Nigeria's economy has been largely dependent on external borrowing, which has resulted in an increasing debt burden. Policymakers and economists have debated the influence of external debt on economic growth. Therefore, this study analyzed how external debt affects Nigeria's economic growth and explored the factors that determine external debt in the nation. The study utilizes an Ex Post Facto research design, and data from the Central Bank of Nigeria and the World Bank report from 1990 to 2020 was used. Vector error correction regression model, granger causality test, unit root and co-integration tests were employed for the analysis. Findings revealed that external debt servicing, exchange rate and external debt have significant but adverse effect on economic growth, confirming the debt overhang effect. However, external reserves portends positive and significant effect on GDP. Moreover, empirical results revealed that trade openness, government expenditure, inflation and exchange rates are salient factors that affect external debts in Nigeria. In terms of causality, all the tested variables have causal relationship with external debt. The study recommends that Nigeria government needs to adopt a sustainable borrowing and debt management strategy to avoid excessive external debt accumulation and its negative implications for the economy.
Banks’ profitability is vital component of economic growth, its significance extends from’ sustainability of banks to macroeconomic stabilization. Thus, this study assessed the effect of banks’ specific factors and macroeconomic variables on the profitability of microfinance banks (MFBs) in Nigeria from 2012-2021. The purposive sampling technique was employed to select 15 licensed MFBs from the South West region of Nigeria. This study employed return on assets (ROA) as an indicator of profitability. Secondary data was elicited from annual published reports of the selected MFBs. Descriptive, regression and correlation techniques were used to analyse data. Findings revealed that MFBs age and size play major roles in the determination of the banks’ profitability; non-performing loans substantially influenced MFBs profitability though adversely. Liquidity rate exerted negligible but positive influence on MFBs profitability. Furthermore, gross domestic product and exchange rate influenced MFBs profitability considerably. In contrast, the Inflation and Interest rate had an adverse but noticeable effect on banks’ profitability. The results provide signifncant directions to banks as well as related policy-makers. Bank management should take cognizance of these salient factors and endeavor to the lower non-performing loans in order to enhance MFBs profitability.
Poor funding which incapacitated the Small and Medium Enterprises (SMEs) in Nigeria from assisting in creating employment opportunities motivated this work. This research investigated the effect of monetary policy instruments on SMEs financing by the Deposit Money Banks (DMBs) in Nigeria. It specifically evaluated how monetary policy instruments affect DMBs credit allocation to rural SMEs and also analysed the effect of total money supply on credit allocation to private sector. The study relied on secondary data from the Central Bank of Nigeria's Statistical bulletin and World Bank Financial Indicators with a duration of 30 years . The data comprised of rural DMBs' Credit to rural SMEs, total credit to private sector, total money supply, liquidity ratio, cash reserve ratio, bank rate, Deposit rate, Inflation rate and Gross Domestic Product. Data was analysed using Auto-Regressive Distributed Lag (ARDL) Bond test approach. The results showed that credit to rural SMEs and its determinants co-moved in the long run significantly; money supply positively and significantly affects private sector in the long run. In contrast, there is no long-term relationship between bank lending to SMEs and their determinants. It is therefore recommended that DMBs should adequately grant credit to rural SMEs customers for productive purposes. Also, monetary policy makers should continue to maintain adequate level of money supply so as to consistently influence credit to private sector positively.
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