Tag Archives: economic growth

Effect of Petroleum Profit Tax on Economic Growth in Nigeria (Published)

The study examines the effect of petroleum profit tax on economic growth of Nigeria. Income from petroleum taxes is the proxy for PPT while economic growth was measured using Gross Domestic Product (GDP). The research adopted expos-facto research as secondary data were used for the analysis. Data were sourced from the Central Bank of Nigeria Statistical Bulletin and the Federal Statistical Bureau. The study covered twelve year period (2004-2015). Time series data were analyzed using the simple linear regression.  The results reveals that  PPT had positive and significant effect on Nigerian GDP. The study recommends that the government should provide the necessary human and material infrastructures that are needed to support petroleum business so they can earn more income that will boost taxation.

Keywords: Gross Domestic Product, Nigeria, Petroleum Profit Tax, economic growth

Government Expenditure and Economic Growth in Tanzania: A Time Series Analysis (Published)

This study empirically examines the long-run and short-run relationship between government expenditure and Economic growth in Tanzania over the period of 1996-2014 making the use of annual secondary time series data. The Error Correcting Model (ECM) is employed to examine the long-run and short-run estimates of parameters. In addition to that the granger causality test is employed to determine whether government expenditures granger causes economic growth. In the long-run government expenditure is found to be statistically significant and has positive relationship with economic growth. The short -run estimates show there is no significant relationship between government expenditures and economic growth.  The results of granger causality test show uni-directional causality running from economic growth to government expenditures. The government of Tanzania should improve in the allocation of resources in its development expenditure and social services expenditure and channel such expenditure to allow for private sector participation and infrastructure development in order to accelerate economic growth.

Keywords: Government Expenditure, Tanzania, Time Series Analysis, economic growth

An Assessment of the Casual Relationship between Economic Growth and Indirect Taxes in Nigeria (Published)

The study examines the causal relationship between economic growth and indirect taxes in Nigeria. Ex-post facto research design was employed and time series data were sourced from Central Bank Nigeria (CBN) statistical bulletin of various years 1994-2014. Multiple regression inferential statistics was used for data analysis. The result reveals that VAT has a positive significance effect on GDP. This is because the computed t-statistic of 3.142 is greater than the critical value table value of 2.120. The result of the second hypothesis also showed that the computed t- statistic of 4.557 is greater than the critical table value of 2.120 thus, proving that CED actually has a positive significance effect on GDP. The study conclude and that VAT and CED as indirect taxes contributes to economic growth in Nigeria, hence government should intensify effort to ensure immediate response of payment by the general public as flow of fund will encourage faster economic growth.

Keywords: Custom and Excise duties, Gross Domestic Product, Value Added Tax, economic growth

Evaluation of the Contribution of Nigerian Stock Market on Economic Growth; Regression Approach (Published)

The paper evaluates the contribution of Nigerian Stock Market on Economic Growth. In order to achieve this, regression analysis and ordinary least square technique was employed. The result indicates a positive relationship between economic growth, all share index and market capitalization with a 99.1% R-square value and a 99%  adjusted  R-squared value implying that economic growth in Nigeria is adequately explained by the developed model. The result of this study which established positive links between the capital market and economic growth suggests that policies geared towards rapid development of the capital market should be initiated.

Keywords: All share index, Gross Domestic Product, Market Capitalization, Nigerian Stock Market, Regression Analysis, Value of Transaction, economic growth

Impact of Financial Markets on the Economic Growth of East Africa (Published)

This paper aims at critically analyzing the impact of financial markets in trying to influence the magnitude and direction of economic growth as they purpose to intermediate funds between surplus spenders and deficit spenders within East Africa. Some of the past researches have revealed that the performance of financial markets have a significant impact on the growth of economy. We examine how the money markets, corporate and Government Bond markets, the stock markets impact on the growth of the economy within East Africa. We model our problem to incorporate financial markets operations, capital flows from foreign nations and the local market capital structure to depict their influence in the level of economic growth within East Africa. It involved conducting a systematic review of literature papers in the field of financial markets through content analysis to draw conclusion and recommendations.  Governments especially in less developed countries need to enhance and develop robust financial markets in order to realize the full potential of foreign direct investment. Financial markets act as linkages between the foreign financial markets and the economy. With better managed financial markets, the spillovers from direct foreign investment are capable of influencing great economic development in host countries.

 

Keywords: East Africa, Financial Markets, economic growth

Macroeconomic Analysis of the Relationship between Interest Rate, Economic Growth and Bank Lending in Nigeria (Published)

This study examined the relationship between interest rate, economic growth and bank lending in Nigeria. Secondary time series panel data on the study variables were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin for the period 1985 – 2014. The study employed Ordinary Least Squares (OLS) technique to analyze data. The study found that interest rate had negative relationship with bank lending in Nigeria. While economic growth had positive correlation with bank lending in Nigeria. The study recommended a policy shift towards infrastructural development and an increased productive base of the notion in order to improve the financial sector performance by stabilizing the macroeconomic instruments. This it is hoped would not only help in enhancing the profitability of banks in the country but would also improve the standard of living of the Nigerian people.

Keywords: Bank Lending, Interest Rate, economic growth

The Impact of Company Income Tax and Value-Added Tax on Economic Growth: Evidence from Nigeria (Published)

This study examined the impact of companies’ income tax, value-added tax on economic growth (proxy by gross domestic product) in Nigeria. Secondary time series panel data was collected for the period 2005 to 2014 from the Statistical Bulletin of the Central Bank of Nigeria (CBN). The study employed Ordinary Least Squares (OLS) technique based on the computer software Windows SPSS 20 version for the analysis of data, where gross Domestic product (GDP), the dependent variable and proxy for economic growth, was regressed as a function of company income tax (CIT) and value-added tax (VAT), the independent variables. The results of the analysis showed that both company income tax and value-added tax have significantly positive impact on economic growth. Based on the findings, the study recommended that government should strengthen the tax administration system to broaden the tax income, and embark on tax education to ensure voluntary tax compliance. The study also recommended that the tax authorities should employ qualified tax professionals who should be regularly trained and be retained in the tax administration system for efficient tax administration and collection.

Keywords: Company Income Tax, National Income, Value Added Tax, economic growth

Inflation and Growth Nexus in Nigeria: An Investigation into the Simultaneous Relationship (Published)

The relationship between inflation and economic growth remains an unresolved debate in empirical research. Its relevance in understanding growth behavior however remains pertinent. It is in this light that this study seeks to understand inflation and growth nexus in Nigeria. The study employs a two stage least square estimation to examine a simultaneous equation model with data from the Central Bank of Nigeria Statistical Bulletin and World Bank Indicators. The study shows that inflation is beneficial to growth though not significantly while growth is significantly beneficial to inflation; given the positive relationship between inflation and growth and the negative relationship between growth and inflation. The results further show that Money supply and trade openness are significant determinants of real GDP for all three estimation techniques under consideration. While, real GDP, money supply and interest rate are significant determinants of inflation. The study therefore recommends that inflation be controlled to have its optimal effect on output while production be diversified to optimize its effect on inflation.

Keywords: Inflation, Nigeria, Simultaneous Relationship, economic growth

Foreign Capital Inflows and Nigerian Economic Growth Nexus: A Toda Yamamoto Approach (Published)

This study investigated the relationship between foreign capital inflows and economic growth in Nigeria for the period of 1981-2014. In this study, foreign capital inflows were proxied by Foreign Direct Investment, Foreign Portfolio Investment and Foreign Aid while economic growth was proxied by Gross Domestic Product (GDP). The study employed annual data generated from CBN statistical bulletin, and Toda Yamamoto test of causality was used to determine the relationship between foreign capital inflow and economic growth in Nigeria. The result revealed that there is bi-directional causality running from GDP to FDI as well as from FDI to GDP. It also indicates that there is a unidirectional causality between FPI and GDP with causation running from FPI to GDP. Furthermore, the result showed a unidirectional causality between GDP and FA with causation running from FA to GDP. Finally the joint causation between all the components of foreign capital inflow i.e. FDI, FPI, FA and GDP indicates that increase in foreign capital inflow causes GDP to increase positively. And so, government should design policies and programs to enhance the inflows of foreign capital as the will accelerate the speed of growth in the economy.

Keywords: Foreign Capital Inflows, Toda Yamamoto, economic growth

Implications of Small and Medium Enterprises on South East Development in Nigeria (Published)

There has been a growing concern on the relationship between the output of small and medium enterprises and Igbo development in Nigeria, despite the fact that the South East government had embarked on several policies aimed at improving the growth of Nigerian economy through the contribution of small and medium enterprises output. The aim of this study is to empirically examine the relationship between small and medium enterprises output and Igbo development in South Eastern part of Nigeria. Empirical evidence from the developed and developing economies has shown that small and medium enterprises have the capacity to influence the entire socio economic development in Igbo land if it is well managed. Quantitative research design and multiple regressions were used to carry out this study. The results of the study indicates that small and medium enterprises contribute significantly to the development of Igbo land based on the magnitude and the level of significance of the coefficient and p-value. And there is significant and positive relationship between Igbo development and small and medium enterprises output. The implication of this findings is that if small and medium enterprises does not increase the size of their employment generation in Igbo land, the development of Igbo’s through small and medium enterprises will not contribute meaningfully to the growth of Nigerian economy. It is the recommendation of this study that the operators of small and medium enterprises in South East (Igbo Land) Nigeria should make maintain their level of social corporate responsibility. That there is also need to strengthen policies that will enhance rapid growth and development in Igbo land through small and medium enterprises in Nigeria

Keywords: Igbo Development, Output, SMEs, South-East, economic growth

Impact of Budget Deficit Financing On Economic Stability in Nigeria (Published)

Nigeria has been financing budget deficit overtime but their implications on economic stability have not been fully ascertained. This study sought to investigate the implications of budget deficit financing on economic stability in Nigeria between 1970-2013. The study adopted regression analysis. The study revealed that External Source of Deficit Financing (EXF), Non-banking Public Source of Deficit Financing (NBPF) and Exchange Rate has significant and positive implications on Economic Stability proxy for Gross Domestic Product (GDP), while Ways and Means Source of Deficit Financing (WM), Banking System Source of Deficit Financing (BSF) and Interest Rate (INTR) has negative implications on economic stability in Nigeria. The implication is that government deficit financing through External Source of Deficit Financing (EXF) and Non-banking Public Source of Deficit Financing (NBPF) will maintain economic stability while government deficit financing through Banking System Source of Deficit Financing (BSF) and Ways and Means Source of Deficit Financing (WM) will reduce economic growth thereby causing instability in the economy. We, therefore, recommend that deficit financing in Nigeria should be focused on the productive sectors of the economy. This is because deficit financing has merely resulted in economic instability indicating that sound policies are needed to achieve economic stability in Nigeria.

Keywords: Banking System., Budget, Deficit Financing, Economic Stability., Ways and Means, economic growth

Impact of National Fadama 111 Development Project Financing On the Socio-Economic Growth of Ebonyi State in Nigeria. (Published)

One of the major problems confronting Nigeria today is how to improve the quality of life in the rural areas, reduce the level of poverty and contribute to economic growth through Fadama 111 Development Project. The aim of this study is to investigate the impact of National Fadama Development Project Financing on the socio-economic growth of Ebonyi State using contents analysis and descriptive survey. It was discovered that counterpart contribution by Ebonyi State government has significant effect on socio-economic development of Ebonyi State and that there is long run correlation between counterpart contribution by Local Government Areas of Ebonyi State and socio-economic development of the state. We concluded that introducing the principles of comparative advantage, by the provision of credit facilities to the comparative group in Ebonyi State, only for those businesses that earned them the highest income should be encouraged.

Keywords: Counterpart, Fadama, Financing, Income, economic growth

Implications of Savings and Investment on Economic Growth in Nigeria (Published)

The implication of savings and investment on economic growth is mixed and controversial both theoretically and empirically. There is large empirical literature which examines the relationship between savings and economic growth in Nigeria. There is also a considerable literature which looks at the relationship between economic growth and investment. However, little attention has been given to examining the implications of savings and investment on economic growth in Nigeria. The aim of this paper is to evaluate the implications of savings and investment on economic growth in Nigeria using ordinary least square regression. Results for ADF and PP unit root tests show that all variables under consideration are I(1). The study also revealed that there is long run relationship between savings, investment and economic growth in Nigeria. The result of the regression indicates that change in gross domestic savings movements has negative and significant effect on the change in economic growth in Nigeria and that the change in gross domestic investment has positive and significant effect on the change in the Nigerian economic growth. We therefore recommend that government should set a sound and fertile environment in order to foster domestic saving that will help to increase the level of economic growth in Nigeria

Keywords: ADF, Investment, PP., Savings, economic growth

Implication of Savings and Investment on Economic Growth in Nigeria (Published)

There is large empirical literature which examines the implications of savings and investment on economic growth in Nigeria. However, little attention has been given to examining the implications of savings and investment on economic growth in Nigeria. The aim of this paper is to evaluate the implications of savings and investment on economic growth in Nigeria using ordinary least square regression. Results for ADF and PP unit root tests show that all variables under consideration are I(1). The study also revealed that there is long run relationship between savings, investment and economic growth in Nigeria. The result of the regression indicates that change in gross domestic savings movements has negative and significant effect on the change in economic growth in Nigeria and that the change in gross domestic investment has positive and significant effect on the change in the Nigerian economic growth. We therefore recommend that government should set a sound and fertile environment in order to foster domestic saving that will help to increase the level of economic growth in Nigeria.

Keywords: ADF, Investment, PP., Savings, economic growth

Assessing the Relationship between Diversification of Non-Oil Export Product and Economic Growth in Nigeria. (Published)

The study investigates the relationship between diversification of non-oil export products and economic growth in Nigeria from 1981 and 2014. The study examines the significant role of non-oil export product on real economic growth which the previous studies might have ignored and the aggregate non-oil exports product data used by them might bias their conclusions. In achieving the objectives of the study, Ordinary Least Square Methods involving Error correction mechanism, co-integration, over-parametization and parsimonious were adopted. Johansen Co integration test reveals that the variables are cointegrated which confirms the existence of long-run equilibrium relationship between the variables. Thus, this suggests that all the variables tend to move together in the long run. The study reveals that the there is significant relationship between diversification of non-oil export and economic growth in Nigeria during the period. This was evident in the study that the policies on non-oil products during the period in Nigerian do not sufficiently encourage non-oil export, thus reduce their contributions to growth. This is because the study reveals that agricultural and manufacturing components of non-oil export has positive and significant relationship with economic growth while solid minerals components has negative and insignificant relationship with economic growth in Nigeria. This study therefore recommend that government should enforce non-oil export policies towards resuscitating the failing non-oil export industry. The study among other things encourages the government to strengthen the legislative and supervisory framework of the non-oil products in Nigeria and diversify the economy to ensure maximum contributions from all faces of the subsectors to economic growth of Nigeria.

Keywords: Agricultural, Manufacturing, Non-Oil Export, Solid Mineral., economic growth

Implication of Deficit Financing On Economic Growth in Nigeria (Published)

Nigeria has been financing budget deficit overtime but their implications on economic stability have not been fully ascertained. This study sought to investigate the implications of deficit financing on economic stability in Nigeria between 1970-2013. The study adopted regression analysis. The study revealed that External Source of Deficit Financing (EXF), Non-banking Public Source of Deficit Financing (NBPF) and Exchange Rate has significant and positive implications on Economic Stability proxy for Gross Domestic Product (GDP), while Ways and Means Source of Deficit Financing (WM), Banking System Source of Deficit Financing (BSF) and Interest Rate (INTR) has negative implications on economic stability in Nigeria. The implication is that government deficit financing through External Source of Deficit Financing (EXF) and Non-banking Public Source of Deficit Financing (NBPF) will maintain economic stability while government deficit financing through Banking System Source of Deficit Financing (BSF) and Ways and Means Source of Deficit Financing (WM) will reduce economic growth thereby causing instability in the economy. We, therefore, recommend that deficit financing in Nigeria should be focused on the productive sectors of the economy. This is because deficit financing has merely resulted in economic instability indicating that sound policies are needed to achieve economic stability in Nigeria.

Keywords: Banking System., Deficit Financing, Economic Stability., Ways and Means, economic growth

Determinants of Financial Intermediation and Its Implications on Economic Growth in Nigeria (Published)

The main objective of this study is to investigate the effect of financial intermediation on economic growth in Nigeria. The study made use of ordinary least square regression analysis. The study shows that interest rate margin has significantly impacted on economic development in Nigeria, that credit to private sector has significantly impacted positive on the development of Nigerian economy and that the level of lending rate over the years has impacted negatively on economic growth in Nigeria. The policy implication is that improper management of financial intermediation will help the economy to develop. This means that there is significant and positive effect of financial intermediation on economic growth in Nigeria. We therefore recommend that Nigerian government should ensure that a component analysis of the real sector of the Nigerian economy be carried out with a view to having a better understanding of the inverse relationship between the loans to the private sector and the performance of Nigerian economy through financial intermediation.

Keywords: Credit to Private Sector, Financial Intermediation, Interest Rate Spread, Regression, economic growth

Exports-Led Industrialisation and Development through National Re-Branding and Best Practices: A Comparative Study of Botswana and Zimbabwean Economies (Published)

The purpose of this study was to look at the challenges facing Zimbabwe’s economy compared to Botswana and determine re-branding strategies Zimbabwe can adopt to portray a positive image. Case studies of countries whose economies miraculously recovered were given, they include countries like Korea, China, Japan, Taiwan and Malaysia. Document reviews and in-depth literature review were used to collect data. The findings of the study revealed challenges related to policy issues, corruption, relations with western countries over the land reform programme, corporate governance issues, and macroeconomic fundamentals such as government spending priorities, the country’s credit rating, judicial independence, and property rights. These were some of the factors that contributed to the meltdown of the Zimbabwean economy. The study recommended that Zimbabwe needs to re-establish relations with the west, ensure independence of the judiciary system, ensure property rights to attract foreign investment, improve corporate governance issues, and monitor its macroeconomic fundamentals.

Keywords: Economic Development, Export Led Strategies, Re-Branding, economic growth

African Trading Blocs and Economic Growth: A Critical Review of the Literature (Published)

There is general consensus among scholars, policy makers, and political leaders that the best way for African countries to develop is through regional trade. Regional integration and trading blocs have been suggested as ways that African nations can use to achieve sustained development and increase their participation in the global economy. Therefore, there is a need to evaluate the interrelationship between African trading blocs and economic growth of the African continent. This paper analyzes this link using theoretical and empirical literature reviews. The key findings are that intra-Africa trade is still low, despite the existence of numerous trading blocs, and that few of these contribute to regional trade creation. Poverty rates are still high and GDP does not seem to be positively influenced by the trading blocs. Many social, economic, and political challenges also weaken African trading blocs and their ability to promote integration and trade. Addressing these hindrances would strengthen the continent’s trading blocs and enhance their positive impact on intra-African trade and economic growth.

Keywords: African Trading Blocs, International Trade, Regional Integration, economic growth

Striving To Become an Entrepreneurial University to Bridge the Gap between Knowing and Doing: A Study on Al-Zaytoonah Universiy of Jordan (Published)

In the age of technology and knowledge communities, labor and capital are no longer considered the main production factors. Knowledge and human capital are becoming exceedingly important in strengthening the economic growth and development. Universities are one of the leading resources for knowledge generation. Research is considered one of the pillars universities rely on promoting its faculty, renewing its license or even gaining international accreditation. With all published researches, a gap between this knowledge and practicing it is becoming increasingly noticeable. This gap is called the Knowing-Doing-Gap. To reduce this gap, researchers and universities worked on setting a framework to ensure that part of the knowledge generated is applied and practiced in the market. Such universities are called “Entrepreneurial Universities”. This paper explores the definition of entrepreneurial universities and the conditions for becoming an entrepreneurial university (on both macro and micro levels). Furthermore, the paper sheds light on the steps taken by Al-Zaytoonah University of Jordan striving to become an entrepreneurial university through bridging the gap between knowledge and application. The paper answers the following question: “What steps is Al-Zaytoonah taking to address the knowing-doing-gap?”

Keywords: Entrepreneurial University, Jordan, Knowing Doing Gap, Knowledge, Learning, economic growth

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