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
Accelerating Inclusive Agricultural Growth in Nigeria: An Examination of Strategic Issues, Challenges and Policy Options (Published)
Agriculture has been identified as a critical sector with huge potential for promoting inclusive growth by stimulating economic growth, reducing poverty, and creating employment for a large number of people in developing countries. Against this backdrop, the paper assessed the sector’s potential in accelerating sustainable broad-based growth and examined key strategies for realizing inclusive agricultural growth in Nigeria. Using data, covering 1981-2015, the results indicate agriculture’s significant contribution to economic growth which is a necessary (but not sufficient) condition for achieving inclusive growth. Results of employment elasticity computed for the three major sectors suggested that agriculture led others (1.88) followed by services sector (1.18) and industry (0.33) in contributing to employment. Based on the analysis, the paper recommended policies such as increased public investment, access to farm inputs, youth-friendly and price stabilization programmes in order to accelerate inclusive growth in the agriculture sector.
Keywords: Agriculture, Inclusive Growth, Nigeria
Tax Buoyancy and Elasticity in Nigeria: The Case of Aggregate Tax (Published)
This study was motivated by the growing demand for government funds to meet up with their expenditures as well as diversification for different streams of income. Empirical evidence has shown that the buoyancy and elasticity of tax are two clear ways of measuring how tax revenue responds to changes in income. This study adopted secondary data sets, which were sourced from CBN statistical Bulletin, National Bureau of statistics (NBS) and Federal Inland Revenue Service (FIRS) of Nigeria. A standard multiple regression estimation procedure in the form of the vector error correction model (VECM) model was adopted. The result from the study showed that tax revenue is significantly buoyant and elastic in Nigeria. In view of the result the study recommended among others that, the government introduces policies that will help her take advantage of the potentials inherent in the country and increase its tax revenue thereby having another source of financing its budget other than the current crude oil proceeds.
Keywords: GDP, Nigeria, Tax Buoyancy, Tax Elasticity, Tax Revenue
Inflation and Growth Nexus in Nigeria: An Investigation into the Simultaneous Relationship (Published)
The relationship between inflation and economic growth remains an unresolved debate in empirical research. Its relevance in understanding growth behavior however remains pertinent. It is in this light that this study seeks to understand inflation and growth nexus in Nigeria. The study employs a two stage least square estimation to examine a simultaneous equation model with data from the Central Bank of Nigeria Statistical Bulletin and World Bank Indicators. The study shows that inflation is beneficial to growth though not significantly while growth is significantly beneficial to inflation; given the positive relationship between inflation and growth and the negative relationship between growth and inflation. The results further show that Money supply and trade openness are significant determinants of real GDP for all three estimation techniques under consideration. While, real GDP, money supply and interest rate are significant determinants of inflation. The study therefore recommends that inflation be controlled to have its optimal effect on output while production be diversified to optimize its effect on inflation.
Keywords: Inflation, Nigeria, Simultaneous Relationship, economic growth
Ecotourism Potential of Ebonyi State, Nigeria: Assessing Ecological Sites, Cultural Resources and Attitudes of Host-Communities (Published)
This study was undertaken to assess ecotourism potential of Ebonyi State, South East Nigeria. Twenty-four (24) ecological sites across the 3 ecological zones of the State and the local communities were purposively selected for the study. Twenty (20) community opinion leaders were purposively selected from each local community making 300 respondents. Focus Group Discussions were also held among various groups of adult males, females and youths. Primary data were collected by the use of interview schedule while secondary data were sourced from publications of the Federal Ministry of Culture and Tourism and Ebonyi State Economic Empowerment and Development Strategy. Data were analyzed by the use of descriptive and inferential statistics including mean scores from 4-point Likert-type scales and probit analysis. Result shows that ecological attractions in the State range from salt and fresh water lakes to beaches, waterfalls, hills, rock formations, caves and forests. There are also 20 identifiable fun-filled festivals celebrated all year round in the State. Furthermore, the socio-cultural environments of host communities were found to be supportive of ecotourism development and various host communities were willing to cooperate to develop ecotourism cluster. Governments at state and local levels are advised to ensure availability and functionality of socio-economic infrastructure in host communities. NGOs and Community Development Associations (CDAs) should strengthen advocacy to dismantle some cultural barriers that tend to exclude women from participation in some aspects of ecotourism development.
Keywords: Cultural festivals, Ebonyi State, Ecological sites, Ecotourism, Host-communities, Nigeria
INVESTIGATION INTO THE INFLUENCES OF GOVERNANCE FAILURE, CORRUPTION, VIOLENCE AND OTHER IMPORTANT ISSUES, IN THE CHALLENGES OF THE SOCIO-ECONOMIC ENVIRONMENT OF NIGERIA (Published)
As a follow-up to an earlier paper on the socio-economic environment of Nigeria, in which a large number of challenges are highlighted for this socio-economic environment, this investigation is carried out, to find out the extent to which the issues of governance failure, corruption, violence and a number of other issues, are implicated in these challenges. The investigation reveals that the trio of governance failure, corruption and violence, are greatly implicated in the challenges. A large number of other important issues, such as deficit in values, deficit in education and deficit in appropriate attitudes, are also implicated to a lesser extent, in the challenges. The paper is concluded with a recommendation that all these issues need to be urgently attended to, if Nigeria is to attain sustainable development, within the first quarter of this century.
Keywords: Challenges, Corruption, Governance Failure, Nigeria, Socio-Economic Environment, Violence
TAX BUOYANCY AND ELASTICITY IN NIGERIA: THE CASE OF AGGREGATE TAX (Review Completed - Accepted)
This study was motivated by the growing demand for government funds to meet up with their expenditures. Empirical evidence has shown that the buoyancy and elasticity of tax are two clear ways of measuring how tax revenue responds to changes in income. This study adopted secondary data sets, which were sourced from CBN statistical Bulletin, National Bureau of statistics (NBS) and Federal Inland Revenue Service (FIRS) of Nigeria. A standard multiple regression estimation procedure in the form of the vector error correction model (VECM) model was adopted. The result from the study showed that tax revenue is significantly buoyant and elastic. In view of the result the study recommended among others that, the government introduces policies that will help her take advantage of the potentials inherent in the country and increase its tax revenue thereby having another source of financing its budget away from the current crude oil.
Keywords: GDP, Nigeria, Tax Buoyancy, Tax Elasticity, Tax Revenue