FACULTY OF THE SOCIAL SCIENCES
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Item Intergovernmental Grant Transfers from Central to Local Levels in Ghana: Does Formula Allocation Prevent Political Influences?(Scholink, 2022) Fumey, A.; Egwaikhide, F. O.; Adeniyi, O. A.This study examines how the district assemblies’ common fund grant is distributed among the local governments in Ghana to ascertain the objectivity of the sharing formula scheme created under the 1992 Constitution. The dynamic GMM panel estimation approach is employed for the empirical analysis with focus on new versus mature democracy and how swing and aligned districts tend to benefit from the distribution. Annual data on the fund disbursements and the election outcomes from 1994 to 2018 for 216 district assemblies is used. The findings reveal that average transfers to each district was GhȻ7.54 million which generally increased by 9.4 percent in election years reflecting the opportunistic behavior of incumbent governments. Swing districts benefited more from the increase than non-swing districts, as the former received 4.3 percent more than the latter. Aligned districts in new democracy received, 2 percent more than non-aligned ones, while it was 4.3 percent more for swing districts in mature democracy. Therefore, the allocation formula is subject to political manipulations hence it is recommended that the unilateral appointment of the fund’s administrator by incumbent Presidents be reviewed in addition to creating autonomous public agencies to be responsible for the allocation formula and the fund administration independently.Item Intergovernmental Grant Transfers from Central to Local Levels in Ghana: Does Formula Allocation Prevent Political Influences?(Scholink, 2022) Fumey, A.; Egwaikhide, F. O.; Adeniyi, O. A.This study examines how the district assemblies’ common fund grant is distributed among the local governments in Ghana to ascertain the objectivity of the sharing formula scheme created under the 1992 Constitution. The dynamic GMM panel estimation approach is employed for the empirical analysis with focus on new versus mature democracy and how swing and aligned districts tend to benefit from the distribution. Annual data on the fund disbursements and the election outcomes from 1994 to 2018 for 216 district assemblies is used. The findings reveal that average transfers to each district was GhȻ7.54 million which generally increased by 9.4 percent in election years reflecting the opportunistic behavior of incumbent governments. Swing districts benefited more from the increase than non-swing districts, as the former received 4.3 percent more than the latter. Aligned districts in new democracy received, 2 percent more than non-aligned ones, while it was 4.3 percent more for swing districts in mature democracy. Therefore, the allocation formula is subject to political manipulations hence it is recommended that the unilateral appointment of the fund’s administrator by incumbent Presidents be reviewed in addition to creating autonomous public agencies to be responsible for the allocation formula and the fund administration independently.Item Policy Trilemma and Interest Rate Behaviour in Nigeria(Statistics Department, Central Bank of Nigeria (CBN), 2018) Ajogebeje, K.; Adeniyi, O. A.; Egwaikhide, F. O.Policy makers face trade-off in dealing with exchange rate management, monetary independence and concerns about capital mobility simultaneously. This study empirically examines the effects of Nigeria's trilemma policy path on interest rate using data spanning from 1997:Q1 to 2017:Q3. It equally in- corporates the role of external reserves in buffering these effects. Stationarity of the series were ascertained with Zivot-Andrew (ZA) structural break unit roots test technique, while the bounds test cointegration approach was used to confirm the cointegrating properties of the variables. We found that capital mobility has significant effect on interest rate in the long run base- line model and could also be successfully buffered with external reserves to reduce interest rate. Additionally, our results show that although exchange rate stability and monetary independence do not independently affect inter- est rate, but their interaction with external reserves does. This implies that external reserve serves as an effective buffer if appropriately employed by the monetary authorities. The trilemma policy can be used to optimally reduce interest rate. Also, external reserves could serve as a tool for economic stabilization with appropriate combination with other relevant policy variables.Item Financial Development and Economic Growth in Nigeria: Evidence from Threshold Modelling(Elsevier Ltd, 2015) Adeniyi, O. A.; Oyinlola, M. A.; Omisakin, O.; Egwaikhide, F. O.This paper re-examined the relationship between financial development and economic growth in Nigeria. Unlike existing studies, we attempted to assess the information content of non-linearities in the finance–growth nexus for Nigeria. We also attempted to inventively gauge the impact of financial reforms on the Nigerian economy particularly in terms of economic growth. Using annual data covering the period 1960–2010, we factored in threshold effects through the financial development (FD) measures. Following these, we unearth a number of interesting results. First, financial development negatively impacted growth but a sign reversal resulted on accounting for threshold-type effects. This is indicative of some turning points in the finance–growth association. Second, using a composite index of FD led to a similar outcome. Third, on the heels of sample splitting, the coefficients for the pre- and post-reform era are hardly distinguishable casting doubt on the efficacy of financial system reforms. On the basis of the foregoing, broader structural reforms should pervade Nigeria’s policy space if the aim of sustained, inclusive and employment-generating growth is to be realized.Item Saving-Investment Nexus in Developing Countries: Does Financial Development Matter?(Emerald Publishing Limited, 2013) Adeniyi, O. A.; Egwaikhide, F. O.The Feldstein-Horioka puzzle is re-examined using a sample of 20 sub-Saharan Africa (SSA) countries. Unlike the extant literature we demonstrate the expediency of sustenance of financial sector reforms for the saving-investment nexus in SSA. Findings showed saving retention coefficients similar in magnitude to those already reported for developing countries, particularly SSA. In addition, however, the results uncovered a telling intervening role for financial deepening in the saving-investment space. Going forward, the precise nature and corresponding policy implications of this role should form an integral part of discussions in both academic and policy circles.Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M.A.; Omisakin, O.; Adeniyi, O. A.This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.Item Saving-Investment Nexus in Developing Countries: Does Financial Development Matter?(Emerald Publishing Limited, 2013) Adeniyi, O. A.; Egwaikhide, F. O.The Feldstein-Horioka puzzle is re-examined using a sample of 20 sub-Saharan Africa (SSA) countries. Unlike the extant literature we demonstrate the expediency of sustenance of financial sector reforms for the saving-investment nexus in SSA. Findings showed saving retention coefficients similar in magnitude to those already reported for developing countries, particularly SSA. In addition, however, the results uncovered a telling intervening role for financial deepening in the saving-investment space. Going forward, the precise nature and corresponding policy implications of this role should form an integral part of discussions in both academic and policy circles.Item Intergovernmental Grant Transfers from Central to Local Levels in Ghana: Does Formula Allocation Prevent Political Influences?(Scholink, 2022) Fumey, A.; Egwaikhide, F. O.; Adeniyi, O. A.Item Policy Trilemma and Interest Rate Behaviour in Nigeria(Statistics Department, Central Bank of Nigeria (CBN), 2018) Ajogebeje, K.; Adeniyi, O. A.; Egwaikhide, F. O.Policy makers face trade-off in dealing with exchange rate management, mo- netary independence and concerns about capital mobility simultaneously. This study empirically examines the effects of Nigeria's trilemma policy path on interest rate using data spanning from 1997:Q1 to 2017:Q3. It equally in- corporates the role of external reserves in buffering these effects. Stationar- ity of the series were ascertained with Zivot-Andrew (ZA) structural break unit roots test technique, while the bounds test cointegration approach was used to confirm the cointegrating properties of the variables. We found that capital mobility has significant effect on interest rate in the long run base- line model and could also be successfully buffered with external reserves to reduce interest rate. Additionally, our results show that although exchange rate stability and monetary independence do not independently affect inter- est rate, but their interaction with external reserves does. This implies that external reserve serves as an effective buffer if appropriately employed by the monetary authorities. The trilemma policy can be used to optimally reduce interest rate. Also, external reserves could serve as a tool for economic sta- bilization with appropriate combination with other relevant policy variables.Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A.This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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