This paper examines the effect of insecurity on economic growth in Nigeria. Apart from its direct effect on the populace, it also affects the economy. Using elements of descriptive qualitative analysis and data from secondary sources, the paper analyzed its effect on some economic parameters. The analysis showed that insecurity affects economic growth by drying-out investments, increases unemployment and dwindles government revenue, amongst others. Despite these effects, government capital expenditure on internal security did not grow astronomically to match the hydra-headed problem. This paper therefore recommended an increase in capital expenditure on internal security and concludes with a discussion of some policies to be designed and targeted at addressing the economic effects of insecurity.
The high incidence of poverty in Nigeria coupled with the alarming rate of unemployment has raised concerns among experts as to their likely relationship with food insecurity. This study examined the nexus between poverty, unemployment and food insecurity using the Johansen cointegration test and the vector error correction model. The result from the Johansen cointegration test suggests a long-run relationship between food insecurity, poverty and unemployment. Findings from the vector error correction analysis showed a positive but insignificant relationship between poverty and food insecurity such that a percentage change in poverty in the current period is associated with a 0.09 per cent increase in food insecurity on average, ceteris paribus. Besides, a positive and significant relationship subsists between unemployment and food insecurity where an increase in unemployment exacerbated the latter. Clearly, a 1 per cent deviation in the previous period unemployment level is associated with a 1.2 per cent degeneration of the food insecurity position in the short run. In the same vein, a 1 per cent change in unemployment in the current period causes a 1.5 per cent aggravation of food insecurity. Following the findings, this study recommends a multi sector-specific approach to solving the issue of poverty in Nigeria targeting agriculture and its employment generating capacity, creating the enabling environment through infrastructure development and improving the ease of doing business for the private sector to strive and enhance its employment generating capacities. The study concludes with a call for the implementation of a holistic food security policy targeting improvement in crop yield, internal security problems and the proper funding of agriculture to be effective.
The burgeoning remittances into Nigeria and their effect on the economy have received renewed attention in recent times. Literature has suggested the existence of a relationship between remittances and food security. The extent to which this is true for Nigeria is uncertain. Using Vector Error Correction Model (VECM), this study examined the link between remittances and food security using secondary data for the period 1980 to 2018. Findings revealed a robust long and short-run relationship between remittances and food security. In the short-run, a positive and significant relationship was found between remittances and food security in the current period such that a 1 per cent increase in remittances was associated with a 5.08 per cent improvement in food security. In the long-run, a cointegrated relationship was observed as the error correction term depicting this relationship was well-behaved, properly signed and significant indicating that any previous period deviation in long-run equilibrium is corrected in the current period at an adjustment speed of 28.8 per cent. In addition, the Granger test suggests a unidirectional causality running from remittances to food security such that past values of remittances determined food security during the period investigated. Consequent to the findings, the study recommended with a caveat, the design and proper implementation of a diaspora and remittances policy to cater for the welfare of Nigerians in the diaspora to improve remittance receipts and by implication, food security. However, since remittances alone cannot guarantee food security in Nigeria, this study further recommends a holistic and multidimensional approach to address the food security challenge and close the food deficit gap.
This study investigated the impact of negative oil price changes on macroeconomic aggregates in Nigeria from 1981 to 2020 using the autoregressive distributed lagged (ARDL) and the vector error correction models. Evidence from the findings showed that unemployment, foreign direct investment, and real gross domestic product are important determinants of oil price vagaries. In addition, there is empirical support for a positive relationship between oil price and unemployment on the one hand and a negative relationship between oil price and imports, foreign direct investment, and real gross domestic product on the other hand in both the short and long run. This implies that any decline in oil price is associated with a decrease in foreign direct investment and imports, and an increase in unemployment thereby resulting to the worsening of real gross domestic product in Nigeria during the period. In view of the findings, the study recommends a culture of uninterrupted savings of oil proceeds during episodes of oil price boom and by implication boosting of foreign reserves to provide sufficient cover for imports during periods of oil price decrease. In addition to this recommendation is the continuous clamour for a properly diversified economy away from oil dependence. In periods of negative oil price shocks which discourages investment, the government should encourage investors through various incentives such as tax holidays and havens, reduce cost of funds using the appropriate agency of government and ensure the provision of enabling environment and infrastructure (such as power, security, and roads) for investments to strive and improvement in the ease of doing business in the country. This will result in job creation; reduce unemployment and poverty, thereby improving the gross domestic product.
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