Interest Rate Dynamics and Its Impact on the Performance of the Manufacturing Sub-Sector in Nigeria (Published)
The major focus of the research is to empirically investigate the impact of interest rate dynamics on performance of manufacturing- sub sector in Nigeria. The research covers the period between 1980 and 2019. This period is important since it includes the pre-structural adjustment programme (SAP) era where interest rate was not liberalized and the structural adjustment programme period where interest rate is liberalized. The cointegration technique with its implied error correction mechanism was used for the study. The result shows that the high interest rate in Nigeria has hindered the performance of the manufacturing sub sector. The GARCH and ARCH results indicates that interest rate dynamics has influenced the performance of the manufacturing sub- sector. The result also confirms a long run relationship among the variables. It was therefore recommended amongst others, that there should be a drastic reduction in the interest rate coupled with the adoption of liberalized interest rate regime with some caution; this will increase the performance of the manufacturing sub- sector in Nigeria.
This study examined the relationship between money market and economic growth in Nigeria. The study adopted money market instruments such as treasury bills (TBs), commercial papers (CPs) and bankers’ acceptances (BAs) as proxy for money market (independent variables), and gross domestic product (GDP) as proxy for economic growth (the dependent variable). Secondary time series data for the variables were collected from CBN Statistical Bulletin and the National Bureau of Statistics for the period 1989-2014. The study employed econometric techniques such as ADF, Unit Root Test, OLS, multiple regression and Granger Causality Test to analysed the study data; and found strong evidence that TBs, and CPs had positive and significant influence on GDP, while BAs had positive but insignificant influence on GDP in Nigeria. The granger causality test result revealed no directional causality relationship between TBs and GDP, meaning that TBs does not granger cause GDP and vice-versa. There was also no directional causality relationship between CPs and GDP, BAs and GDP. However, there exists bi-directional relationship running from CPs to TBs and BAs as it was established at 5 per cent level of significance. The study recommended among others that for the money market to influence meaningful economic growth and development in Nigeria, appropriate policies should be employed to strengthen and deepen the market.