This study examined the relationship between revenue generation and economic growth in Nigeria during the 45-year period, 1971 to 2015. This period heralded the sweet side of global energy crisis that precipitated the petrodollar windfall following steep rise in crude oil prices and the sour side that saw the economy shrink as a result of downward spiral of or crash in global energy prices and/or decline in oil production (slump non-oil boom). Using the ANCOVA model, the study expressed the change in growth rate of GDP as a function of various dimensions of tax, chiefly, change in period lag values of value added tax, personal income tax, company income tax, petroleum profit tax and custom and excise duties with a dummy variable that captures the contribution of oil revenue windfall. The results showed no significant difference in average changes in economic growth between the oil boom and oil slump periods. This suggests that Nigeria’s petrodollar windfall had no significantly stimulating effect on the country’s growth and development trajectory during the 45 years. The findings of this study adumbrate the anecdotal evidence of poor resource governance architecture that has characterized not just Nigeria’s petroleum industry but also the country’s macroeconomic management. The resonance with, and the attendant lesson from, the Dutch Disease Syndrome sequel to the country’s historicity of mismanagement of resources including the petro-dollar windfalls, is the major policy implication of this study
Unemployment Rate, Gender Inequality and Economic Growth in Nigeria “A Short-Run Impact Analysis” (Published)
This paper examines the short-run impact of gender inequality (proxy by primary and secondary school enrollment) and economic growth (real gross domestic product) on unemployment rate in Nigeria, and also the study determines how much of the forecast error variance of unemployment can be explained by exogenous shocks from variables (gender inequality, economic growth, and population growth rate). Thus, the study using Engel Granger Error Correction Model and Dynamic Stochastic Variance Decomposition Model on a time series data collected from Central Bank of Nigeria Statistical Bulletin. The error correction results in both model 1 and model 2 are robust and consistent with their signs; the impact of gender inequality is positive in both short run models, but significant only in model 1 before the control variables were introduced. Again, the variance decomposition result indicates that gender Inequality emits the highest impulse on the rate of unemployment at 34.735% on average of the ten periods. While economic growth has a negative impact on the rate of unemployment for the two models and exerted only 8.438% impulse on average. The variance decomposition results also showed that unemployment rate transmitted on average of 78.453% impulse on itself for the 10periods under review. Exchange rate, inflation rate, and gross capital formation emitted 28.68%, 10.78%, and 6.81% respectively on average on unemployment rate. Finally, population growth rate transmitted 5.59% impulse on unemployment. There is a long run relationship between the variables and the speed of adjustment towards equilibrium is 52%. Thus, we conclude that gender inequality is a strong factor of unemployment and policy makers and government should embark on developing laws that will reduce/eradicate gender disparity in Nigeria.
Inflation, Unemployment and Economic Growth: Evidence from the VAR Model Approach for the Economy of Iraq. (Published)
This study investigates the impact of inflation and unemployment on the economic growth of Iraq. Considering the fact that the majority of the studies on the Phillips Curve have been done in the context of developed economies and on an aggregate level, this study focuses on Iraq, a single developing economy (a disaggregated level) and aims to empirically analyse the impact of Unemployment and inflation on economic growth in the economy of Iraq. The research results indicate that there exist an equilibrium impact between unemployment and inflation in Iraq thereby supporting the validity of the Phillips Curve hypothesis
The effectiveness of development assistance in the economic growth of developing countries and especially in their trade is complex and often discussed. This article tries to have a look on the cross-border trade situation of WAEMU member states and the impact of development aid on their economic growth through cross-border trade, which is seen as a driver of the economic growth of countries. The results of the GMM and the individual specific effects on the panel data for the period 2005-2015 showed a low positive impact of aid on economic growth through cross-border trade. These results have, however, raised other problems.
This paper empirically studies the export diversification determinants in west Africa sub-region as diversification is critical for the region to promote sustainable development and economic transformation. The study used regression to analyze the data sourced from 17 west African countries from year 1995-2015. The results suggest that per capital income, human capital, investment, geographical location and good governance are significant drivers of export diversification, while terms of trade and population have negative relationship with export diversification in Africa. The evidence shows that export diversification is necessary in managing sustainable development in Africa. The study recommend among other things that the region should come up with an efficient governance that formulate and implement sound economic policies, create investment friendly environment and should pursue an aggressive process of export diversification that will result in buoyant and robust economy which will reduce high dependent on imported goods.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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
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.
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.