This study examined the relationship among health expenditure, health outcomes and economic growth in Nigeria for the period between 1981 and 2017. This study adopted the Toda-Yamamoto causality framework to examine these relationships. The Augmented Dickey Fuller unit root test was used to check for maximum order of integration of the variables used in the study and the result was one while the Autoregressive Distributed Lag (ARDL) Bounds test approach to cointegration was used to investigate if a long-run relationship exists among the macroeconomic variables used in the study and the result was in the affirmative. The results of the Toda-Yamamoto causality tests showed a unidirectional causality running from health expenditure to infant mortality while there is no causality between real GDP and infant mortality; a unidirectional causal relationship running from health expenditure and real GDP to life expectancy and maternal mortality; and a unidirectional causal relationship running from real GDP to health expenditure. This study therefore recommended that the Nigerian government should make concerted efforts geared towards increasing the health expenditure at least to meet up with the WHO"s recommendation that all countries should allocate at least 13 per cent of their annual budget to the health sector for effective funding as this would bring desired health outcomes and employ the use of modern technology and the services of professional health personnel should be sought to combat the high incidence of maternal and infant mortality in the health sector in Nigeria.
This study presents a small macroeconometric model to forecast and simulate policy options for the Nigerian economy. The model consists of ten behavioural equations and five identities made up of ten endogenous variables and thirteen exogenous variables. Autoregressive distribution lag (ARDL) framework is used to estimate the behavioural equations using annual time-series data for the period 1981-2014. The predictive ability of the model is evaluated and found to be satisfactory as the mean absolute error (MAE), root mean square error (RMSE) and Theil inequality coefficient are considerably small. Policy simulations to quantify the impact of shocks to government expenditure, exchange rate and crude-oil price on the economy are analysed. The results shows that a positive shock in government expenditure raises aggregate output, total exports, total import, gross fixed capital formation, exchange rate, consumption, and inflation rate while interest rate falls; a negative shock to exchange rate has a negative effect on gross fixed capital formation and a positive effect on aggregate national output, consumer price level, interest rate, consumption, total export and total imports; and a negative shock in oil prices results in an increase in total imports, total exports, consumption, exchange rate, gross fixed capital formation and aggregate national output. Hence, the study recommends that the monetary authorities employ a managed-floating exchange rate to address the volatility in exchange rate and government should formulate and implement policies aimed at diversifying the economy to cushion the shocks that result from oil price volatility in the international market.
Disaggregating the Nigerian economy into oil and non-oil sector, this study investigates the asymmetric effects of oil price on sectoral output in Nigeria using data spanning the period between 1981 and 2017. It adopts the novel Nonlinear Autoregressive Distributed Lag (NARDL) model developed by Shin et al. (2014) in which short-run and long-run nonlinearities are introduced via positive and negative partial sum decompositions of oil price. The Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) unit root test results show that the variables used in this study are a combination of I(0) and I(1) series thus justifying the use of the Bounds test approach to cointegration whose result was in the affirmative. The results of the short-run and long-run NARDL models showed that oil price has asymmetric effects on the performance of the oil and non-oil sector of the Nigerian economy in the short-run but only have long-run asymmetric effects on the non-oil sector. In addition, the results revealed that oil price shocks (positive and negative) have positive effects on non-oil output while a positive and negative oil price shock have corresponding effects on oil output in the short run. Moreover, oil price shocks have more effects on the oil sector than the non-oil sector. Hence, this study recommends that the Nigerian economy be diversified to help cushion the effects of the uncertainties associated with the global oil market and to adopt structural reforms in the non-oil tradable sector to stimulate sustainable growth of the economy.
In recent times, increasing attention is being paid to examine the developmental impact of remittances inflow, particularly due to the emergence of remittances as the fastest growing source of capital flows for developing countries. To this end, we contribute to the literature by analyzing the interactive effects of remittances and financial development on savings-investment gap for a panel of 18 Sub-Saharan African (SSA) countries over the period of 1990 to 2017. Our Panel ARDL model estimation showed that higher remittances have significant reducing effect on savings-investment gap in the long run, and this becomes magnified while accounting for individual and interactive effects of remittances and financial development. We also uncovered the widening effects of rising real GDP growth and bank deposits over a long-term horizon, whereas higher private sector credit widens the savings-investment gap only in the short-run. Meanwhile, liquid liabilities have no significant effect on savings-investment gap both in the short run and long run. We further offered evidence on the complementarity and substitutability effects of remittances and financial development over the short-term and long-term horizons, respectively. We also demonstrated the superior forecast accuracy of the predictive savings-investment gap model - that accounts for both individual and interactive effects - over other specifications, and this is robust to the choice of financial development indicators, samples and forecast horizons. Our results underscore the urgent need for a reduction of transfer costs, so as to encourage both migrant workers and their beneficiaries to make use of the official channels for sending and receiving remittances in the region.
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