The study investigated the impact of transnational trade on economic growth in Nigeria. To achieve the purpose of the study, transnational trade was disaggregated into: oil import, oil export, non-oil import, non-oil export, trade openness, foreign direct investment share of real gross domestic product and real effective exchange rate and regressed on economic growth proxied by growth rate of real GDP. Data on the variables above were sourced from the Central Bank of Nigeria statistical Bulletin and the World Bank database. The data were analysed using the Autoregressive and Distributed Lag (ARDL) approach due to the mixed order of stationarity of the variables. The results indicate that in the short run, non-oil export has positive and significant impact on economic growth while oil import and FDI share of real GDP have negative and significant effect on economic growth. The long run result shows that: oil import has direct and insignificant effect on growth while non-oil import, non-oil export, FDI share of real GDP and real effective exchange rate have negative and insignificant impact on economic growth. From the results the study concludes that transnational trade has serious implication on economic growth in the short run and less effect on economic growth in the long run in Nigeria over the period of this study. Based on these findings, the study suggests that policies should be geared toward increase in non-oil export, reduction in oil import, review of FDI inflow policies and trade liberalization as possible ways of improving the productive capacity of the Nigerian economy.
The incessant bank distress coupled with the poor financial intermediation capacity of the banking sector has been identified as the main problems of the banking subsector in Nigeria. This underscores the continue quest for increase capital base of banks as possible remedy to these problems. This development makes it imperative for us to examine how capitalization has affected banks profitability in Nigeria. To achieve our objectives, both panel and Partial Frontier efficiency analyses were utilized in this investigation. Using gross profits of 18 DMBs as dependent variable while capital base of DMBs, real income (GDP), financial deepening, interest rate and inflation rate are independent variables, we found that: capitalization has a significant impact on profitability of banks, while financial development, real income level were found to had contributed less to profitability of banks in Nigeria. It was further discovered that, interest rate has less implication on the profitability, while the impact of inflation on profitability of banks was positively but insignificantly. We also found that 58 % of the total variation in profitability is influenced by capital base, financial deepening, interest rate, GDP and price level in Nigeria over the period. The study further revealed that impact of capitalization on profitability of banks is the same across the banks. Finally, using the partial efficiency frontier analysis, we found that Unity Bank and UBA performed better with improved capital base while Union and Heritage Banks performed abysmally with high capital base given the very low efficiency scores. Based on these findings, the study recommends; periodic upward review of capital base of banks, stable macroeconomic policy, and creating enabling environment for investments as ways of enhancing an efficient financial sector and growth of the Nigerian economy.
This study investigated the impact of trade liberalization on economic growth in Nigeria. In order to achieve the objectives of examining the trend in trade and growth and impact of trade liberalization on economic growth, times series data were sourced and analysed using the Autoregressive Distributed Lag model (ARDL). Findings from the study revealed that oil export and non-oil import impacted positively and significantly on economic growth both in the short and long runs. The results also show that oil and non-oil imports retarded economic growth in both short and long run periods. Specifically, oil import was found to significantly diminished economic growth in Nigeria. Nigeria imports refined petroleum products hence spends huge financial resources to finance its imports. This has affected the economy negatively as funds meant for other developmental purposes are spent on petroleum products importation. Based on these findings, the study suggests increase in oil export by providing conducive environment for oil operations, improvement in non-oil export by diversifying the products base of the economy and building local capacity in oil exploration and refining in order to end petroleum products imports in Nigeria.
This study examined the effect of public borrowing on growth of the Nigerian economy over the period 1980-2015. Employing the ARDL method in analysing data sourced from the CBN and World Bank, the results indicated that external debt positively and significantly stimulated growth while domestic debt significantly retarded growth in Nigeria both in the long and short runs. Total debt services stock was found from our result to negatively and insignificantly affected economic growth while net foreign direct investment and foreign exchange reserves impacted on economic growth positively and were both significant at 5% level at lag 3. Though the goodness of fit was robust and reasonable in explaining changes in growth, the nonsignificance of the error correction term implies that economic growth reacts slowly to changes in public debts dynamics in Nigeria. Based on this results, the study recommends: reduction in local borrowing to enhance private investment, prudent utilization of borrowed funds to enhance results, better debt management strategies to ensure efficiency and borrowing from organization with low interest rate and longer term in order to reduce the burden on the economy and the growth of the economy.
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