Economics

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A computable general equilibrium analysis of policy options under the Nigeria’s National Economic Empowerment and Development strategy (NEEDS) -2
(2009-09) Iwayemi, A. P; Olofin, S. O.; Olopoenia, A. A.; Adenikinju, A. F.; Oyeranti, O. A.; Aminu, A.
The study uses a computable general equilibrium model of Nigeria to investigate the likely effects of two main policy options that will be given special consideration in the National Economic Empowerment and Development Strategy (NEEDS)-2 slated for implementation under the framework of the recently launched Seven-Point Agenda. The two policy options are the increase in the rate of value-added tax (VAT) and trade liberalisation. It is found. that an increase in VAT rate or a doubling of VAT rate for that matter will increase government revenue but this will be at the cost of a higher rate of inflation and impoverishment of poor households who are in the majority in Nigeria. This finding in part implies that the monetary authority concerned with price level stability should be on the alert whenever any attempt is made by the fiscal authority to increase VAT rate. Any attempt to liberalise trade (especially import) between Nigeria and other countries through the instrumentality of reduction in import duties' rates will boost both import and export transactions but this will at the same time reduce government revenue. One other interesting finding is that a higher percentage reduction in import duties' rates will result in a lower rate of naira depreciation and this sort of suggests that a higher percentage reduction in import duties' rates should be preferred to a lower percentage. The reduction in government revenue due to trade liberalisation implies that government will need to explore and exploit other sources of revenue to ensure sustainability of government expenditure.
A social cost-benefit analysis of the Nigerian liquefied natural gas (NLNG) project
(Ibadan University Press, Publishing House, University of Ibadan, Ibadan, 2006) Oyeranti, O. A.; Olaniyan, O.
An analysis of China-Nigeria investment relations
(Emerald Group Publishing Limited, 2011) Oyeranti, G. A.; Babatunde, M. A.; Ogunkola, E. O.
Purpose – The purpose of this paper is to analyze the economic relation between China and Nigeria in the area of foreign direct investment (FDI). Design/methodology/approach – The study employed the use of quantitative (descriptive analysis such as ratios, percentages and correlation as well as cross tabulations), qualitative (key informant interviews and surveys) and case studies – for example the railway transport project handled by the Chinese. The use of surveys assisted the study to generate firm-level data that allowed the analysis of China-Nigeria investment relations with respect to concerns such as the employment effects as well as the competitive and/or complementary effects of Chinese firms to local firms. The use of content analysis of relevant documents and reports obtained from various sources was equally involved to corroborate the results obtained from primary data. Findings – The findings reveal that the major characteristic of Chinese investment in Nigeria is its concentration in a few sectors that are of strategic interest to China, especially in the extractive industries which are carried out largely by state-owned enterprises or joint ventures. In addition, the analysis clearly shows that the engagement with China, just like any bilateral relationship, has some advantages and disadvantages and that optimal outcome of the engagement will depend on the policies and institutions that are put in place to maximize the complementary effects and to minimize the competing effects. However, there is need to ensure implementation of laws and regulations in Nigeria and to ensure compliance by the Chinese investors. Originality/value – This is the first study to carry out an empirical analysis of the China-Nigeria relation. The study was able to establish the sectors where the incoming FDI from China is directed and the extent at which Chinese FDI is bundled with inflows of aid. The study was also able to show that the incoming Chinese FDI are in resource seeking, and the output targeted at the external market. The study will be of value to academia and to policy makers who are interested in studying the China-Africa relation.
An empirical analysis of export supply response capacity in Nigeria
(Centre For Public-Private Cooperation, Ibadan, 2018) Oyeranti, O. A.; Babatunde, M. A.; Adewuyi, A. O.; Bankole, A. S.
The last two decades witnessed a significant fall in trade barriers in Nigeria in an attempt to boost trade and foster economic growth. The changes have been particularly marked in relation to the foreign trade regime. In spite of the significant trade liberalisation, considerably weak or sluggish non-oil export supply response still persisted in Nigeria. Using panel regression on macroeconomic data with a view to obtaining large sample size, implemented along with cross section fixed effect approach and correcting for contemporaneous correlation among the residuals, the study found significant information and establishment costs, as well as inclement macroeconomic environment that adversely impacted businesses in Nigeria and stalled their growth. In addition, it appeared that despite the substantial export bias, compensatory and complementary measures were inadequate to equalise the negative effect of export bias. Similarly, the analysis of survey data buttresses these findings.
An Empirical Re-examination of Exchange Rate-Trade Balance Nexus in Nigeria
(African Journal Online (AJOL), 2013) Oyinlola, M. A.; Omisakin, O. A.; Adeniyi, O. A.
The Nigerian exchange rate-trade balance nexus was re-examined. The long run relationship between these variables was explored using the Gregory-Hansen cointegration approach on a data sample between 1980:Q1 and 2010:Q4. Prior to this, three efficient integration tests that can overcome potentially severe finite sample power and size problems suffered by the standard methods were tactfully pursued for robustness. The short run impact analysis was done in the error correction framework. The analyses showed that exchange rate depreciation led to trade balance deterioration in both the short run and the long run. Thus, this study could not find support for J-curve in Nigeria. Some suggestions on the way forward were put forth.
ANALYSIS OF THE COSTS AND BENEFITS OF A COMMON CURRENCY FOR THE SECOND WEST AFRICAN MONETARY ZONE
(2012-05) OKAFOR, H. O.
The second West African Monetary Zone (WAMZ), comprising The Gambia, Ghana, Guinea, Nigeria and Sierra Leone, was initiated in 1999 to fast-track the common monetary policy objective of the Economic Community of West African States (ECOWAS). However, uncertainties about the economic implications of the policy have been major obstacles to regional integration. Economists and policymakers are yet to agree on the potential costs and benefits of a common currency. Available empirical studies on WAMZ focused separately on the elements of costs and benefits of monetary union, which makes them limited in scope. This study, therefore, offered an integrated analysis of the costs and benefits of a common currency in WAMZ spanning 1980 to 2009. A two-step methodological procedure, based on the Optimum Currency Area (OCA) and the New Optimum Currency Area (NOCA) frameworks, were used to estimate the costs and benefits of monetary union in WAMZ. First, behavioural models, capturing the elements of costs (asymmetric shocks, loss of seigniorage and fiscal policy distortion) and benefits (trade creation, financial integration effects and policy coordination gains), were estimated with the Vector Auto-regression (VAR), Error Correction Model (ECM) for each of the sampled countries and panel estimation techniques for the group. Second, weighted composite indices were constructed for the costs and benefits indicators using the parameter estimates obtained from the various estimation techniques. The VAR impulse response and forecast error methods were employed to estimate countries’ response to shocks. Robustness tests, including data calibration for the net-benefit using a money metric baseline and ranking, were carried out to permit comparison of results among countries. Fiscal policy distortion and loss of seigniorage were the main cost indicators of monetary union in the zone rather than asymmetric shocks. The share of fiscal policy distortion stood at 72.4%, while loss of seigniorage contributed 18.4% to the costs of monetary union. Ghana recorded the highest costs of 36.0% for fiscal policy distortion and 65.0% for loss of seigniorage in the zone. The Gambia had the lowest seigniorage cost of 8.0%. Considerable variations existed among Sierra Leone, The Gambia and Nigeria as fiscal policy distortion accounted for 30.0%, 22.0% and 12.0%, respectively. Trade creation shared 89.0% of the total benefits for the zone. Policy coordination gains had the lowest share of 1.6% for the region. Trade creation gains ranged between 41.0% and 3.0% among the countries with Sierra Leone and Nigeria sharing the highest and lowest gains, respectively. The net-benefit of monetary union for the zone was potentially high with substantial variations among members. Sierra Leone and Nigeria had the highest and lowest net-benefit respectively from the ranking scale. Trade creation accounted for a substantial proportion of the potential benefits of common currency in WAMZ. However, fiscal policy distortion constitutes serious policy challenge to monetary union in the zone. Dealing with this challenge may require in the short-run, systematic macroeconomic adjustments to improve fiscal-monetary policy interactions in order to enhance the benefits of monetary union in the zone.
ANALYSIS OF THE COSTS AND BENEFITS OF A COMMON CURRENCY FOR THE SECOND WEST AFRICAN MONETARY ZONE
(2012-05) OKAFOR, Harrison Oluchukwu
The second West African Monetary Zone (WAMZ), comprising The Gambia, Ghana, Guinea, Nigeria and Sierra Leone, was initiated in 1999 to fast-track the common monetary policy objective of the Economic Community of West African States (ECOWAS). However, uncertainties about the economic implications of the policy have been major obstacles to regional integration. Economists and policymakers are yet to agree on the potential costs and benefits of a common currency. Available empirical studies on WAMZ focused separately on the elements of costs and benefits of monetary union, which makes them limited in scope. This study, therefore, offered an integrated analysis of the costs and benefits of a common currency in WAMZ spanning 1980 to 2009. A two-step methodological procedure, based on the Optimum Currency Area (OCA) and the New Optimum Currency Area (NOCA) frameworks, were used to estimate the costs and benefits of monetary union in WAMZ. First, behavioural models, capturing the elements of costs (asymmetric shocks, loss of seigniorage and fiscal policy distortion) and benefits (trade creation, financial integration effects and policy coordination gains), were estimated with the Vector Auto-regression (VAR), Error Correction Model (ECM) for each of the sampled countries and panel estimation techniques for the group. Second, weighted composite indices were constructed for the costs and benefits indicators using the parameter estimates obtained from the various estimation techniques. The VAR impulse response and forecast error methods were employed to estimate countries‟ response to shocks. Robustness tests, including data calibration for the net-benefit using a money metric baseline and ranking, were carried out to permit comparison of results among countries. Fiscal policy distortion and loss of seigniorage were the main cost indicators of monetary union in the zone rather than asymmetric shocks. The share of fiscal policy distortion stood at 72.4%, while loss of seigniorage contributed 18.4% to the costs of monetary union. Ghana recorded the highest costs of 36.0% for fiscal policy distortion and 65.0% for loss of seigniorage in the zone. The Gambia had the lowest seigniorage cost of 8.0%. Considerable variations existed among Sierra Leone, The Gambia and Nigeria as fiscal policy distortion accounted for 30.0%, 22.0% and 12.0%, respectively. Trade creation shared 89.0% of the total benefits for the zone. Policy coordination gains had the lowest share of 1.6% for the region. Trade creation gains ranged between 41.0% and 3.0% among the countries with Sierra Leone and Nigeria sharing the highest UNIVERSITY OF IBADAN LIBRARY iii and lowest gains, respectively. The net-benefit of monetary union for the zone was potentially high with substantial variations among members. Sierra Leone and Nigeria had the highest and lowest net-benefit respectively from the ranking scale. Trade creation accounted for a substantial proportion of the potential benefits of common currency in WAMZ. However, fiscal policy distortion constitutes serious policy challenge to monetary union in the zone. Dealing with this challenge may require in the short-run, systematic macroeconomic adjustments to improve fiscal-monetary policy interactions in order to enhance the benefits of monetary union in the zone. Key words: Optimum Currency Area, Behavioural models, Seigniorage, Fiscal policy distortion, Asymmetric shocks. Word count: 489
ANALYSIS OF THE IMPACT OF ECONOMIC AND POLITICAL INSTITUTIONS ON ECONOMIC GROWTH IN AFRICA
(2012-10) KILISHI, A. A.
The importance of economic and political institutions to economic growth has been demonstrated in the literature. However, little is known on how such institutions impact on growth and what determine the quality of economic institutions in Africa. Therefore, this study was aimed at examining the impact of economic and political institutions on growth as well as the impact of political transition on the quality of economic institutions. Game theory was used to develop a political economy model that incorporated institutional variables into the neoclassical Solow growth model. This model described the interactions among political power (de-jure and de-facto powers), institutions and economic growth. The model was empirically tested using data drawn from 29 African countries covering the period 1996 to 2009. The selection of countries was guided by availability of data and they spread across the continent. Indexes of economic and political institutions were computed from the World Bank’s governance indicators and the Polity IV database. The Ordinary Least Squares (OLS), fixed effect and Generalized Methods of Moments (GMM) techniques were used to test the impact of economic and political institutions on economic growth. A treatment analysis was also employed to test the impact of political transition on the quality of economic institutions and growth. Strong economic and political institutions had significant and positive impacts on economic growth. Countries with higher institutional qualities are found to be growing faster while those with lower quality grow slower. Generally, a 1.00% increase in the indexes of economic and political institutions led to 0.44% and 0.55% increase in economic growth respectively. However, the impacts of the two indexes differed across different sub-regions. The impact of economic institutions on growth was highest in the Southern African countries with a coefficient of 0.78% and lowest in West Africa with a coefficient of 0.20%. An increase in the index of political institution had the highest impact in the Central African countries and lowest in North Africa. Specifically, political institution was found to aid growth in Central Africa by 1.19% while it slowed down growth in North Africa by 0.49%. Countries that transited to democracy recorded 1.28% improvement in their quality of economic institutions and they grew about 0.51% faster than their pre-transition era. However, for countries where political elites persisted in power after the transition, the quality of economic institutions declined by 1.10% and they experienced a lower growth rate of 0.16%. Improvement in the quality economic institutions promote growth. Competitiveness of political system improved the quality of economic institutions and growth, while elites’ persistence in power reduced the two. Economic growth in Africa can be improved by building and strengthening institutions as well as promoting competitive democracy.
Anticipated and unanticipated monetary policy effects on real output: evidence from six African countries
(West African Monetary Institute, 2001-12) Egwaikhide, F. O.; Oyeranti, O. A.; Ayodele, O. S.
AN APPLICATION OF GOAL PROGRAMMING TO ACADEMIC RESOURCE ALLOCATION PLANNING
(1982-12) SOYIBO, A.
Since the last decade, universities in Nigeria have been experiencing a progressive decline in required inputs, like funds, materials and academic staff. In spite of this, there has been a continuing rise in the demand for their services, as shown by rising student enrolment figures (Nigeria, 1981). Confronted with such a problem, universities require more than ever before, formal decision models for planning the allocation of their scarce resources as efficiently as possible. This study applies goal programming for planning the academic resource allocation--a major input--of the University of Ibadan for 1982/83-l986/87. The goal programming model used modifies that of Schroeder (1974) by defining explicitly a student enrolment goal and introducing an academic staff level goal, which is designed to cater for academic staff advancement, at least according to the historical rate in each faculty. Furthermore, it redefines the academic rank distribution goal to incorporate the controversial 30%-40%-30% rank distribution ratios introduced in 1981. The study seeks principally to determine the distribution of academic staff by rank, in each faculty/college, over a five-year period and recommend the planning implications of such a distribution. In addition, it attempts to find the effects of dropping the controversial rank distribution goal on the model solution. The model was solved using the Revised Simplex Goal Programming Algorithm developed by Kang (l980) on an I.B.M. VM 370 computer in the University of Nebraska-Lincoln, U.S.A. The analysis of the model solution: suggests that from a purely theoretical point of view, it is desirable to use a rank distribution goal, for an optimization model of the type used in the study; otherwise, the model will select least cost allocation alternatives only and such a solution cannot be used effectively for planning. However, the distributional ratios to be used should not be rigid like the controversial ones of 1981, but should reflect the historical advancement rates in the respective faculties. The result of solving such a model should be, used for indicative planning only; -confirms the fear that the use of fixed rank distribution ratios might inhibit promotion rate; -indicates that the Faculty of Agriculture and Forestry appears to be operating very much below the minimum level of academic staff requirement to meet the student enrolment goal of that faculty as of now; -suggests that by the beginning of 1986/87, the University of Ibadan will require a minimum of 1,133 academic staff of various ranks to meet its student enrolment goal. This is over 60% above the minimum requirement at the beginning of 1982/83; -recommends that the University should pursue a vigorous Staff Development Programme in which the training of the best of its graduates--through a type of Junior Fellowship Programme--will be the core, as one approach of augmenting the supply of academic staff normally obtained through recruitment; -corroborates the findings of Kang (1980) that CPU time of the Revised Simplex Goal Programming Algorithm, tends to increase with increasing negative deviational variables in the objective function.
Attracting foreign investment through private sector partnership: what hope for Nigeria?
(Development Policy Centre, Ojetunji Aboyade House, Ibadan, 2003) Kayode, M. O.; Oyeranti, O. A.
Banking and Insurance
(Federal Ministry of Information, Abuja, Nigeria, 2014) Lawanson, A. O.
Banking and Insurance
(Federal Ministry of Information, Abuja, Nigeria, 2014) Lawanson, A. O.
Capitalisation of the Nigerian agricultural sector
(Faculty of Social and Management Science, Bayero University, Kano, Nigeria, 1996) Dalhatu, D. M.; Oyeranti, O. A.
Rationalising the dismal performance of the Nigerian agricultural sector on the score of low capital contents, a case is made for capital expansion and improvement in the small scale farming sector. Bearing in mind that there are differences in the demographic structures of the Nigerian rural economy, a diversified capitalisation approach is suggested, whereby land-saving would be reserved for thickly populated areas of the country, and the labour-saving type is for sparsely populated areas. The impact of this approach on the employment situation in the country may not be negative, rather, it may reintroduce an era of agriculture-led growth and development.
Causality between budget deficit and the current account balance in African countries
(West African Monetary Institute, 2002) Egwaikhide, F. O.; Oyeranti, O. A.; Ayodele, O. S.; Tchokote, J.
Central Bank Communication and Monetary Policy Effectiveness: Evidence from Nigeria
(West African Monetary Institute, 2013) Adeniyi, O. A.; Ekor. E.; Saka, J.
The study examines the impact of central bank communication on monetary policy in Nigeria by applying the standard deviation measure of volatility and the vector autoregressive approach. The findings show that inflation and markets volatilities reduced during the period of improved central bank communication. The money market responded positively to central bank communication and reverted faster to equilibrium compared with the stock market which responded negatively and reverted slower to equilibrium. Central bank communication is also able to explain some variation in the money and stock markets. The policy implications of the findings include the need for the Central Bank of Nigeria to continue to improve on its communications strategy as this has helped reduce inflation and markets volatility. In addition, the interest rate channel of the transmission mechanism should be accorder greater priority compared to the asset channel as the money market reverted faster to equilibrium compared to the stock market in the event of a shock.
Characteristics and behaviour of African factor markets and market institutions and their consequences for growth
(Center for International Development, Harvard University, 1999-12) Adenikinju, A. F.; Oyeranti, O.
This paper provides a detailed characterisation of the structure and behaviour of African factor markets and the institutions that impact on their operations. It shows that the African factor markets are imperfect and inefficient, thus constraining economic growth. The paper posits that for the current reform programmes to succeed, policy that enhances the efficiency and competitiveness of the African factor markets must be put in place.
Climate Change and Green Housing Deployment in Emerging Economies: Insights, Prospects and Challenges for Nigeria
(Nigerian Association of Energy Economics, 2013) Ajide K. B.; Adeniyi O. A.
Climate Change and Green Housing Deployment in Emerging Economies: Insights, Prospects and Challenges for Nigeria
(Nigerian Association of Energy Economics, 2013) Ajide K. B.; Adeniyi O. A
Climate Change and Green Housing Deployment in Emerging Economies: Insights, Prospects and Challenges for Nigeria
(Nigerian Association of Energy Economics, 2023) Ajide K. B.; Adeniyi O. A.