Central Bank of Nigeria Economic and Financial Review, 2022
The objective of this paper is to examine the effect of intra-African Trade on Nigeria’s economic... more The objective of this paper is to examine the effect of intra-African Trade on Nigeria’s economic growth from 1981 to 2019. To achieve this, the ARDL modeling technique is employed to investigate the short-run and long-run effects of intra-African trade on Nigeria’s economic growth. The study finds that though the short-run effect is positive but not significant; the long-run effect is significantly positive, and robust to alternative estimation techniques. This suggests that expansion of trade among African countries, which is expected to result from the full implementation of the African Continental Free Trade Agreement (AfCFTA), would have positive growth effect on Nigeria in the long-run. Furthermore, positive and significant long-run real output effects of capital formation, exchange rate and population, as well as negative and significant long-run real output effect of inflation are observed. Evidence from out-of-sample simulation based on a three-equation system of simultaneous equations model shows that expansion of intra-African trade will (potentially) contribute to the growth of the Nigerian economy. Based on these findings, we recommend strong commitment to the implementation of the Free Trade Agreement, improvement of the investment climate, moderation of inflation and establishment of a stable exchange rate system, as well as development of a knowledge-base of the population to improve the performance of the Nigerian economy in the years ahead.
This study employs the ARDL modeling technique to investigate the determinants of employment gene... more This study employs the ARDL modeling technique to investigate the determinants of employment generation in Nigeria' s services sector, focusing mainly on the roles of foreign direct investment and exchange rate movements during the 1991-2019 period. This study found that in the short-run, FDI positively affects employment generation in the services sector, while currency depreciation adversely affects it with a one-year lag. The long-term employment generation effect of the FDI in the services sector remains positive. Still, it loses its statistical significance, while the impact of currency depreciation on services sector employment is positive and significant. It was also found that economic growth positively affects service sector employment generation in the short and long run, though the effect is only meaningful in the short term. The impact of trade openness is positive and significant over a short period but also turns out to be non-significant in the long run. Financial sector development favors employment generation in the services sector in the short and long run. Based on this evidence, it is recommended that the government try to enhance the attractiveness of various sectors of the economy to FDI and guard against undue appreciation of the nation' s currency. It is also recommended that economic growth and the development of the financial system be prioritized. Given the transience of the effect of trade openness on employment generation in the services sector, caution must be exercised in implementing trade liberalization policies. These measures, if implemented, are expected to enhance job creation in the nation' s services sector.
The determinants of, and interrelationships among unemployment, inflation and economic growth in ... more The determinants of, and interrelationships among unemployment, inflation and economic growth in Nigeria in the period 1981-2013 were investigated. Two appropriate methodologies – simultaneous equations analysis involving the two-stage least squares (2SLS) estimation technique, and vector autoregression (VAR) analysis are used for the investigations. The analyses reveal inter alia that (i) the variables are indeed interrelated, (ii) a long run (equilibrium) relationship exists among them (iii) the proposition of the original Phillips curve is validated (iv) inflation contributed to the growth of per capita income in the period covered by the study (v) the growth of Nigeria’s economy could not abate the unemployment problem, rather unemployment grew with economic growth (vi) broad money growth has been inflationary (vii) foreign direct investment (FDI) helped reduce unemployment within the sample period (viii) trade openness positively affects economic growth in Nigeria. The recomm...
This study employs the ARDL modeling technique to investigate the determinants of employment gene... more This study employs the ARDL modeling technique to investigate the determinants of employment generation in Nigeria' s services sector, focusing mainly on the roles of foreign direct investment and exchange rate movements during the 1991-2019 period. This study found that in the short-run, FDI positively affects employment generation in the services sector, while currency depreciation adversely affects it with a one-year lag. The long-term employment generation effect of the FDI in the services sector remains positive. Still, it loses its statistical significance, while the impact of currency depreciation on services sector employment is positive and significant. It was also found that economic growth positively affects service sector employment generation in the short and long run, though the effect is only meaningful in the short term. The impact of trade openness is positive and significant over a short period but also turns out to be non-significant in the long run. Financial sector development favors employment generation in the services sector in the short and long run. Based on this evidence, it is recommended that the government try to enhance the attractiveness of various sectors of the economy to FDI and guard against undue appreciation of the nation' s currency. It is also recommended that economic growth and the development of the financial system be prioritized. Given the transience of the effect of trade openness on employment generation in the services sector, caution must be exercised in implementing trade liberalization policies. These measures, if implemented, are expected to enhance job creation in the nation' s services sector.
West African Financial and Economic Review (WAFER), 2021
This study examined the determinants of inclusive growth in Nigeria with particular focus on the ... more This study examined the determinants of inclusive growth in Nigeria with particular focus on the role of monetary policy. The study adopted the ARDL approach to cointegration and error correction modeling for analysis of annual data for the period 1981-2015. It employed an integrated measure of inclusive growth, which adjusts growth rate of real per capita income for changes in Gini index of income inequality. The Monetary Policy Rate (MPR) was employed as the instrument of monetary policy. The empirical evidence indicated significant negative effect of the MPR on inclusive growth in the short-run and significant positive effect in the long-run. These implied that easy monetary policy could be used to enhance inclusive growth in the short-run, but in the long-run, reliance should be on (cautious) monetary tightening. Other determinants of inclusive growth identified are inflation, investment and non-oil export growth. While inflation adversely affects inclusive growth, investment and non-oil export growth promote inclusive growth. Based on the evidence, it is recommended that the monetary authority should deploy the MPR as a counter-cyclical monetary policy instrument to achieve inclusive growth, while bringing inflation under control. Policies to enhance investment and non-oil export growth are also recommended.
DBN Journal of Economics and Sustainable Growth, 2022
The study examines the employment effects of FDI and trade openness in Nigeria's industrial secto... more The study examines the employment effects of FDI and trade openness in Nigeria's industrial sector during the period 1991-2020 using the ARDL approach to cointegration and error correction modeling (ECM). It finds that FDI and trade openness adversely affect industrial sector employment in the short-and long-run. The study gives further evidences to show that industrial sector employment is adversely affected by real exchange rate appreciation. Based on the findings, the study recommends policies to enhance industrial sector employment in the country including protection of infant industries from activities of multinationals through which FDI enters the country; cautious liberalization of trade characterized by export-promotion and protection of import-competing sub-sectors of the industrial sector; use of monetary policy to control appreciation of the real effective exchange rate; and government's commitment towards industrial development to boost industrial (especially manufacturing) sector output.
Annals of the University of Oradea: Economic Science, 2019
The paper examines the effects of trade openness, particularly, import openness and FDI inflows o... more The paper examines the effects of trade openness, particularly, import openness and FDI inflows on life expectancy in Nigeria using annual time series data spanning the period from 1981 to 2017. The methodology involves the ARDL approach to cointegration and error correction modeling. The empirical evidence indicates that while import openness adversely affects life expectancy in the country, the effect of FDI inflows is positive, but not significant. Further evidence are that increase in the level of per capita income and government recurrent expenditure in health enhance life expectancy, while inflation adversely affects it. In view of the empirical evidence, the paper recommends, as measures to enhance life expectancy in Nigeria, imposition of restrictions on some categories of imports especially consumer goods (while encouraging domestic production of same through investment-friendly policies, programmes and initiatives, to meet domestic demand for consumer goods), deliberate an...
The paper examines the effect of import competition on unemployment in Nigeria during the period ... more The paper examines the effect of import competition on unemployment in Nigeria during the period from 1981 to 2017. The ARDL (Bounds) test approach to cointegration and error correction modeling was employed for the analysis. Among other findings, the study finds negative and significant short run effect and, positive and significant long run effect of import competition on unemployment in the country. These suggest that though import competition may mitigate unemployment in the short run, yet it exacerbates the unemployment problem in the long run. Based on the empirical evidence, the study recommends inter alia efforts by the government to invest massively in the productive sectors of the economy with the potentials for job-creation, and encourage private sector participation therein (by way of development of infrastructure, favourable tax regimes and reduction of cost of doing business). These could engender increase in economic activities, expansion of product quantities and upg...
The study empirically investigated the factors explaining the volatility of the bilateral exchang... more The study empirically investigated the factors explaining the volatility of the bilateral exchange rate of the naira to the U.S. dollar, using data for 1970-2013 period. The EGARCH (1,1) modeling technique was used. The empirical evidence indicated that volatility of the naira exchange rate was characterised by clustering, strong leverage effect and moderate degree of persistence. It was found that increased net capital flows, greater integration of the Nigerian economy into the global market, deepening of the nation’s financial system, favourable crude oil prices, increase in the level of external reserves as well as economic growth were germane to dampening conditional volatility of the country’s exchange rate. It was also found that external debt and monetary expansion had the potential to exacerbate volatility in the exchange rate. Policies recommended to mitigate volatility of the exchange rate included greater integration of the economy into the global market, which implies diversification of the country’s export base, less reliance on external borrowing, building up and maintaining a robust external reserves position, financial system development and use of contractionary monetary policy to control broad money growth.
Economy, Business & Development: An International Journal, 2021
The study empirically examines the employment generation potentials of the African Continental Fr... more The study empirically examines the employment generation potentials of the African Continental Free Trade Area (AfCFTA) in Nigeria’s industrial sector. The ARDL approach to cointegration and error correction modeling is employed for analysis of annual time series data covering the period 19912020. The study finds inter alia that the short run effect of expansion of intra-African trade (expected to result from the AfCFTA) on industrial sector employment is positive and statistically significant. The long run effect is also positive, but not statistically significant. It also finds that trade openness integration of the economy with the global market – significantly enhances employment generation in the nation’s industrial sector in the long run; though the short run effect is negative and significant. These suggest that the country’s membership of the AfCFTA and implementation of policies aimed at (cautiously) deepening the integration of the economy with the global market should be ...
This study uses annual time series data spanning 1981–2018 to investigate the threshold effects o... more This study uses annual time series data spanning 1981–2018 to investigate the threshold effects of import dependence on economic growth in Nigeria. The ordinary least squares (OLS) and the fully modified OLS (FMOLS) techniques are employed for estimation of a quadratic regression model to determine the nature of the relationship between aggregate import dependence and economic growth. It is found that the relationship is concave, that is, it follows an inverted-U shape. The conditional least squares estimator is thereafter employed to estimate the threshold model specified to determine the threshold level of import dependence. The study finds a threshold level of 26% for aggregate import dependence. Below this threshold, import dependence positively affects economic growth; above the threshold, the growth effect of import dependence is adverse. Furthermore, it is found that the long-run growth effect of Inflation is adverse, and investment is favourable to long-run economic growth. ...
In consideration of the high adolescent fertility rate in Nigeria, the growth effect of this phen... more In consideration of the high adolescent fertility rate in Nigeria, the growth effect of this phenomenon is investigated using annual time series data that span the period from 1981 to 2016. Alternative estimation techniques including the ARDL bounds test approach to co-integration and error correction, FMOLS and CCR are employed for the analysis. Results from the analysis indicate that adolescent fertility negatively affects economic growth in Nigeria in the short- and long-run. This suggests that adolescent fertility in Nigeria has serious implications for economic growth as it adversely affects it. The study therefore recommends efforts by the government to address the high adolescent fertility rate in the country. Specific actions steps include prioritizing girl-child education, incorporating sex education in high (or secondary) school curriculum, formulating laws to stop early marriages, and job creation to engage and economically empower parents or guardians of the adolescents ...
The objective of the paper is to investigate whether stock market development plays any role in t... more The objective of the paper is to investigate whether stock market development plays any role in the effect of foreign direct investment (FDI) on economic growth in Nigeria. Using annual time series data that span the period from 1981 to 2014, and employing the fully modified ordinary least squares (FMOLS) estimation technique, the empirical evidence indicates that FDI, domestic investment and stock market development positively and significantly affect economic growth, but the effect of the interaction between stock market development and FDI on economic growth is negative and significant, indicating that the Nigerian bourse is not yet fully developed to engender positive growth effect of FDI. The study further finds that government consumption expenditure and trade openness adversely affect the growth of the country's real GDP per capita. Recommendations of the paper include efforts by the government to design and implement programmes and policies aimed at enhancing the attract...
This study uses annual time series data spanning 1981-2018 to investigate the threshold effects o... more This study uses annual time series data spanning 1981-2018 to investigate the threshold effects of import dependence on economic growth in Nigeria. The ordinary least squares (OLS) and the fully modified OLS (FMOLS) techniques are employed for estimation of a quadratic regression model to determine the nature of the relationship between aggregate import dependence and economic growth. It is found that the relationship is concave, that is, it follows an inverted-U shape. The conditional least squares estimator is thereafter employed to estimate the threshold model specified to determine the threshold level of import dependence. The study finds a threshold level of 26% for aggregate import dependence. Below this threshold, import dependence positively affects economic growth; above the threshold, the growth effect of import dependence is adverse. Furthermore, it is found that the long-run growth effect of Inflation is adverse, and investment is favourable to long-run economic growth. Based on these findings, the paper recommends efforts by Nigeria's government to reduce import dependence below the estimated threshold of 26%, control inflation and encourage investment so as to enhance the growth of the nation's economy.
Central Bank of Nigeria Economic and Financial Review, 2022
The objective of this paper is to examine the effect of intra-African Trade on Nigeria’s economic... more The objective of this paper is to examine the effect of intra-African Trade on Nigeria’s economic growth from 1981 to 2019. To achieve this, the ARDL modeling technique is employed to investigate the short-run and long-run effects of intra-African trade on Nigeria’s economic growth. The study finds that though the short-run effect is positive but not significant; the long-run effect is significantly positive, and robust to alternative estimation techniques. This suggests that expansion of trade among African countries, which is expected to result from the full implementation of the African Continental Free Trade Agreement (AfCFTA), would have positive growth effect on Nigeria in the long-run. Furthermore, positive and significant long-run real output effects of capital formation, exchange rate and population, as well as negative and significant long-run real output effect of inflation are observed. Evidence from out-of-sample simulation based on a three-equation system of simultaneous equations model shows that expansion of intra-African trade will (potentially) contribute to the growth of the Nigerian economy. Based on these findings, we recommend strong commitment to the implementation of the Free Trade Agreement, improvement of the investment climate, moderation of inflation and establishment of a stable exchange rate system, as well as development of a knowledge-base of the population to improve the performance of the Nigerian economy in the years ahead.
This study employs the ARDL modeling technique to investigate the determinants of employment gene... more This study employs the ARDL modeling technique to investigate the determinants of employment generation in Nigeria' s services sector, focusing mainly on the roles of foreign direct investment and exchange rate movements during the 1991-2019 period. This study found that in the short-run, FDI positively affects employment generation in the services sector, while currency depreciation adversely affects it with a one-year lag. The long-term employment generation effect of the FDI in the services sector remains positive. Still, it loses its statistical significance, while the impact of currency depreciation on services sector employment is positive and significant. It was also found that economic growth positively affects service sector employment generation in the short and long run, though the effect is only meaningful in the short term. The impact of trade openness is positive and significant over a short period but also turns out to be non-significant in the long run. Financial sector development favors employment generation in the services sector in the short and long run. Based on this evidence, it is recommended that the government try to enhance the attractiveness of various sectors of the economy to FDI and guard against undue appreciation of the nation' s currency. It is also recommended that economic growth and the development of the financial system be prioritized. Given the transience of the effect of trade openness on employment generation in the services sector, caution must be exercised in implementing trade liberalization policies. These measures, if implemented, are expected to enhance job creation in the nation' s services sector.
The determinants of, and interrelationships among unemployment, inflation and economic growth in ... more The determinants of, and interrelationships among unemployment, inflation and economic growth in Nigeria in the period 1981-2013 were investigated. Two appropriate methodologies – simultaneous equations analysis involving the two-stage least squares (2SLS) estimation technique, and vector autoregression (VAR) analysis are used for the investigations. The analyses reveal inter alia that (i) the variables are indeed interrelated, (ii) a long run (equilibrium) relationship exists among them (iii) the proposition of the original Phillips curve is validated (iv) inflation contributed to the growth of per capita income in the period covered by the study (v) the growth of Nigeria’s economy could not abate the unemployment problem, rather unemployment grew with economic growth (vi) broad money growth has been inflationary (vii) foreign direct investment (FDI) helped reduce unemployment within the sample period (viii) trade openness positively affects economic growth in Nigeria. The recomm...
This study employs the ARDL modeling technique to investigate the determinants of employment gene... more This study employs the ARDL modeling technique to investigate the determinants of employment generation in Nigeria' s services sector, focusing mainly on the roles of foreign direct investment and exchange rate movements during the 1991-2019 period. This study found that in the short-run, FDI positively affects employment generation in the services sector, while currency depreciation adversely affects it with a one-year lag. The long-term employment generation effect of the FDI in the services sector remains positive. Still, it loses its statistical significance, while the impact of currency depreciation on services sector employment is positive and significant. It was also found that economic growth positively affects service sector employment generation in the short and long run, though the effect is only meaningful in the short term. The impact of trade openness is positive and significant over a short period but also turns out to be non-significant in the long run. Financial sector development favors employment generation in the services sector in the short and long run. Based on this evidence, it is recommended that the government try to enhance the attractiveness of various sectors of the economy to FDI and guard against undue appreciation of the nation' s currency. It is also recommended that economic growth and the development of the financial system be prioritized. Given the transience of the effect of trade openness on employment generation in the services sector, caution must be exercised in implementing trade liberalization policies. These measures, if implemented, are expected to enhance job creation in the nation' s services sector.
West African Financial and Economic Review (WAFER), 2021
This study examined the determinants of inclusive growth in Nigeria with particular focus on the ... more This study examined the determinants of inclusive growth in Nigeria with particular focus on the role of monetary policy. The study adopted the ARDL approach to cointegration and error correction modeling for analysis of annual data for the period 1981-2015. It employed an integrated measure of inclusive growth, which adjusts growth rate of real per capita income for changes in Gini index of income inequality. The Monetary Policy Rate (MPR) was employed as the instrument of monetary policy. The empirical evidence indicated significant negative effect of the MPR on inclusive growth in the short-run and significant positive effect in the long-run. These implied that easy monetary policy could be used to enhance inclusive growth in the short-run, but in the long-run, reliance should be on (cautious) monetary tightening. Other determinants of inclusive growth identified are inflation, investment and non-oil export growth. While inflation adversely affects inclusive growth, investment and non-oil export growth promote inclusive growth. Based on the evidence, it is recommended that the monetary authority should deploy the MPR as a counter-cyclical monetary policy instrument to achieve inclusive growth, while bringing inflation under control. Policies to enhance investment and non-oil export growth are also recommended.
DBN Journal of Economics and Sustainable Growth, 2022
The study examines the employment effects of FDI and trade openness in Nigeria's industrial secto... more The study examines the employment effects of FDI and trade openness in Nigeria's industrial sector during the period 1991-2020 using the ARDL approach to cointegration and error correction modeling (ECM). It finds that FDI and trade openness adversely affect industrial sector employment in the short-and long-run. The study gives further evidences to show that industrial sector employment is adversely affected by real exchange rate appreciation. Based on the findings, the study recommends policies to enhance industrial sector employment in the country including protection of infant industries from activities of multinationals through which FDI enters the country; cautious liberalization of trade characterized by export-promotion and protection of import-competing sub-sectors of the industrial sector; use of monetary policy to control appreciation of the real effective exchange rate; and government's commitment towards industrial development to boost industrial (especially manufacturing) sector output.
Annals of the University of Oradea: Economic Science, 2019
The paper examines the effects of trade openness, particularly, import openness and FDI inflows o... more The paper examines the effects of trade openness, particularly, import openness and FDI inflows on life expectancy in Nigeria using annual time series data spanning the period from 1981 to 2017. The methodology involves the ARDL approach to cointegration and error correction modeling. The empirical evidence indicates that while import openness adversely affects life expectancy in the country, the effect of FDI inflows is positive, but not significant. Further evidence are that increase in the level of per capita income and government recurrent expenditure in health enhance life expectancy, while inflation adversely affects it. In view of the empirical evidence, the paper recommends, as measures to enhance life expectancy in Nigeria, imposition of restrictions on some categories of imports especially consumer goods (while encouraging domestic production of same through investment-friendly policies, programmes and initiatives, to meet domestic demand for consumer goods), deliberate an...
The paper examines the effect of import competition on unemployment in Nigeria during the period ... more The paper examines the effect of import competition on unemployment in Nigeria during the period from 1981 to 2017. The ARDL (Bounds) test approach to cointegration and error correction modeling was employed for the analysis. Among other findings, the study finds negative and significant short run effect and, positive and significant long run effect of import competition on unemployment in the country. These suggest that though import competition may mitigate unemployment in the short run, yet it exacerbates the unemployment problem in the long run. Based on the empirical evidence, the study recommends inter alia efforts by the government to invest massively in the productive sectors of the economy with the potentials for job-creation, and encourage private sector participation therein (by way of development of infrastructure, favourable tax regimes and reduction of cost of doing business). These could engender increase in economic activities, expansion of product quantities and upg...
The study empirically investigated the factors explaining the volatility of the bilateral exchang... more The study empirically investigated the factors explaining the volatility of the bilateral exchange rate of the naira to the U.S. dollar, using data for 1970-2013 period. The EGARCH (1,1) modeling technique was used. The empirical evidence indicated that volatility of the naira exchange rate was characterised by clustering, strong leverage effect and moderate degree of persistence. It was found that increased net capital flows, greater integration of the Nigerian economy into the global market, deepening of the nation’s financial system, favourable crude oil prices, increase in the level of external reserves as well as economic growth were germane to dampening conditional volatility of the country’s exchange rate. It was also found that external debt and monetary expansion had the potential to exacerbate volatility in the exchange rate. Policies recommended to mitigate volatility of the exchange rate included greater integration of the economy into the global market, which implies diversification of the country’s export base, less reliance on external borrowing, building up and maintaining a robust external reserves position, financial system development and use of contractionary monetary policy to control broad money growth.
Economy, Business & Development: An International Journal, 2021
The study empirically examines the employment generation potentials of the African Continental Fr... more The study empirically examines the employment generation potentials of the African Continental Free Trade Area (AfCFTA) in Nigeria’s industrial sector. The ARDL approach to cointegration and error correction modeling is employed for analysis of annual time series data covering the period 19912020. The study finds inter alia that the short run effect of expansion of intra-African trade (expected to result from the AfCFTA) on industrial sector employment is positive and statistically significant. The long run effect is also positive, but not statistically significant. It also finds that trade openness integration of the economy with the global market – significantly enhances employment generation in the nation’s industrial sector in the long run; though the short run effect is negative and significant. These suggest that the country’s membership of the AfCFTA and implementation of policies aimed at (cautiously) deepening the integration of the economy with the global market should be ...
This study uses annual time series data spanning 1981–2018 to investigate the threshold effects o... more This study uses annual time series data spanning 1981–2018 to investigate the threshold effects of import dependence on economic growth in Nigeria. The ordinary least squares (OLS) and the fully modified OLS (FMOLS) techniques are employed for estimation of a quadratic regression model to determine the nature of the relationship between aggregate import dependence and economic growth. It is found that the relationship is concave, that is, it follows an inverted-U shape. The conditional least squares estimator is thereafter employed to estimate the threshold model specified to determine the threshold level of import dependence. The study finds a threshold level of 26% for aggregate import dependence. Below this threshold, import dependence positively affects economic growth; above the threshold, the growth effect of import dependence is adverse. Furthermore, it is found that the long-run growth effect of Inflation is adverse, and investment is favourable to long-run economic growth. ...
In consideration of the high adolescent fertility rate in Nigeria, the growth effect of this phen... more In consideration of the high adolescent fertility rate in Nigeria, the growth effect of this phenomenon is investigated using annual time series data that span the period from 1981 to 2016. Alternative estimation techniques including the ARDL bounds test approach to co-integration and error correction, FMOLS and CCR are employed for the analysis. Results from the analysis indicate that adolescent fertility negatively affects economic growth in Nigeria in the short- and long-run. This suggests that adolescent fertility in Nigeria has serious implications for economic growth as it adversely affects it. The study therefore recommends efforts by the government to address the high adolescent fertility rate in the country. Specific actions steps include prioritizing girl-child education, incorporating sex education in high (or secondary) school curriculum, formulating laws to stop early marriages, and job creation to engage and economically empower parents or guardians of the adolescents ...
The objective of the paper is to investigate whether stock market development plays any role in t... more The objective of the paper is to investigate whether stock market development plays any role in the effect of foreign direct investment (FDI) on economic growth in Nigeria. Using annual time series data that span the period from 1981 to 2014, and employing the fully modified ordinary least squares (FMOLS) estimation technique, the empirical evidence indicates that FDI, domestic investment and stock market development positively and significantly affect economic growth, but the effect of the interaction between stock market development and FDI on economic growth is negative and significant, indicating that the Nigerian bourse is not yet fully developed to engender positive growth effect of FDI. The study further finds that government consumption expenditure and trade openness adversely affect the growth of the country's real GDP per capita. Recommendations of the paper include efforts by the government to design and implement programmes and policies aimed at enhancing the attract...
This study uses annual time series data spanning 1981-2018 to investigate the threshold effects o... more This study uses annual time series data spanning 1981-2018 to investigate the threshold effects of import dependence on economic growth in Nigeria. The ordinary least squares (OLS) and the fully modified OLS (FMOLS) techniques are employed for estimation of a quadratic regression model to determine the nature of the relationship between aggregate import dependence and economic growth. It is found that the relationship is concave, that is, it follows an inverted-U shape. The conditional least squares estimator is thereafter employed to estimate the threshold model specified to determine the threshold level of import dependence. The study finds a threshold level of 26% for aggregate import dependence. Below this threshold, import dependence positively affects economic growth; above the threshold, the growth effect of import dependence is adverse. Furthermore, it is found that the long-run growth effect of Inflation is adverse, and investment is favourable to long-run economic growth. Based on these findings, the paper recommends efforts by Nigeria's government to reduce import dependence below the estimated threshold of 26%, control inflation and encourage investment so as to enhance the growth of the nation's economy.
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Papers by OZIENGBE AIGHEYISI
and significant long-run real output effects of capital formation, exchange rate and population, as well as negative and significant long-run real output effect of inflation are observed. Evidence from out-of-sample simulation based on a three-equation system of simultaneous equations model shows that expansion of intra-African trade will (potentially) contribute to the growth of the Nigerian economy. Based on these findings, we recommend strong commitment to the implementation of the Free Trade Agreement, improvement of the investment climate, moderation of inflation and establishment of a stable exchange rate
system, as well as development of a knowledge-base of the population to improve the performance of the Nigerian economy in the years ahead.
and significant long-run real output effects of capital formation, exchange rate and population, as well as negative and significant long-run real output effect of inflation are observed. Evidence from out-of-sample simulation based on a three-equation system of simultaneous equations model shows that expansion of intra-African trade will (potentially) contribute to the growth of the Nigerian economy. Based on these findings, we recommend strong commitment to the implementation of the Free Trade Agreement, improvement of the investment climate, moderation of inflation and establishment of a stable exchange rate
system, as well as development of a knowledge-base of the population to improve the performance of the Nigerian economy in the years ahead.