected the growth rate of the Nigeria’s economy and (iv) non-oil imports affect the economic growth in Nigeria negatively and insignificantly in both the short-run long-run. The results imply that N1 rise in oil exports increases economic growth by N0.089 in the short-run and by N0.376 in the long-run; whereas N1 rise in non-oil exports increases economic growth by N0.047 in the short-run and N0.199 increase in the long-run. However, N1 rise in oil imports, decreases economic growth by N0.019 in the short-run and N0.092 decrease in the long-run; whereas N1 rise in non-oil imports, decreases economic growth by N0.022 in the short-run and N0.92 decrease in the long-run. Based on the findings, the study recommended that Nigerian government should make judicious use of proceeds from export of crude oil to diversify other productive sectors of the economy. Again, the activities of non-oil sectors like agriculture, industry, etc, should be stimulated to enhance non-oil exports in Nigeria.
Keywords: Exports, Imports, International Trade, Nigeria, economic growth
Monetary Policy Operation and Economic Growth in Nigeria: Evidence from 1990 – 2022 (Published)
The study examined monetary policy operations and economic growth in Nigeria from 1990 to 2022. The primary purpose is to evaluate the impact of monetary policy operations on Nigeria’s economic growth. The data for the study were obtained from National Bureau of statistics (NBS) databased and Central Bank of Nigeria CBN statistical bulletin. The econometric methods of OLS, Co-integration, Variance Error Correction Mechanism (VECM) and Vector Error Correction Model (VECM) were employed to examined the interplay among the critical variables. The natural log of real GDP was employed as the variable of interest while exchange rate and inflation rate as instrument of monetary policy operations. The result of the VECM shows that the overall model is satisfactory given the coefficient of determination of 34 percent and f-statistics of 3.37. The study discovered that the explanatory variables were not statistically significant at 5% level in stimulating economic growth in Nigeria. However, the long run dynamic result also shows that there exists a long-run relationship or equilibrium among the variables. The result of VARM revealed that exchange rate has positive coefficients, indicating a positive relationship with the lagged RGDP. The model has a moderately high R-squared value (0.9429), indicating a reasonably good fit. While inflationary rate indicates negative coefficients with the lagged exchange rate. The model has a lower R-squared value (0.2862), indicating a weaker fit to the data. These finding hold significant implications for the Nigerian economy, highlighting the effectiveness of monetary policy, the importance of exchange rate stability, and the imperative of inflation control in promoting sustained economic growth. Policymakers are urged to prioritise evidence-based decisions, long-term planning, and target interventions to harness the full potential of monetary policy in driving sustainable economic development in Nigeria.
Keywords: Exchange Rate (EXR), Inflation Rate (IFR), Monetary Policy, Real Gross Domestics Products (RGDP), economic growth
Public Expenditure, Official Development Assistant and Economic Growth: A Time Series Analysis for Nigeria (1981 – 2018) (Published)
In addition to divergent views of economists on the effect of public expenditure on economic growth, results of existing empirical studies in developed and developing economies has remained inconclusive and tends to depend on the period of study, econometric method, nature of data and the composition of government expenditure. In this study, public expenditure in Nigeria is decomposed into domestic and the foreign receipts components. The domestic component comprises capital expenditure (GCE) and recurrent expenditure (GRE) while the foreign receipts component captures foreign inflow of official development assistance (ODA). Employing extended aggregate production function framework and bound test approach (ARDL model), this study examined the impact of each of these three components of public expenditure (GCE, GRE and ODA) on economic growth in Nigeria for the period (1981- 2018). The findings of this study indicate the existence of a long run relationship between the macroeconomic variables estimated in the model. The recurrent expenditure (GRE) has positive impact on economic growth both in the short-run and in the long-run, countering the widely held view that government consumption spending is growth-reducing. The capital expenditure (GCE) and official development assistance (ODA) have negative impact on economic growth in Nigeria both in the short-run and long-run. The granger causality test result shows no causal relationship between GDP and GCE and between GDP and ODA, but a bi-directional causal relationship exists between GDP and GRE. It is recommended that greater percentage of public fund should be expended as capital expenditure and such fund should be properly utilized on acquisition of physical capital and social overhead capital like transportation, electricity, communication, irrigation, flood control, research and human capital development, capital formation in agricultural and industrial sectors to enhance the productive capacity of the economy. ODA in recent times has been unreliable source of finance in Less Developed countries, hence Nigeria should not heavily depend on it. However, whatever ODA is received should be properly utilized and channel into productive projects which have significant positive impact on economic activities and wellbeing of the populace. The fight against corruption in the country should be frontally confronted to free more public fund for collective development purposes in the country.
Keywords: Capital Expenditure, Nigeria, Official Development Assistance, Public expenditure, Recurrent Expenditure, economic growth
Revenue Per Capita and Economic Growth Nexus: Building a New Revenue Framework for Nigeria (Published)
The challenging consequences of poor economic performance across most emerging economies is a reflection of the weak public revenue management system. Hence, the study into Revenue per capita and Economic growth nexus: Building a new revenue framework for Nigeria. The study employed the Parsimonious Error Correction Model (ECM) for adjusting the parameters of auto regressive distributed lag (ARDL) model to examine the outcome of economic growth, proxy of real gross domestic product (RGDP) on Revenue per capita, proxy of gross national product per capita(GNPPC); gross fixed capital formation (GFCF); and Inflation rate (INFR). The finding revealed a significant positive relationship between GDP and its lagged value, as well as GNPPC. Whereas, a negative but significant impact subsist between GDP and lagged value of GNPPC; while, an insignificant negative impact exists between GDP and GFCF and its lagged value. Inflation rate exhibited a moderate significant inverse relationship with economic growth during the review period. Based on the finding, It was recommended among others: tax revenue generating agencies should pursue fiscal sustainability by rethinking Nigeria’s tax policy mix and design to consummate enduring prosperity for Nigerians.
Citation: Opuala-Charles S. and Orji J.O. (2022) Revenue Per Capita and Economic Growth Nexus: Building a New Revenue Framework for Nigeria, International Journal of Development and Economic Sustainability, Vol.10, No.6, pp.1-17
Keywords: Investment, Tax Revenue, economic growth, revenue per capita
The Evolution of Privatization in Brazil: The Case of Embraer (Published)
State participation in the economy has been intensely debated over the past three decades. In Brazil, especially after the advent of the Federal Constitution in 1988. Privatization in Brazil, however, was instituted by Law 8.130/90, which established the National Plan for Privatization, aiming at transferring to the private sector activities unduly exploited by the public sector. In this article, we investigated one of the most significant privatizations in Brazilian history, the case of Embraer, the world’s third largest civil aircraft manufacturer. Key findings pointed out a complex privatization process, including golden share vetoes and institutional challenges faced by Embraer, such as the first Brazilian company to adopt the International Financial Reporting Standards (IFRS) fully. In addition, the careful analysis suggested implications for the reduction of public debt. Also, the resumption of investments in companies and activities transferred to the private sector, modernization of the country’s industrial park, increasing its competitiveness, and reinforcing business capacity in Embraer’s jet C-series sector and military aircraft, for instance. Also, implications for the public administration to focus its efforts on actions where the State’s presence is necessary for achieving national priorities. Finally, the strengthening of the capital market, as well as the democratization of the ownership of the capital of Embraer are topics to be debated in the present article.
Keywords: Foreign Direct Investments, National Security, Privatization, civil aviation, economic growth