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1
Idowu, Onanuga, Ilo Bamidele, and Lucas Elumah. "Monetary and Fiscal Policies Interactions on Stock Returns in Nigeria." Binus Business Review 11, no. 1 (March 31, 2020): 17–24. http://dx.doi.org/10.21512/bbr.v11i1.6082.
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This research examined the effects of monetary and fiscal policies on stock returns in Nigeria. The researchers utilized ex-post facto research design using the time series data of the annual market values of All Share Index (ASI) of the Nigerian Stock Exchange (NSE). It was yearly data on the various monetary policy and fiscal policy variables obtained from the Central Bank of Nigeria Statistical Bulletins covering from 1985 to 2017. The result of the cointegration test reveals a long-run relationship between monetary variables and stock returns. Meanwhile, the overall result shows that monetary policy has a significant effect on stock return. However, there is no long-run relationship between fiscal policy variables and stock returns. Meanwhile, the result of the Unrestricted Vector Autoregression model shows that fiscal policy has a significant effect on stock prices in Nigeria. On the other hand, a long-run relationship exists between monetary policy, fiscal policy, and stock returns. It has a significant effect on stock returns in Nigeria. This implies that monetary and fiscal policies have a significant effect on stock returns in Nigeria. It is recommended that there is a need for the federal government to harmonize fiscal and monetary policies in the same direction and to equally design policies that promote a free market for the growth of the Nigerian economy.
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Tule, Moses K., Taiwo Ajilore, and Augustine Ujunwa. "Monetary Policy Contagion in the West African Monetary Zone." Foreign Trade Review 54, no. 4 (November 2019): 375–98. http://dx.doi.org/10.1177/0015732519874219.
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The study utilized quarterly time series data for Nigeria and three selected West African Monetary Zone (WAMZ) countries for the period 1980–2016 to verify whether monetary policy shocks emanating from Nigeria are an important source of macroeconomic fluctuations in WAMZ economies. The study complemented the Global vector autoregressive method with the Diebold–Yilmaz (2009) connectedness weights computation for the analysis. Inferences from generalized impulse response function (GIRF) analysis indicated that an unanticipated Nigerian monetary policy shock depreciates the Nigeria–USA exchange rate, stimulates growth, decelerates inflation and expands the money stock in the short run for Nigeria. In Ghana, Nigeria’s monetary policy shocks similarly depreciates the exchange rate, slows growth with high inflationary impact in the short run. In the Gambia, unanticipated shocks emanating from Nigeria strengthens the Gambia–USA exchange rate, depresses growth and inflationary pressures. Sierra Leone shares the appreciation of its currency with the Gambia, in addition to an economic expansion and rising inflation. Money supply also increases to accommodate the expanding demand. These results validated the thesis that there exist considerable geographical linkages within the WAMZ regions through which macroeconomic fluctuations are transmitted. For policy, monetary authorities in the region should collectively address the question of how to stabilize the economy in response to monetary policy shocks emanating from Nigeria. JEL Codes: E52, E32, E65, F02
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Omankhanlen, Alex Ehimare. "The Effect of Monetary Policy on the Nigerian Deposit Money Bank System." International Journal of Sustainable Economies Management 3, no. 1 (January 2014): 39–52. http://dx.doi.org/10.4018/ijsem.2014010104.
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This study investigates the effect of monetary policy on the Nigerian Deposit Money Bank (DMB) System. The Nigerian banking system is currently under-going a series of reforms in order to enhance its competitiveness and efficiency. The Ordinary Least Square (OLS) method is used to examine the effect of monetary policy on the Nigerian Deposit Money Bank System, using such variables as total loans and advances (TLA) as dependent variable and liquidity ratio (LR),cash reserve ratio (CRR), monetary policy rate (MPR), and average exchange rate (AER) as independent variables. The result of the findings shows that monetary policy rate reveal the most significant effect on commercial banks loans and advances during the period under study. The study thus recommends, among others, that the regulatory authority Central Bank of Nigeria should create credit procedures, policies and analytical capabilities which should be entrenched in the credit management of DMB's operations.
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E.A., Uju, and Ugochukwu P.O. "Effect of Monetary Policy on Industrial Growth in Nigeria." International Journal of Entrepreneurship and Business Innovation 4, no. 1 (June 7, 2021): 47–60. http://dx.doi.org/10.52589/ijebi-1z4iybye.
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Monetary policy is one of the regulatory measures of the government to checkmate the money supply in the economy in order to achieve the desired level of prices, employment, output, and boost the industrial sector growth. Industrialization has always constituted a major focus of development strategy and government policy. One of the engines of industrialization is enhancing manufacturing sector capacity; this study adopted manufacturing sector output to examine the effect of monetary policy on industrial growth in Nigeria between 1986 and 2019. Data for the study were collected from the CBN Statistical bulletin, 2019 edition. A multiple regression model was developed and the Ordinary Least Square (OLS) regression technique employed for data analysis. The results showed that Open Market Operation (OMO) measured by Treasury bill rate had positive and significant effect on the Nigerian Manufacturing Domestic Sector Gross Product; Cash Reserve Ratio (CRR) has a positive and significant effect on the Nigerian Manufacturing Sector Gross Domestic Product; and Monetary Policy Rate (MPR) has a negative and significant effect on the Nigerian Manufacturing Sector Gross Domestic Product. The study concludes that monetary policy is a veritable tool for enhancing industrial sector growth in Nigeria. It was recommended that the monetary authority should ensure a lower MPR that can drive up investment and thus boost growth of the industry.
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Omolade, Adeleke, Philip Nwosa, and Harold Ngalawa. "Monetary Transmission Channel, Oil Price Shock and the Manufacturing Sector in Nigeria." Folia Oeconomica Stetinensia 19, no. 1 (June 1, 2019): 89–113. http://dx.doi.org/10.2478/foli-2019-0007.
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Abstract Research background: The need for diversification of the Nigerian economy has been emphasized and the manufacturing sector has a major role in this. Being an oil producing country, monetary policy is an important macroeconomic policy that has always been used to manage the influence of oil price shock on the manufacturing sector. Purpose: The study examines the relationship between oil price shock, the monetary transmission mechanism and manufacturing output growth in Nigeria. Research methodology: The study applied the structural vector auto regression (SVAR) modelling technique and a descriptive analysis. Results: The results of the study show that the exchange rate is mostly affected by the oil price shock, while the monetary policy instruments and inflation rate are also very responsive to the exchange rate shock. The manufacturing sector output growth has also been shown to be strongly affected by the inflation rate and monetary policy shocks. Novelty: The study has revealed the most effective channel via which oil price shocks affect manufacturing output. The exchange rate channel of the monetary policy transmission mechanism is the most significant channel through which oil price shock affects manufacturing output growth in Nigeria. This shows that effective management of the exchange rate policy via the appropriate monetary policy approach can be used to minimize the adverse effect of oil price shocks on Nigerian manufacturing output.
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UFOEZE, Lawrence Olisaemeka, J. C. ODIMGBE, V. N. EZEABALISI, and Udoka Bernard ALAJEKWU. "EFFECT OF MONETARY POLICY ON ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL INVESTIGATION." Annals of Spiru Haret University. Economic Series 18, no. 1 (March 30, 2018): 123–40. http://dx.doi.org/10.26458/1815.
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The study investigated effect of monetary policy on economic growth in Nigeria. The natural log of the GDP was used as the dependent variables against the explanatory monetary policy variables: monetary policy rate, money supply, exchange rate, lending rate and investment. The time series data is the market controlled period covering 1986 to 2016. The study adopted an Ordinary Least Squared technique and also conducted the unit root and co-integration tests. The study showed that long run relationship exists among the variables. Also, the core finding of this study showed that monetary policy rate, interest rate, and investment have insignificant positive effect on economic growth in Nigeria. Money supply however has significant positive effect on growth in Nigeria. Exchange rate has significant negative effect on GDP in Nigeria. Money supply and investment granger cause economic growth, while economic growth causes interest rate in Nigeria. On the overall, monetary policy explain 98% of the changes in economic growth in Nigeria. Thus, the study concluded that monetary policy can be effectively used to control Nigerian economy and thus a veritable tool for price stability and improve output.
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Chukwudi, Oparah Felix, and James Tumba Henry. "Monetary Policy and Financial Stability in the Nigerian Banking Industry." International Journal of Financial Research 11, no. 1 (October 10, 2019): 82. http://dx.doi.org/10.5430/ijfr.v11n1p82.
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This study examined the impact of monetary policy on financial stability in the Nigerian banking industry for the period 2008Q1 to 2016Q2, using an error correction model. Banking industry financial stability index (BIFSI) was computed within the study and was used as a measure of financial stability in the Nigerian banking industry. The study discovered that the impact of monetary policy on financial stability in the Nigerian banking industry was weak. It also revealed a significant long run equilibrium relationship between monetary policy and financial stability in the Nigerian banking industry with a speed of adjustment to long run equilibrium of 66.54%. It was concluded that open market operation and exchange rate channels are more effective channels of transmitting monetary policy to financial stability in the banking industry, than interest rate channel.
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Olusola, Ayinde Taofeek. "Policy lags and exchange rate dynamics in Nigeria: Any evidence?" Jurnal Ekonomi Pembangunan 18, no. 1 (July 12, 2020): 1–12. http://dx.doi.org/10.29259/jep.v18i1.9688.
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The study investigates policy lags and exchange rate dynamics in Nigeria. The downswing in the Nigerian economy attributed to recurring exchange rate fluctuations justifies this empirical investigation. The period of investigation spans 1970 – 2016 and the data were obtained from the various issues of the Central Bank of Nigeria (CBN) Statistical Bulletin and the Annual Statistics of the National Bureau of Statistics (NBS). Anchored on the monetary theory of exchange rate, the Markov-Switching Dynamic Regression (MSDR) was employed as the technique of analysis. The findings show that the supply of broad money in Nigeria is endogenous in nature as it serves as the adjustment variable for the stabilization of exchange rate in the economy. Also, the results obtained indicated that changes in the exchange rate affect the overall government income and that the Nigerian economy is still foreign dependent. An expansionary monetary policy takes three (3) years to stabilize exchange rate in Nigeria while an expansionary fiscal policy only takes one and a half (11/2) years. By implication, monetary policy is half-effective as the fiscal policy. Besides, there is evidence of fiscal dominance in Nigeria. The study found two exchange regimes of fixed- and managed-float. More so, fixed exchange rate regime in Nigeria was just not persistent but that the probability of transiting to a managed-float regime was relatively lower.
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Ademokoya, Alade Ayodeji, Mubaraq Sanni, Lukman Adebayo Oke, and Segun Abogun. "Impact of Monetary Policy on Bank Credit in Nigeria." Journal of Accounting Research, Organization and Economics 3, no. 3 (December 28, 2020): 196–205. http://dx.doi.org/10.24815/jaroe.v3i3.17879.
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Objective – The aim of this study is to examine the impact of monetary policy on credit creation ability of banks in Nigeria. Specifically, it investigates the impact of monetary policy rate, money supply, liquidity ratio, and change in maximum lending rate on bank credit in Nigeria. Design/methodology – A monthly time series data from 2007-2019 were sourced from the Central Bank’s of Nigeria statistical bulletin. The sourced data was subjected to multiple regression analysis using the fully modified ordinary least square regression to estimate the parameters of the model. Results – Findings reveal that money supply significantly and positively influence bank credit in Nigeria; while liquidity ratio significantly but negatively influence bank credit in Nigeria. On the contrary, monetary policy rate and maximum lending rate were found not to significantly affect bank credit in the case of Nigeria.Policy Recommendation - Study therefore, recommend that monetary authorities especially, the Central Bank of Nigeria should pay more attention to lowering the liquidity ratio while increasing money supply in order to engender banks credit creation ability and further stimulate the Nigerian economy for growth.
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Babangida, Jamilu S., and Asad-Ul I. Khan. "Effect of Monetary Policy on the Nigerian Stock Market: A Smooth Transition Autoregressive Approach." Central Bank of Nigeria Journal of Applied Statistics 12, No. 1 (August 16, 2021): 1–21. http://dx.doi.org/10.33429/cjas.12121.1/6.
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This paper examines the nonlinear effect of monetary policy decisions on the performance of the Nigerian Stock Exchange market, by employing the Smooth Transition Autoregressive (STAR) model on monthly data from 2013 M4 to 2019 M12 for All Share Index and monetary policy instrument. This study considers the two regimes characterizing the stock market, which are the lower regime (the bear market) and the upper regime (the bull market). The results show evidence of nonlinear effect of monetary policy on the stock exchange market. Monetary policy rate, money supply, lagged monetary policy rate and lagged treasury bill rate are found to have significant positive effects on the stock exchange market in the lower regime while current treasury bill rate shows a negative effect. In the upper regime, money supply and lagged treasury bill rate have significant negative effect on the stock market. The current treasury bill rate is found to have a positive effect on the stock exchange market. It is recommended that the Central Bank of Nigeria should maintain a stable money supply growth that is consistent with increased activities in the Nigerian stock market.
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Ogbonna, Udochukwu Godfrey, and Chukwu Agwu Ejem. "Do Monetary Policy Instruments Influence Capital Market Returns in Nigeria?" American Finance & Banking Review 5, no. 1 (May 6, 2020): 50–61. http://dx.doi.org/10.46281/amfbr.v5i1.562.
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This study concisely examined the relationship between monetary policy variables and performance of the Nigerian Capital Market, analyzed with appropriate econometric tools. After the analysis, the outputs revealed the following; the entire monetary policy variables employed only monetary policy rate has significant relationship with the performance of the capital market in Nigeria. It was also found that the previous information about the all share index has the capacity to predict future returns in capital market in Nigeria. On this note, the researchers are of the opinion to embark on prompt disclosure of the daily all share indexes by regulatory authorities, thereby refurbishing the efficiency of the Nigeria Capital Market. It is also suggested to adopt alternative means of disclosure apart from the national television stations and national daily newspapers because of our technological know-how in Nigeria.
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Agwu, Ejem, Chukwu, and Ogbonna, Udochukwu Godfrey. "Response of Deposit Money Banks to Monetary Policy Dynamics in Nigeria." Applied Economics and Finance 7, no. 4 (May 8, 2020): 33. http://dx.doi.org/10.11114/aef.v7i4.4847.
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This study examined how banks react to the monetary policies transmission mechanisms of the central bank of Nigeria. The data employed were collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria and subjected to various finametric techniques. The major findings are that cash reserve ratio negatively and significantly affects the performance of deposit money banks in Nigeria, while other monetary policy variables exert insignificantly to the performance of deposit money banks. It was also found that apart from banks own shock; banks respond negatively to shocks from major monetary policy instruments. It was observed that Monetary Policy Rate causes bank performance in both in the short run and long run. While, Cash Reserve Ratio, Liquidity Ratio and Saving Deposit Rate do not cause bank performance in the short run but in the long run. It was also found that monetary policy instruments jointly cause bank performance in the short and long run as opposed by individual instruments in Nigeria. The researchers therefore suggest among others that central bank of Nigeria reduce the cash reserve ratio to enable deposit money banks extend more loans to their potential customers, thereby enhance performance.
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Maku, Olukayode Emmanuel, Afeez Taiwo Tella, and Akinola Christopher Fagbohun. "Alleviating Poverty in Nigeria: Keynesian Vs Monetary Theory of Poverty." Studia Universitatis „Vasile Goldis” Arad – Economics Series 30, no. 1 (March 1, 2020): 103–20. http://dx.doi.org/10.2478/sues-2020-0007.
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AbstractThis study comparatively investigates the impacts of fiscal and monetary policies on poverty in Nigeria from 1986 to 2018. Using the Ordinary Least Square and Standardized or Beta Coefficient approach, we found that the Nigerian political system plays a vital role on a large number of its citizens living in extreme poverty. Other factors identified as the likely causes of poverty are insurgencies, terrorism, and low productivity among others. Also, monetary policy is more important in alleviating poverty than the fiscal policy which favored the monetary school arguments. Specifically, monetary measures like exchange rate and interest rate are more significant in alleviating poverty far more than inflation rate while fiscal measures proxy with government recurrent expenditure plays a more vital role in alleviating poverty in Nigeria than others like government capital expenditure and government recurrent expenditure. The study recommended that in the case of monetary measures, there is a need for Government through the Central Bank of Nigeria, to shift their attention towards key monetary policy measures like interest rate and exchange rate compare to other monetary measures.
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Danlami, Ibrahim Abdulhami, Mohamad Helmi Hidthiir, and Sallahuddin Hassan. "Tackling inflation in Nigeria: Monetary or fiscal policy? An empirical assessment of the effectiveness of the simultaneous implementation of the policies." Vol 12 No 1 (2020) 1, Number 1 (June 30, 2020): 26–45. http://dx.doi.org/10.32890/gbmr2020.12.1.2.
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The study is aimed at empirically assessing between monetary policy and fiscal policy, the most effective in combating and tackling inflation in Nigeria, especially when implemented simultaneously – the effect of the concurrent implementation of the two policies on inflation. The variables of the policies are based on market information, money market equilibrium (LM Curve) for monetary policy, and product market equilibrium (IS Curve) for fiscal policy. The research makes use of the Autoregressive Distributed Lag Model (ARDL). Data for Nigerian was used from 1970 – 2016. The findings show that monetary and fiscal policies can be implemented concurrently as monetary policy is the best for a short-run solution during the fiscal policy for a long-run solution. The findings of the study are based on Nigerian data utilized for the period 1970 – 2016 and the method of data analysis adopted – ARDL, as well as variables selection based on the general equilibrium of money and product market. The findings of the study clearly show that monetary and fiscal policies can be used simultaneously to tackle inflation in Nigeria successfully, being effective in combating inflation in different periods (short-run or long-run). The study attempted to harmonize the incompatible theories and their policies to see whether the policies can be utilized concurrently since the policies are aimed at effecting price stability. The research’s findings confirm the feasibility of implementing the two policies concurrently and their effects to be felt or realized in different periods – short-runs and long-runs.
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Eromosele, Harrison Ogbeide, and David Umoru. "DO FISCAL AND MONETARY POLICIES COOPERATE OR CONFLICT WITH EACH OTHER IN NIGERIAN ECONOMY?" SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS 3, no. 1 (March 26, 2019): 15. http://dx.doi.org/10.29259/sijdeb.v3i1.15-30.
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The determination for this study was to ascertain if fiscal and monetary policies are cooperating or rather conflicting with each other in Nigerian economy. Government disbursement and growth of money stock were used to denote fiscal and monetary policy variables. Two reduced form equations of monetary and fiscal policies were specified from underlying structural model. This yielded fourteen RF parameters in contrast to eleven structural parameters and so we had system of over-identification. These prompted use of IV estimators such as GMM and 3SLS. Estimates show similar findings for both estimators as we found evidence that fiscal policy does not respond favourably to monetary policy as monetary policy was found to have an insignificant effect on the fiscal policy. More so, fiscal policy does not respond to lag effect of monetary policy. Relatively, monetary policy responds favourably to fiscal policy. The lag effect of money supply was also found to have a significant impact on money supply. Empirical finding so upholds that Nigerian economy is fiscally overriding notwithstanding money being an integral part of all macroeconomic variables. Significance of lag effects of both fiscal and monetary policy is reflection that implementation process of both policies is excessively time overshadowing. Consequently, there is need for building well-organized units of fiscal and monetary authorities that can accelerate implementation process of these policies.
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Waleru, Akani, Henry, and Oparaordu, Beauty. "Determinants of Commercial Banks Credit to the Domestic Economy in Nigeria: Examinations of Dynamics Principles." Indian Journal of Finance and Banking 2, no. 2 (August 8, 2018): 26–41. http://dx.doi.org/10.46281/ijfb.v2i2.96.
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This study examined determinants of commercial banks credit to the domestic economy in Nigeria. The objective was to examine the extent to which banks variables, macroeconomic and monetary policy variables affects credit allocation of Nigerian Commercial Banks. Time series data was sourced from Central Bank of Nigeria Statistical bulletin and financial statement of commercial banks. Percentage of total commercial banks loans to gross domestic product was proxy for dependent variable while the banks specific variables are peroxide by operational efficiency, liquidity, number of commercial banks branches, Commercial Banks Deposit Liabilities and deposit rate. The independent variables in macroeconomic model comprises of real gross domestic product, public expenditure, openness of the economy, inflation rate and exchange rate while monetary policy variables comprises of treasury bills rate, real interest rate, monetary policy rate, growth of money supply and financial sector development. The study employed ordinary least square properties of augmented Dickey Fuller test, co-integration test, and granger causality test and vector error correction model. Findings from the study revealed that; banks specific variables shows that deposit liabilities and liquidity ratio have positive impact on total loans and advances while deposit rate, number of commercial banks branches and openness of the economy have negative impact. Model II found that; exchange rate, inflation rate and Real Gross Domestic Product have positive impact while public expenditure and openness of the economy have negative impact on total commercial bank loans and advances. Model III found that; financial sector development and monetary policy rate have negative impact while growth of money supply, real interest rate and Treasury bills rate have positive impact on total loans and advances of commercial banks. We conclude that monetary policy, bank specific variables or internal variables and macroeconomic variables are strong determinants of Nigerian commercial banks loans and advances. We therefore, recommend for the interplay and the strengthening of macroeconomic variables, monetary policy variables and banks specific variables (internal policies) in order to enhance commercial banks credit in Nigeria.
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Ejiogu, Amanze, Obiora Okechukwu, and Chibuzo Ejiogu. "Nigerian budgetary response to the COVID-19 pandemic and its shrinking fiscal space: financial sustainability, employment, social inequality and business implications." Journal of Public Budgeting, Accounting & Financial Management 32, no. 5 (September 15, 2020): 919–28. http://dx.doi.org/10.1108/jpbafm-07-2020-0101.
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PurposeThis article aims to explore the Nigerian government's budgetary response to the COVID-19 pandemic as well as the economic and social implications of the pandemic response.Design/methodology/approachOur analysis is based on a review of secondary evidence such as Nigerian Federal Government budget documents, policy documents, Central Bank of Nigeria circulars, news media articles, World Bank and International Monetary Fund reports, reports from Big Four accounting firms and policy think-tanks.FindingsThe authors highlight how increased borrowing to fund COVID-19 related economic and social interventions have significantly squeezed Nigeria's fiscal space. The authors also highlight that while some interventions provide short-term economic relief to the poor and small businesses, other interventions and gaps in the policy response have the potential for significant negative impact on businesses, households and unemployment. In addition, the authors highlight the potential for long-term benefits to the health sector and for private sector engagement in corporate responsibility and philanthropy.Originality/valueThe authors present a comprehensive account of the Nigerian government's budgetary response to the COVID 19 pandemic and the economic and social implications of this response.
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Olomu, Michael Oluwaseun, Moses Clinton Ekperiware, and Taiwo Akinlo. "Agricultural sector value chain and government policy in Nigeria: issues, challenges and prospects." African Journal of Economic and Management Studies 11, no. 3 (March 16, 2020): 525–38. http://dx.doi.org/10.1108/ajems-03-2019-0103.
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PurposeThis paper systematically reviewed the contributions of the recent Nigerian government agricultural policies and the impacts on the agricultural value chain system in line with the structural transformation of the sector and the Nigeria's vision 20:2020. The study also suggest strategies to upgrading various segments of the agricultural value chain and argue that Nigeria's agricultural sector requires huge investments and innovative ideas to increase production and create value addition across the most profitable areas of the value chain.Design/methodology/approachThe authors systematically present evidences and data from the Central Bank of Nigeria (the apex monetary authority of Nigeria) and Nigerian Bureau of Statistics (oversees and publishes statistics for Nigeria) to estimate the impact of Government agricultural policies on the value chains system.FindingsThe study discovers that the various recent government policy interventions to tackle the austere challenges in the agricultural sector are yet to yield much significant solution. Given to the dwindling performance of the sector, the Nigerian agricultural value chain is somewhat affected with systemic and services gaps which underpin the market failures (missing markets and weak markets), although the agricultural value chain has the potential of triggering economic growth in a higher scale with a trickle-down effect to other sectors of the Nigerian economy.Practical implicationsOverall, the findings indicate strategies to upgrading the production and processing segments of the agricultural value chain and argues that Nigeria's agricultural sector requires huge investments and innovative ideas to increase production and create value addition across the most profitable areas of the value chain.Social implicationsThe study proves that enhancing value addition in the agricultural sector is imperative to achieving triple-benefits of increasing productivity by building resilient systems that leverage on finance opportunities, deepening economic inclusive growth and achieving great milestones.Originality/valueThis study is the first attempt to focus on agricultural value chain system in line with the structural transformation and the Nigeria's vision 20:2020.
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John Asaleye, Abiola, Olabisi Popoola, Adedoyin Isola Lawal, Adeyemi Ogundipe, and Omotola Ezenwoke. "The credit channels of monetary policy transmission: implications on output and employment in Nigeria." Banks and Bank Systems 13, no. 4 (December 21, 2018): 103–18. http://dx.doi.org/10.21511/bbs.13(4).2018.10.
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There has been an increasing trend in the unemployment rate despite the growth rate witnessed. Monetary policy is presumed as one of the ways to improve the situation. Likewise, the relationship between monetary policy and employment has generated controversial debates in the literature. Though its connection has been extensively studied, however, the implications of monetary policy in respect to time frame perspectives on employment and output have not been widely addressed in the literature. This study provides evidence on shock effects, long and short-run impacts of monetary policy transmission through the credit channels on output and employment in Nigeria within the period of 1981 to 2016 using the Structural Vector Autoregression and Autoregressive distributed lags (ARDL). Evidence from the forecast error shock showed that variations in monetary policy indicators affect output more than employment in the first two periods; however, it affects employment more afterwards. The ARDL results show no evidence of co-integration when output is used as the dependent variable; conversely, cointegration exists when employment is used as the dependent variable. The monetary policy indicators: money supply, bank deposit liability and interest rate are statistically and economically significant with employment in the long run. In the short run, money supply and interest rate are economically and statistically significant. The findings revealed that the Nigerian government can maximize the long-run benefits of monetary policy through the credit channels on employment. Hence, there is a need for policymakers to look beyond short-run gain and promote long-run employment via monetary policy among others.
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Udeaja, Elias A., Nathan P. Audu, and Titus O. Obiezue. "The Transmission Mechanism of Monetary Policy Shocks in Nigeria: The Interest and Exchange Rates Channels." Advances in Social Sciences Research Journal 7, no. 9 (September 18, 2020): 283–311. http://dx.doi.org/10.14738/assrj.79.8927.
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This paper examines the effectiveness of the interest and exchange rates channels of monetary policy transmission mechanism. The paper employed several statistical cum econometric methodology in a baseline structural vector autoregressive (SVAR) model to evaluate the influence of policy shocks on selected endogenous variables; gross domestic product (GDP), consumer price index (CPI), money supply (MS), treasury bill rate (TBR) and nominal exchange rate (NER) for Nigerian spanning 1981Q1 to 2020Q1. The contemporaneous coefficients in the structural model reveals that key monetary aggregates reacts positively to unexpected changes in the monetary policy instruments. Furthermore, the variance decomposition results indicate that shocks of the selected variables were found to be important for interest rate growth in the short and longer horizons. The exchange rate channel however appears to have a stronger impact on prices. These results mean that depreciation of the nominal exchange rate could be an external deflationary element, particularly for Nigeria.
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Oladimeji, Ebenezer O., Ebenezer Bowale, and Henry Okodua. "How Effective Is the Monetary Policy on the Real Sector in Nigeria?" Research in World Economy 11, no. 5 (September 3, 2020): 388. http://dx.doi.org/10.5430/rwe.v11n5p388.
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In the past few years, the real sector became an area of interest in scholarly and public intellectual discuss, towards a sustainable performance of the Nigerian economy. Successive governments also realized the need to diversify the economy from high dependence on oil into deepening the real sector, through monetary policy that allows more credit flow to the real sector. In a quest to reconcile the current state of the Nigerian real sector with the renewed efforts of the government and the monetary authority to revamp the sector, this study investigated the effectiveness of this process and reexamined the transmission channels, using a structural vector autoregressive econometric approach (SVAR). The results showed that the credit channel and asset price channel are the dominant monetary policy transmission channels to the real sector. However, there was a significant effect on the effectiveness of the transmission process, when credit risk was added to the model, as it revealed vital information about the behaviour of the banking system in response to monetary policy actions of the monetary authority, during the period of high credit risk/default risk. This study, therefore, recommends that monetary authorities should always consider the credit preference of the banking system and the order of transmission channels, before embarking on any monetary policy aimed at stimulating the real sector and other sectors of the economy.
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Opue, Job Agba, and B. Bankong. "Monetary Policy Adjustments under Alternative Inflationary Conditions: The Nigerian Case." Greener Journal of Social Sciences 4, no. 2 (February 20, 2014): 062–70. http://dx.doi.org/10.15580/gjss.2014.2.052713639.
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ADESINA, Julius Babatunde, Michael Barine NWIDOBIE, and Agatha Nkem AMADI. "Monetary Policy and Financial Performance of Nigerian Deposit Money Banks." Asian Economic and Financial Review 8, no. 7 (2018): 853–69. http://dx.doi.org/10.18488/journal.aefr.2018.87.853.869.
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OGOWEWO, TUNDE I., and CHIBUIKE UCHE. "(MIS)USING BANK SHARE CAPITAL AS A REGULATORY TOOL TO FORCE BANK CONSOLIDATIONS IN NIGERIA." Journal of African Law 50, no. 2 (October 2006): 161–86. http://dx.doi.org/10.1017/s0021855306000143.
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This paper is a critique of the policy-making process and the particular policy choice made by the Central Bank of Nigeria with respect to the recent increase in the minimum share capital requirement for Nigerian banks. The article questions the apparent prioritization by the Central Bank of banking supervision – important though it is – over macro-economic stability. It also draws attention to serious public law issues (breach of monetary law and abuse of power) and the private law implications (conflicts of interests, scheme of arrangement defects, and negligent valuations) of this policy-making episode and policy choice.
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Ezeibekwe, Obinna Franklin. "Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate." Economics and Business 34, no. 1 (February 1, 2020): 139–55. http://dx.doi.org/10.2478/eb-2020-0010.
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AbstractEconomic theory suggests that monetary policy can be used to stabilize an economy. However, the ability of monetary policy targets—interest rates and money supply—to stabilize an economy depends on their ability to achieve price stability. Using data from 1981 to 2018 and applying the vector error correction model, this paper seeks to determine how the changes in the inflation rate affect the ability of monetary policy tools to stabilize the Nigerian economy and stimulate investment. Empirical results suggest that the impact of the interest rates on investment depends on the level of the inflation rate. The size of the effect of interest rates on investment gets weaker as the inflation rate increases suggesting that monetary policy tools, such as the monetary policy rate (MPR), that directly change the interest rates are robust stabilization tools during periods of declining inflation rates but not relevant during periods of rising inflation rates. This is attributable to low bank lending rates. Additionally, the impact of the money supply target on investment does not depend on the level of the inflation rate. This suggests that monetary policy tools, such as open market operations, that directly change the money supply can be relevant stabilization tools during economic booms and recessions. As a result, the Central Bank of Nigeria should work to deepen the scale, capacity, and efficiency of its open market operations by ensuring that most of the people can participate with minimal transaction cost and by making different financial instruments available.
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Ikezam, Nwonodi Daniel. "Money Supply and Inflation: Disaggregated Time Series Evidence from Nigeria." American Finance & Banking Review 2, no. 1 (February 7, 2018): 52–61. http://dx.doi.org/10.46281/amfbr.v2i1.129.
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This paper examined money supply and inflation in Nigeria. The objective was to examine the extent to which components of money supply affect Nigerian inflation rate. Time series data was sourced from Central Bank of Nigeria (CBN) statistical bulletin and Stock Exchange Factbook. Nigerian Real Inflation Rate was proxy for dependent (INFR) variables while Currency in Circulation (CR), Demand Deposit (DD), Time Deposit (TD), Savings Deposit (SD) and Net Foreign Asset (NFA) were used as independent variables. The Ordinary Least Square (OLS) method of cointegration, Augmented Dickey Fuller Unit Root, Granger Causality was used as data analysis techniques. Regression result in the study shows that Currency in Circulation, Demand Deposit and Savings Deposit has negative relationship while Net Foreign Asset and Time Deposit have positive relationship with inflation. The Augmented Dickey Fuller Test proved non stationarity of the variables at level except Net Foreign Asset but stationary at first difference. The Granger Causality Test reveals no casual relationship running through the variables. The cointegration proved no long run relationship between the dependent and independent variables. The study conclude that Money Supply have significant relationship with Nigerian Inflation Rate. It therefore recommends effective management of money supply by the monetary authorities to achieve the monetary policy objectives of price stability.
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Okwuwa, Charles Onuora, Kennedy O. Ololo, Elizabeth O. Owonibi Owonibi, Emelda I. Emmanuel, and H. Juliana Dauda. "A question of addressing the real issues of the Nigerian Police operatives’ ineffectiveness for improved petormance." Advances in Social Sciences Research Journal 7, no. 8 (August 11, 2020): 68–84. http://dx.doi.org/10.14738/assrj.78.8699.
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The Nigerian Police ineffectiveness in internal security services is a national challenge. The police have been labelled unfriendly and discredited by many due to their personal experiences and media reports. Research findings indicate that with the police, Nigerians are among the worst Police victims of human rights violations in Africa, due to corruption, unlawful and prolonged detention without trials and various unprofessional conduct. This investigation explores the issues of the Nigerian Police road traffic operatives along a heavy traffic highway in North Central Nigeria that qualify their unprofessional attitudes and behaviors, with possible insights to advance knowledge for policies towards improving service delivery. We collected data from police officers of two police formations in the research area, by quantitative survey. Also from the same two locations and another location, we collected qualitative data by applying in-depth analyses of opinion leaders. We applied Herzberg’s two factor theory and observed that lack of both motivators and hygiene factors seem to be impacting the operatives negatively hence they are not motivated to operate effectively. Data suggest that the Police immediate constraints are mainly hygiene factors (monetary rewards, welfare, tools, among others) which build up frustration and predispose them to oppression and extortion of road users, reflecting the overarching corrupt environment. The results support some earlier findings that both motivators and hygiene factors, not mainly motivators, drive employee motivation and performance. Policy implications include enhanced statutory spending and overhaul of the agency structure for improved employee performance.
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Imoisi, Anthony Ilegbinosa. "Does Monetary Policy Induce Economic Growth? An Empirical Evaluation of the Nigerian Economy." SRIWIJAYA INTERNATIONAL JOURNAL OF DYNAMIC ECONOMICS AND BUSINESS 2, no. 4 (January 22, 2019): 331. http://dx.doi.org/10.29259/sijdeb.v2i4.331-346.
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Monetary and Fiscal policies are instruments which the government of any nation can employ to effectively achieve the desired growth of their respective economies. This study investigates the extent to which monetary policies can promote economic growth in Nigeria from 1980-2017. Secondary data were used from the Statistical Bulletin of the apex bank in Nigeria (CBN) and National Bureau of Statistics. Unit root test, Johansen co-integration and the vector error correction model (VECM) were employed in analyzing the data collected for this study. The result showed that approximately 62% of GDP is explained by variables in the model while 38% is accounted for and explained by other variables not included in the model but are captured by the error term. In addition, monetary policies did not have a significant impact on Nigeria’s economic growth in the short run, but significantly affected the country’s growth in the long run.
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Omodero, Cordelia Onyinyechi, Dorcas Titilayo Adetula, and Kingsley Adeyemo. "Stock Market Reaction to Monetary Policy Modifications: Evidence from an Emergent Market." Academic Journal of Interdisciplinary Studies 10, no. 3 (May 10, 2021): 59. http://dx.doi.org/10.36941/ajis-2021-0064.
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This study evaluates the stock market reaction to monetary policy modifications in an emerging market using Nigeria as a case study. Due to the crucial role the stock market plays in the global economy and finance, it becomes an attraction for most researchers and policymakers who try to find a basis for its smooth operation. This study uses data that cover a period from 1998 to 2018 to establish what the position is in recent times empirically. The data are collected on all share index, money supply, interest rate and exchange rate. The multiple regression results provide evidence that the money supply has a significant favourable influence on the all-share index. In contrast, the interest rate has an immaterial harmful effect on the stock market output. However, the result indicates that the exchange rate affects the stock market performance negatively, but the effect is insignificant. Based on these findings, the study suggests pilot test running of all monetary policy amendments by the monetary authority in the country before full implementation. The government should encourage the CBN to cut down on interest rate and avoid all policies that will lead to a crash in the Nigerian stock market.
Received: 16 October 2020 / Accepted: 12 February 2021 / Published: 10 May 2021
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Ocheni, Stephen, Moses Atakpa, and Basil C. Nwankwo. "Financial Governance and Sustainable Development in Nigeria: A Critical Review." International Journal of Learning and Development 2, no. 5 (September 5, 2012): 86. http://dx.doi.org/10.5296/ijld.v2i5.2344.
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The work is a review of the Federal Government application of fiscal and monetary policies to create the necessary healthy environment for sustainable growth and development of the Nigerian state. The review indicates that although the government of Nigeria has designed in theory good fiscal and monetary policies to facilitate sustainable growth and development of all the sectors of the economy, the practical implementation of such policies to attain the desired results has remained an illusion. The problem responsible for the great expectations not matching with the realities on ground is because of lack of budget discipline. The Nigerian government in practical terms most often than not hardly follows the implementation of her annual budget as approved by the National Assembly. Consequently, a lot of extra budgetary activities which amount to both financial and budget indiscipline are experienced in the management of the annual budgets over the years. It is therefore recommended that the Federal Government of Nigeria should maintain strict budget discipline to guarantee good financial governance which is a necessary condition for sustainable development. Keywords: Financial Governance, Sustainable Development, Money Market, Policy
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O., Saibu M. "Sectoral Output Responses to Trade Openness, Oil Price and Policy Shocks in Nigeria: A CVAR Approach." Journal of Social and Development Sciences 1, no. 2 (March 15, 2011): 48–59. http://dx.doi.org/10.22610/jsds.v1i2.627.
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This study investigated the relative effectiveness of trade and policy shocks on sectoral output growth in a small open Nigerian economy. It is a country-specific, time series study verifies whether there is difference in the effect of sectoral output response to policy shocks in Nigeria. A CVAR model was specified to assess the effects of policy shocks on real aggregate and sectoral output measures. The model included oil price shock and an interactive term of trade openness as measures of supply and external shocks to the economy. The empirical results showed that there was remarkably difference in sectoral output responses to policy distortion. The effects of monetary policy shocks were positive and significant on manufacturing, service and industrial sector while fiscal policy shock was only significant and positive on agricultural output growth. The result further showed that international oil price shock and trade openness had pronounced negative effects on both sectoral and aggregate outputs. In addition, oil and trade openness’ negative effects overwhelmed the positive effects of fiscal and monetary policy shocks. The policy implication of the finding is that the effectiveness of domestic macroeconomic policy is constrained by the external shocks from both oil price and trade openness. Thus, confirming the open economic version of policy ineffectiveness proposition of the New classical macroeconomic in Nigeria
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OZSOZ, EMRE, MUSTAPHA AKINKUNMI, ISMAIL CAGRI AY, and ADEMOLA BAMIDELE. "HOW CBN CONFRONTED THE MELTDOWN: THE GLOBAL FINANCIAL CRISIS AND THE CENTRAL BANK OF NIGERIA’S RESPONSE." Singapore Economic Review 62, no. 01 (March 2017): 147–61. http://dx.doi.org/10.1142/s0217590817400070.
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This paper provides an analysis of policy responses to the Global Financial Crisis by the Central Bank of Nigeria (CBN). Given its unique position as a major commodity exporter with a large population, Nigerian authorities utilized a mixture of policies including reductions in the monetary policy rate and capital reserve requirement, lending through the expanded discount window, money market interbank transactions guaranty and limitations on deposit money banks’ (DMBs) foreign exchange net open positions. CBN also rolled over margin loans that were extended to equity investors. As a result the country weathered the financial crisis with limited damage and recorded positive growth rates between 2008 and 2010.
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Umasom, Philip. "Money Market Instruments and Nigeria Inflation Rate: A Time Series Study." Asian Finance & Banking Review 2, no. 2 (August 10, 2018): 1–13. http://dx.doi.org/10.46281/asfbr.v2i2.11.
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This study empirically examined the effectiveness of money market instruments on Nigerian inflation rate. The objective is to investigate the existing relationship between money market instruments and Nigerian inflation rate, data was sourced from Central Bank of Nigeria statistical bulletin. Multivariate model were formulated having Inflation Rate (INFR) as the function of Percentage of Treasury Bills to Gross Domestic Product (TB/GDP), Percentage of Stabilization Securities to Gross Domestic Product (STS/GDP), Percentage of Treasury Certificate to Gross Domestic Product (TC/GDP), Percentage of Eligible Development Stock to Gross Domestic Product (EDS/GDP), Percentage of Central Bank of Nigeria Short Term Fund to Gross Domestic Product (CBNSF/GDP) and Percentage of Call Money Scheme to Gross Domestic Product (CMS/GDP). The Ordinary Least Square (OLS) properties of co integration, Augmented Dickey Fuller Unit Root, Granger Causality Test and Vector Error Correction Model (VECM) were employed to determine the relationship between the money market instruments and Nigerian inflation rate. Findings revealed that money market instruments are statistically significant in explaining variation in Nigerian inflation rate. We therefore recommend that the money market should well be structured, properly managed and its operational efficiency enhanced to achieve the monetary policy objective of price stability.
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Abusomwan, Success, and Jessy Ezebuihe. "GROSS DOMESTIC SAVINGS AND GROSS CAPITAL: WHAT MATTERS TO THEIR FORMATION IN AN ERA OF ECONOMIC RECESSION IN NIGERIA?" Oradea Journal of Business and Economics 2, no. 2 (September 2017): 45–55. http://dx.doi.org/10.47535/1991ojbe026.
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The objective of this study is to empirically investigate the long run and short run dynamic impact of interest rate and output on gross domestic savings and gross capital formation in Nigeria. Literatures, both theoretical and empirical, suggest that the rate of interest and output are the key factors influencing savings and investments. A review of factors influencing interest rates and output in Nigeria is necessitated by the recent economic downturns in Nigeria that has resulted in tight monetary policy which some commentators regard as inimical to growth. Employing Ordinary Least Squares, Co-integration, Error Correction Mechanism and Granger Causality econometric techniques on a data spanning 1981 to 2014 of the Nigerian economy sourced from the World Development Index, it was found that changes in output explains the long run and short run dynamic behaviour of gross domestic savings and gross capital formation which were used as proxies for savings and investment respectively. Whereas, a bi-causality was established between output and investment, causality flowed from output to savings in Nigeria. The research also found that interest rate is not a significant determinant of savings and investment in Nigeria in both long run and short run. It is therefore recommended that to enhance investment in a period of economic downturn in Nigeria, aggregate demand should be boosted to enhance output through vigorous pursuit of fiscal policy while implementing contractionary monetary policy to address inflationary pressures created by the increase in demand. Domestic savings will improve and gross capital formation will be sustained.
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Igbinedion, Sunday Osahon. "A RESEARCH PAPER ON MONETARY POLICY AND INFRASTRUCTURAL GROWTH: FURTHER EVIDENCE FROM NIGERIA." Advances in Social Sciences Research Journal 7, no. 11 (December 8, 2020): 467–84. http://dx.doi.org/10.14738/assrj.711.9381.
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Extant economic literature has acknowledged monetary policy as a key factor influencing infrastructural growth through different channels, such as affordable housing and efficient transportation, among others. However, in recent times, the Nigeria’s experience suggests a conflicting position on the above supposition. It is against this backdrop that this study set out to investigate the nexus between monetary policy and infrastructural growth within the Nigerian context, time series data from 1981 to 2018, and utilizing the Fully Modified Least Squares (FMOLS) estimation technique. The results show that both real interest rate and inflation rate exerted negative and statistically significant impact on infrastructural growth, while federal government capital expenditure and net official development assistance impacted positively on the level of infrastructural growth in the period under assessment. In the light of the study’s findings, the study recommends that, the monetary authority should carefully review existing lending interest rate downward to a single digit that will be investment driven particularly in the face of current global economic uncertainties occasioned by the COVID-19 pandemic that has led to the collapse of many economies across the world.
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Udah, Enang Bassey. "A dynamic macroeconomic model of the Nigerian economy with emphasis on the monetary sector." South African Journal of Economic and Management Sciences 12, no. 1 (August 12, 2011): 28–47. http://dx.doi.org/10.4102/sajems.v12i1.259.
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The dynamic nexus between money supply, fiscal deficit, inflation, output and exchange rate management has recently generated much debate in economic literature in Nigeria. To contribute to this debate, this paper uses the co-integration and error correction framework of analysis and also conducts policy simulation experiments to investigate how monetary variables interact with aggregate supply, demand and prices in order to aid stabilization policies. The results show that monetary variables and government finance are linked through government’s net indebtedness to the banking system. The simulation results show that a 20 per cent monetary squeeze would reduce the inflation rate faster than if the reduction in money supply were 10 per cent. This reduction in money supply would also lead to a reduction in output, employment and government expenditure, which may hurt the domestic economy. The paper thus concludes that there is a trade-off between higher GDP growth and inflation in Nigeria.
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Olawumi, Ojo Rufus, and Sola Ogungbenle. "A Dynamic Panel Analysis of Drivers of Output Growth in the Nigerian Manufacturing Firms." European Scientific Journal, ESJ 14, no. 19 (July 31, 2018): 222. http://dx.doi.org/10.19044/esj.2018.v14n19p222.
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Regardless of the efforts of government to revamp the manufacturing sector in Nigeria, the sub-sector has remained ineffective with dwindling output and there have been consistent fluctuations in the share of the manufacturing sub-sector to Gross Domestic Product (GDP) in Nigeria. This study therefore examines the determinants of output growth in the Nigerian formal manufacturing sub-sector. The study made use of fifty (50) formal manufacturing firms listed in the Nigerian Stock Exchange Data for the formal manufacturing firms were sourced from the Nigeria Stock Exchange (NSE) Fact Book and the Central Bank of Nigeria Statistical Bulletin 2014. The estimated models in the study were specified following the works of Sangosanya (2011). The study employed the dynamic panel data analysis (the dynamic models of the Generalized Method of Moments (GMM) and the Systemic Generalized Method of Moments (SYSGMM)) for the Nigerian formal manufacturing sub-sector. The study showed that the coefficient of operating efficiency in the GMM&SYSGMM estimate, i.e. -0.0349214 and -0.0199787 respectively showed a negative relationship between OPREF and firms’ growth. This implied that information supplied by firms about their growth indicators is at variance with their performance. This further speaks volume of the weakness of regulatory agencies to effectively monitor the performance of manufacturing firms in Nigeria. Also, the study showed that exchange rate, bank efficiency and managerial efficiency have significant positive relationship with output growth of firms. Also variables such as degree of financial development, energy infrastructural facilities and government regulations and policy have significant negative impact with output growth of firms in Nigeria. Findings revealed that all the explanatory variables identified in the study are strong determinants of firm growth in the Nigerian manufacturing sub-sector. The study recommended among others that government should formulate and implement policies that would hinder formal manufacturing firms from publishing fake report of their growth. Also, government should formulate and implement policy measures that would make imported goods more expensive and appropriate monetary policies that would make the cost of borrowing from banks (interest rate) affordable should be priotised in Nigeria.
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Agundu, Prince Umor C., and Waleru Henry Akani. "Dynamism of Monetary Transmission Mechanism in Nigeria: Interest Rate and Market Capitalization Causality Evidence." International Journal of Accounting & Finance Review 2, no. 1 (April 30, 2018): 81–91. http://dx.doi.org/10.46281/ijafr.v2i1.24.
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The potency of monetary transmission channels anchors the process by which interest rate movements and other cardinal aggregates influence critical financial fundamentals in an economy. This study, thus, examines dynamism of the monetary transmission mechanism with focus on the causality of interest rate and market capitalization in the Nigerian economy. Time series data covering a period of 36 years (1981 - 2015) were extracted from publications of monetary authorities and related agencies, including annual reports of Deposit Money Banks (DMBs) in the country. Facilitated by E-Views software, the analytical proceedings generated the required statistical outcomes in terms of coefficient of correlation (r), coefficient of determination (R2), t-statistic, and F-statistic. Granger causality test was also conducted to clearly establish the direction of causality between the focal variables. Essentially, the null hypothesis is rejected as probability of the F-statistic is less than the specified 0.05 level of significance. The granger causality test statistics run from four interest rate components to the operational capital market fundamental (with F-statistics of 5.758, 5.540, 4.209,and5.656; as well as probability values of 0.008, 0.009, 0.002, and 0.009 respectively). In view of the analytical outcomes, it is recommended that interest rate components be efficiently synergized to boost investors’ confidence and further drive monetary policy dynamics towards greater financial system vitality and sustainability in Nigeria.
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I., Ajoje. "COVID 19 & THE WORLD ECONOMY: STRATEGIES FOR ECONOMIC RECOVERY AND SUSTAINABILITY SAVINGS INTEREST RATE REVIEW IN NIGERIA." International Journal of Development Strategies in Humanities, Management and Social Sciences 10, no. 2 (December 21, 2020): 52–64. http://dx.doi.org/10.48028/iiprds/ijdshmss.v10.i2.05.
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The emergence of COVID 19 has adversely affected the global economy as it has practically shut down the global economy since its emergence. Governments of each country have taken drastic decisions in order to save its citizens from the death associated with this highly infectious disease. Such decisions include; total halt in academic, economic and social activities. This has adversely shrunk the economies as their revenue generation power dwindled with an increased expenditure on research, palliatives and sensitisation about the disease. A near collapse of the global economy has been projected towards end of 2020. In order to avert this, economic decision makers are taking different actions and policies that will reduce the shock of this disaster and also revamp the economy. This period coincides with when Nigerian economy is just recovering from the 2016 economic recession with declining per capita income as well as collapsing global oil prices. In order to recover the economy which has previously been characterised by dwindling economic indicators, the Government applied some structural changes targeted at the Medium and Small scale enterprises. To further recover the Nigerian economy, the Central Bank of Nigeria through the Monetary Policy Committee has announced a cut in the savings interest rate on local currency to be negotiable subject to 10 percent of the Monetary Policy Rate which is 12.5 percent effective September 1, 2020 leaving the minimum savings rate at 1.25 percent. This will reviewed and accessed as it affects investment, GDP, Consumption, Savings and how quickly and effectively this can revamp the economy considering all other factors such as the Foreign Direct Investment and the fluctuating global oil prices.
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Eburajolo, Courage Ose, and Leonard Nosa Aisien. "IMPACT OF COMMERCIAL BANKS’ CREDIT TO THE REAL SECTOR ON ECONOMIC GROWTH IN NIGERIA." Oradea Journal of Business and Economics 4, no. 1 (March 2019): 38–46. http://dx.doi.org/10.47535/1991ojbe058.
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The study examined the effect of commercial bank sectorial credit to the manufacturing and agricultural sub-sectors on economic growth in Nigeria with time series data from 1981 to 2015, using co-integration and error correction mechanism for the empirical work. A three equation model was specified to analyze this study, and the variables include; real GDP, bank sectorial credit to manufacturing and agriculture subsectors, monetary policy rate, financial market development, sourced from CBN statistical bulletin and also the interaction variables. The variables were tested for unit root using the Augmented Dickey Fuller approach and were found to be stationary. The empirical result revealed that commercial bank credit to the manufacturing and agricultural subsectors significantly affects economic growth in Nigeria both in the short run and in the long run. Furthermore, development of the financial sector enhances the growth effects of commercial banks credit to the manufacturing and agricultural subsectors of the economy. It was therefore recommended that the Nigerian apex financial authorities should encourage banks via deliberate policy to increase credits to these subsectors of the economy.
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Waleru Henry, Akani. "Effects of monetary policy on banks asset portfolio behaviour; evidence from Nigerian economy (1980 – 2009)." International Journal of Academic Research 4, no. 5 (September 30, 2012): 103–17. http://dx.doi.org/10.7813/2075-4124.2012/4-5/b.15.
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Abubakar, MA, K. Apeh, and ON Nweze. "Econometric Assessment of the Impact of Exchange Rate Depreciation on Inflation in Nigeria (1981-2017)." NIGERIAN ANNALS OF PURE AND APPLIED SCIENCES 4, no. 1 (August 22, 2021): 181–90. http://dx.doi.org/10.46912/napas.216.
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The present reality of the Nigerian economy is the fact that inflation has remained unabated in spite of all exchange rate measures that have been adopted by the monetary authority. This calls for investigation into the extent to which exchange rate impact on inflation in Nigeria. The research paper examined the impact of exchange rate depreciation on inflation in Nigeria for the period 1981–2017, using Auto Regressive Distributed Lag (ARDL) Bounds Test Cointegration Procedure. The research shows that inflation rate in Nigeria is highly susceptible to lagged inflation rate, exchange rate, lagged exchange rate, lagged broad money, and lagged gross domestic product at 5% level of significance. A long run relationship was also found to exist between inflation rate, gross domestic product and general government expenditure, indicating that the model has a self-adjusting mechanism for correcting any deviation of the variables from equilibrium. Therefore, this study concludes that exchange rate is an important tool to manage inflation in the country; thus, this paper recommends that policies that have direct influence on inflation as well as exchange rate policies that would checkmate inflation movement in the country, should be used by the Central Bank of Nigeria. Also, monetary growth and import management policies should be put in place to encourage domestic production of export commodities, which are currently short-supplied. In addition, policy makers should not rely on this instrument totally to control inflation, but should use it as a complement to other macro-economic policies.
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Oladunni, Sunday. "External Shocks and Business Cycle Fluctuations in Oil-exporting Small Open Economies: The Case of Nigeria." Central Bank of Nigeria Journal of Applied Statistics, Vol. 10 No. 2 (February 21, 2020): 39–71. http://dx.doi.org/10.33429/cjas.10219.2/6.
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This study employs a sign-restricted Bayesian structural vector autoregressive (BSVAR) model to analyse how global demand, oil price and the US monetary policy shocks impact the Nigerian business cycle. The objective is to uncover the dominant external drivers of the business cycle in Nigeria. Results show that global demand and oil price shocks are the principal foreign drivers of the Nigerian business cycle. The global demand shock elicits the strongest responses from output growth and inflation; while oil price shock impacts the terms-of-trade and interest rate the most. The historical contributions of the global demand and oil price shocks to the evolution of output growth are significant and comparable, while that of oil price shock to inflation and interest rate is dominant. Further sensitivity analysis of pre-crisis period of 2008/09 suggests that macroeconomic risk arising from global demand shock is systematic, owing to the comparable impact on output growth and similar interest rate response in the two estimations. Evidence suggests that the GFC may have contributed to the more volatile inflation response to global demand shock in our full sample estimation. Given the strong and pervasive impact of the global demand shock on output growth, Nigeria can manage its vulnerability by shrinking the size of oil exports in its terms-of-trade, while growing non-oil exports progressively through sustained economic diversification and viable industrialization strategy.
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Ogege, Samson, and Tarila Boloupremo. "The Influence of Oil Price Uncertainty on Economic Activities in Nigeria." EMAJ: Emerging Markets Journal 10, no. 2 (April 27, 2021): 18–24. http://dx.doi.org/10.5195/emaj.2020.195.
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This paper seeks to appraise the uncertainty of oil price influence on the activities of Nigerian economy with regard to human development in Nigeria. The research utilized the annual time series data spanning between 1981-2018, and the stationarity of the observed variables was tested by carrying out a unit root test and the stationarity of most of the observed variables were revealed at first difference. The secondary data employed were analyzed with the aid of least square technique of data analysis to assess the association between the observed variables. In response to the outcomes of the analysis, it was revealed that crude oil price positively and insignificantly influences life expectancy, but significantly influences consumption per capital and contrarily, it revealed negative and insignificant influence on physical quality of life and education index. It was inferred by the study that, there is existence of a comparative association of oil price with the indicators of Nigerian economic development. However, there is divergence of influence of the mechanisms of economic attributes as well as performance indicators. The study recommends that, a strict measure of monetary policy should be adopted by the government to regulate the rates of interest and inflation in the economy on a regular basis.
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Oladipo, Olajide. "Exchange Rate Pass-Through: A Case Study of a Small Open Economy." Global Economy Journal 7, no. 3 (August 2007): 1850112. http://dx.doi.org/10.2202/1524-5861.1246.
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The exchange rate pass-through for Nigeria imports is estimated by applying an econometric procedure to sectoral data which avoids the pit-falls in previous studies. We use the mark-up approach, which implies setting export prices as a mark-up on production costs. So, the price facing importers is the exchange rate adjusted production costs where mark-up depends on the competitive pressures in the import's market and the nominal exchange rate. Our results indicate incomplete pass-through at varying degrees across sectors, which implies that the foreign exporters passed on only part of the increase in their costs of production to import prices. Also, it reveals that the effort of the Nigerian government in encouraging companies to use local inputs where possible instead of relying on imported intermediate inputs is gradually yielding positive results. Important policy implications that follow from our results of incomplete pass-through to domestic prices could influence CBN forecasts of future path of inflation, a key element in the conduct of monetary policy. Indeed, the successful implementation of monetary policy presupposes that CBN has not only a good understanding of inflation dynamics but is also relatively successful at predicting the future path of inflation. Also, our results imply that the exchange rate policy may be a blunt instrument when used to restore external balance since relative price adjustments will be limited. Furthermore, the incomplete pass-through suggests that exchange rate changes are likely to lead to smaller real effects on the economy through lower changes in both the terms of trade and import volumes and finally, the extent of inflation (deflation) effects of exchange rate depreciation (appreciation) operating through changes in the prices of imported goods will be moderated.
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Tunde Gabriel, Monogbe. "Monetary and Fiscal Policy, Tools for Economic Growth. (Test of the Keynesian and Monetarist Preposition): Nigerian Experience." International Journal of Finance and Banking Research 2, no. 3 (2016): 63. http://dx.doi.org/10.11648/j.ijfbr.20160203.12.
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Yaaba, Baba N., Abubakar, Ibrahim, and Shaba, Yakubu. "Money, Exchange Rate, Prices and Output in Nigeria: A Test of the P-Star Model." Journal of Economics and Public Finance 4, no. 4 (November 2, 2018): 281. http://dx.doi.org/10.22158/jepf.v4n4p281.
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<p><em>The search for robust model to predict inflation within a QTM framework gave birth to P-star model which has attracted less attention of researchers and practitioners in Nigeria. This study applied the methodology to high frequency Nigerian data from 1995M1 to 2018M6 to determine the validity of the model for Nigeria using error correction model (ECM). The result supports the working of the model but with slight modification. The modification centres on the incorporation of foreign price gap, (open economy view of inflation), reserve money (Friedmanic/monetarist view), price per litre of petroleum motor spirit (PMS) and output gap (Structuralist view). With this modification, P-star model proved to be a viable inflation forecasting alternative model for Nigeria. Consequently, the Central Bank of Nigeria is advised to consider adopting this modified version of the model to forecast inflation for Nigeria at least as a complimentary model to be used side-by-side with the existing forecasting model of the Bank. This will no doubt enhance the efficacy of the monetary policy of the Bank as such policies will be predicated on sufficient information, particularly on the future path of inflation.</em></p>
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Abdullahi, Ibrahim Bello. "The Effects of Unstable Macroeconomic Indicators on Stock Price Behavior of Banking Sector in the Nigerian Stock Market." Binus Business Review 11, no. 2 (July 31, 2020): 71–78. http://dx.doi.org/10.21512/bbr.v11i2.6047.
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The research aimed to investigate the stock price behavior of banking sector in response to unstable macroeconomic variables in the Nigerian stock market. The research employed ex-post facto research design, and the data were subjected to Autoregressive Distributed Lag method of analysis to examine both the short and long run of the studied variables between 2009 and 2018. The findings reveal significant negative effects of interest rate and foreign reserves on the stock price behavior of the banking sector in the long run. Meanwhile, the inflation rate has a significant positive influence on stock price behavior. Then, the exchange rate is not statistically significant in influencing stock price behavior in the Nigerian stock market. It can be concluded that the stock price behavior of banking sector is influenced by foreign external reserve, interest rate, and inflation rate. It is recommended that the monetary policy rate should be reduced to decrease the cost of borrowing and enhance liquidity level in the stock market.
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Adeyemi, Oluwole Jacob, Isiaq O. Oseni, and Sheriffdeen A. Tella. "Effects of Money Demand on Trade Balance in Nigeria." Acta Universitatis Lodziensis. Folia Oeconomica 6, no. 351 (December 15, 2020): 23–44. http://dx.doi.org/10.18778/0208-6018.351.02.
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Previous studies appear to have concentrated on the effects of currency depreciation on trade balance and macroeconomic policy, while the relationship between money demand and trade balance is scantly documented in the literature. This paper therefore examines the effects of money demand on trade balance in Nigeria. For the analysis conducted, annual time series data covering the period ranging from 1986 to 2018 were used along with the Autoregressive Distributed Lag (ARDL) estimation technique. The long‑run coefficient of money demand was positively signed and statistically significant at 5% level. The positive relationship exhibited by the coefficient of money demand in the long run had a significant influence on trade balance. Thus, this implied that a unit percent increase in money demand would lead to a 1.57% significant increase in trade balance. The implication of this finding was that money demand had significantly influenced trade balance, enhancing the production of goods and fostering investment, which had led to increased growth. The paper recommends that the Central Bank of Nigeria through the Monetary Policy Committee should amend qualitative and quantitative credit control policies with the aim of improving lending to enhance the flow of credit to the real and exporting sector of the economy in order to bring about the desired effect on trade balance. However, the study is limited to an analysis of the existence of the relationship between money demand and trade balance using the Nigerian data set.
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Echekoba, Felix, Amalachukwu Ananwude, and Oyinloye Lateef. "Effect of Monetary Policy on the Performance of the Nigerian Capital Market (1986 – 2016): Stylized Facts from ARDL Approach." Advances in Research 14, no. 6 (May 19, 2018): 1–15. http://dx.doi.org/10.9734/air/2018/37989.
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