Nigeria

Domestic Macroeconomic Drivers of Industrialization in Nigeria: Status and Prospects from the Manufacturing Sub-Sector (Published)

While most advanced economies are in the process of industrializing their economies, plots by successive governments to transform the economy Nigerian, from a commodity-driven to an industrialized one, has not yielded much fruits despite several industrial policies and reforms. Based on the United Nations/World Bank success yardsticks with theoretical framework rooted on the Prebisch-Singer Hypothesis and the endogenous growth model, this study utilized K-class estimation procedure on Nigeria’s time series between 1990 and 2016. The result obtained indicates that infrastructural development, institutional framework, bank credit,foreign direct investment, electricity, stable exchange rate, low inflation and economic diversification are key drivers of industrialization. The findings also confirm that except the Nigerian economy achieves improved infrastructure delivery and institutional framework as well as stable domestic and currency prices, the efforts towards economic diversification agenda may be counterproductive. It is therefore expedient that Nigeria focuses on building strong macroeconomic fundamental that would accentuate its take-off to industrialization.

Keywords: Diversification, Gross Domestic Product, Industrialization, Macroeconomy, Manufacturing, Nigeria

Domestic Debt and the Performance of Nigerian Economy (1990 -2018): Investigating the Nexus (Published)

The study evaluated the relationship between domestic debt and the performance of Nigerian economy;for the period (1990-2018). Secondary data were used and collectedfrom Central Bank of Nigeria Statistical Bulletin. The study used Gross Domestic Product (GDP) and was employed as the dependent variable to measure the performance of the Nigerian economy; whereas, Development Stock, Treasury Bill and Interest rate were also employed as the independent variables.Hypotheses were formulated and tested using time series econometrics Models.  The result revealed that the variables do not have unit roots. There is also a long-run equilibrium relationship between domestic debt and Gross Domestic Product. The result confirmed that about 72% short-run adjustment speed from long-run disequilibrium. Domestic debthad a causal relationship with Gross Domestic Product. The coefficient of determination indicated that about 64% of the variations of the performance of Nigerian economy can be explained by changes in domestic debt variables. The study concluded that domestic debt had a causal relationship with performance of the Nigerian economy.Thus, the study recommended that Government and policy makers should maintain a debt bank deposit ratio below 35 percent and resort to increase the tax revenue to finance its projects. Government should divest itself of all projects which the private sector can handle including refining crude oil (petroleum product) and transportation. Government should maintain a proper balance between short term and long term debt instruments in such a way that long term instruments dominate the debt market.

Keywords: Domestic debt, Economics Performance, Investigating the Nexus, Nigeria

Social Development Strategies for Promotion of Community Development in Nigeria (Published)

Every social action is perceived as a joint undertaking of’ people in their social settings to improve their living conditions in various communities in the society. Social development as an educational process stimulates consciousness among people in order to be aware of their capabilities to address prevailing situations and realities in various participating communities. Social development as a concept is used to stimulate awareness in people for the ultimate purpose of understanding their social realities ant their potentialities to promote development that will improve their living conditions in their various communities. The paper identified conscientisation strategy, communication strategy and group action strategy as strategies of social development in stimulating community development. Based on the issues discussed appropriate recommendations are made which include the urgent need to ensure that adequate information is made available to people through the instrumentality of conscientisation and communication as well as that social development should be driven by common vision and interest of the people of participating communities in Nigeria.

Keywords: Community development, Nigeria, Social Development, Strategies.

Trade Openness and Nigeria’s Economic Growth (1990- 2015) (Published)

This study examines empirically the relationship between Trade openness and Economic growth in Nigeria. The study covered the period 1990 – 2015, using ARDL approach to cointegration.  The ARDL result confirmed the existence of a long-run relationship between Economic Growth, Trade Openness, Foreign Direct Investment and Gross Capital Formation. It was found that Trade Openness and Gross Capital Formation had positive and negative impacts respectively on growth rate of GDP in the short run. Therefore, this study concludes by recommending that; (i) trade openness should be regulated by government; from our result an increase in trade openness caused a decrease in our GDP (ii) FDI should be encouraged as it was seen to have significantly improved economic growth in Nigeria.

Keywords: Auto-Regressive Distributive Lag (ARDL), Nigeria, economic growth, trade openness

The Dynamics of Human Capital Development and Industrial Growth in Nigeria (Published)

This article is aimed at providing empirical evidence on the impact of human capital development on industrial growth in Nigeria. Time series data spanning 1976-2016 period on relevant variables were analyzed using both descriptive and econometric techniques. ADF procedures were used to test for stationarity of the variables. The results show that the variables moved towards equilibrium in the long-run. The results also show that recurrent expenditure on education and health has a negative impact on industrial growth. The goodness of fit was encouraging. This article asserts that rigorous pursuance of graduate skill acquisition programmes as well as adherence to the 26 per cent minimum budgetary allocation demanded by UNESCO for education which will spur improvement in human capital development will impact industrial growth positively. More-so, incentives such as tax holidays, pioneer reliefs and exemptions that aids increased investment in industrial growth be vigorously pursued by governments at all levels in Nigeria.

Keywords: Exchange Rate, Human Capital Development, Industrial Growth, Nigeria, expenditure on education, expenditure on health, gross capital formation

Determinants of the Technical Efficiency Performance of Privatized Manufacturing Firms in Nigeria: An Econometric Analysis (Published)

This work is designed to empirically evaluate the determinants of the technical efficiency of ten privatized manufacturing firms in Nigeria. The firms were selected from the numerous firms in the four geo political zones to represent the interest of the entire country due to their age long establishment, size and government equity investment in them. The study adopted  Data envelopment analysis (DEA) and ordinary least square regression  as the techniques of analysis and the period of analysis is five years before and five years after privatization. The efficiency scores generated from the first stage using Data Envelopment Analysis (DEA) was used as dependent variables in the second stage against a set of explanatory variables. The investigation revealed that concentration ratio, size and age of firms were considered as determinant of technically efficiency. It also shows that, concentration ratio will lead to higher monopoly power, with age firms gain experience and with size, firms gain more strength to control or have a larger share of the market. It is recommended that there should be market competition with liberalization of entry conditions, in order to terminate monopoly and allow for new entrants to make operations competitive for production. This will be in line with the industrialization policy.

Keywords: Determinants, Nigeria, Privatized Manufacturing firms, Technical Efficiency

Savings-Investment and Economic Growth Nexus in Nigeria (Published)

Nigeria as a developing nation needs adequate savings to encourage investment and promote economic growth. Empirically, this work has made an attempt to analyze the impact of savings and investment on the growth of the Nigerian economy. From the result of the study conducted within the period 1970 to 2015, using a battery of contemporary econometric approach involving unit root test, co-integration test and error correction model it was found that factors such as Gross Domestic Savings (GDS), Gross Fixed Capital Formation (GFCF), Labour Force (LAF) and Savings Facility (SF) are the main drivers of economic growth in Nigeria. Furthermore, evidence from the investment model shows that Real Gross Domestic Product and Gross Domestic Savings (GDS) are the two drivers of Investment in Nigeria. This means that if there is proper capital accumulation in the form of savings, investment would be great and sustainable. The multiplier effect is on the well-being of the people through increased capital and output. The study recommended among others that; the government through the Central Bank of Nigeria (CBN) should ensure the reduction of reserve requirements of commercial banks in order to make available adequate funds in form of loans and advances for investment which will boost economic growth. Government should always maintain a good political atmosphere that is devoid of political upheavals because insecurity in the country has contributed immensely to the discouragement of the people from the cultivation of banking habit. More so, foreign direct investment will be discouraged in an environment ravaged with rancor. Banks should be encouraged to establish branches in the rural areas to discourage the rural dwellers from saving in their local saving boxes. This will bridge the gap between savings and investment. The government of Nigeria has a role to play by making policies that would encourage the spread of banks. This would be done by upgrading the standard of the Nigerian banking sector.   Labour force has been revealed to be a positive growth stimulant in the study. Thus, government and the private sector should ensure that there is realistic and practical curriculum development in schools that will evolve a more productive labour force. Finally, the Governor of the apex bank (CBN) and monetary policy committee should liaise with the necessary operators to ensure that there are realistic interest and inflation rates that will stimulate economic activities and bring about the requisite economic growth in Nigeria.

Keywords: Co-integration, Investment, Nigeria, Savings, economic growth

Financial Liberalization and Domestic Savings in Nigeria: An Empirical Analysis (Published)

One of the reasons for financial liberalization is to adequately mobilize domestic savings in developing countries. Hence, this study investigated the existing relationship between financial liberalization and domestic savings in Nigeria. In achieving this, contemporary econometric approach involving unit root test, co-integration test and error correction model was adopted to analyze the time series data from 1970 to 2015. The study used interest rate spread and financial liberalization index as measures of financial liberalization. It used credit to the private sector over GDP and the number of bank branches over the population to measure financial deepening and financial inclusion respectively. The findings revealed that per capita income and financial deepening were the two factors that affected domestic savings in Nigeria significantly as against interest rate which was widely viewed as the major factor affecting savings mobilization in Less Developed Countries. The study recommended increase in the existing level of per capita income which could be achieved by upward review of wages and salaries of workers every three years. Monetary authorities should use moral suasion to encourage microfinance banks and commercial banks to establish branches in rural areas to help further reduce the population of unbanked Nigerians and ensure greater financial deepening. Monetary authority should ensure that interest rate is determined by market forces to reflect the true depth of the Nigerian financial system and thereby reduce the interest rate spread. The sustenance of CBN autonomy was equally recommended as a key to ensuring financial system stability

Keywords: Domestic Savings, Financial Inclusion, Financial Liberalization, Financial deepening, Nigeria

Institutional Impediments to International Remittance: Transmission-Cost Issues in Nigeria (Published)

This study investigates the institutional impediments of remittances with reference to the cost of transmission in Nigeria. The study is motivated by the increasing inflows of remittances through informal channels that would have been directed into the financial system to improve savings and enhance financial deepening if they were accounted for. The study therefore investigates whether the use of informal channels is caused by the increasing costs of collecting remittances that is partly induced by financial institutions. The study uses a bank exit survey data and a household survey data collected by the Center for Demographic and Allied Research (CDAR). T-test analysis and logit regressions were employed to achieve the objectives of the research. The findings show that there is no significant difference in the frequency of receipt for the formal and informal channels, transaction cost negatively and significantly determinants the use of formal channels flows, and finally there exist a significant difference between the transaction costs of using formal and informal channels of remittances. Financial institutions should therefore checkmate the charge of remittance receipt to encourage the use of formal channels and increase the frequency of flows

Keywords: Impediment, Institutional, Nigeria, Remittances, Transmission-Cost

Hindrances to Microfinancing: A Nigerian Case Study (Published)

Traditionally, commercial banks lend money to large, credit-worthy corporations and avoid doing business with small and medium enterprises due to the associated risks and costs. These small and medium enterprises depend on microfinance banks to obtain loans for their businesses, but for some reasons, some of these businesses do not approach microfinance banks for loans. This research investigates reasons why some businesses do not apply for loans from microfinance banks even though they need funds for the efficient running of their business. Results show that lack of collateral, ignorance of businesses about the existence of microfinance banks, and high interest rates are the main reasons that are hindering businesses in applying for loans from microfinance banks. Microfinance banks need to reach out to economically active poor businesses that cannot obtain loans from commercial banks or other financial institution.

Keywords: Business, Enterprise, Entrepreneur, Loans, Microfinance, Nigeria