This study examined the connectedness between the banking sector and real sector in Nigeria using a network analysis approach. It sought to seek if the shock from the real sector can be transferred to the banking sector in the context of systemic risk analysis. The findings reveals that base on the bank credit transfer from the banking sector to other sectors, the bank-real sectors are closely connected. Consequent of this, shocks from the real sector can spillover to the banking sector and vice versa. The results also, shows that the transport sector is the net transmitter of shocks while, the construction sector is the net recipient of shocks. They dynamic connectedness analysis showed that over the period of study bank-real sector connectedness varies with time and in response to economic phenomena. The study recommends that systemic risk surveillance should not be limited to the financial sector alone. Again, development policies should explore other sectors too rather than banking solely on the traditional agriculture-manufacturing sector development policy.
Size and Growth of Public Investment in Nigeria: Implications for Real Sector Development (Published)
This paper offers empirical evidence linking public investment to real sector development in Nigeria during 1981-2017. It specifically employed autoregressive distributed lag (ARDL) model to analyze the impacts of public investment in economic, social and community services and gross public investment as a ratio of GDP on agricultural and manufacturing value added. . The short run result showed that public investment in economic, social and community services impact positively on agricultural value added in the short run. The positive impact of investment in social and community services economic services was greater than that of economic services by a margin of 0.027 percent. This suggests that investment in human capital formation such as education and healthcare delivery seems to provide greater opportunity for agricultural development. Additionally, public investment in economic services also exerts significant positive impact on manufacturing value added. The result further showed that gross capital expenditure as a ratio of GDP impact positively on agricultural and manufacturing value added in the short run. It was evidence from the result that its impact on agricultural value added was stronger in the long run. Accordingly, it is recommended that policy makers should step up investment in social and community services in order to improve human capital required for real sector development in Nigeria.