The determinants of current account balance in an oil‐rich exporting country: the case of Nigeria

Uneze, Eberechukwu; Ekor, Maxwell

doi:10.1111/j.1753-0237.2012.00221.x

Cited by 6 publications

(5 citation statements)

References 22 publications

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“…Moreover, using the VAR method, Uneze and Ekor (2012) examined the relation between a number of oil-related variables and current account balance; and also the long-term relationship between current account balance and oil related variables between 1970 and 2008. The study revealed that oil variables play a crucial role in explaining the current account position in the long-run, while oil price was a key variable explaining current account balance in the short-run in Nigeria.…”

Section: Brief Theoretical and Literature Reviewmentioning

confidence: 99%

“…But on the other hand, according to Ghassan & El-Jeefri (2018), current account volatility is only influenced by local shocks. Contrary were the determinants of current account within the scope of oil-related variables, and Olumuyiwa (2008) and Uneze & Ekor (2012), find that oil price, oil revenue, and oil balance as the determinants of current account. In another study, Adegboyega et al (2019) consider the causal relationships between macroeconomic factors, demographics, and current account balances in Nigeria, and shows that causality is not caused by current account balance, but by domestic saving and investment.…”

Section: Introductionmentioning

confidence: 97%

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The Effect of Saving-Investment Nexus on Current Account Balance in Nigeria

Adegboyega

Oladeji

2020

Tanzanian Economic Review

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This paper explores the impact of both long- and short-term saving-investment nexus on Nigeria’s current account balance. It examines the relationship between domestic savings, investments and current account balance by analysing the position of selected demographic variables in Nigeria, both in the short- and long-term, using the ARDL cointegration method, and a sample period from 1980 to 2018. The study tested whether there was empirical evidence supporting the life-cycle hypothesis (LCH) in Nigeria. However, the study revealed that the coefficient of error correction was negative and highly significant, as well as establishing a long-term cointegration. The study revealed a negative sign of life expectancy; and the ratio of total age dependence was found to be statistically significant, thus indicating that a unit increase in life expectancy and the ratio of total age dependence could result in a decline in current account balance in Nigeria by 1.2796 (127%) and 6.43038 (643%), respectively. This result supported the presence of the LCH theory on saving actions in Nigeria, since people could borrow. In addition, the population growth exhibited a positive relationship with current account balance. Therefore, a unit change in the population age structure is expected to influence saving, investment and current account balance; especially with an increase in population, because the current account is, by definition, equal to the saving-investment balance. JEL Classification: E21, F32, J13

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Section: Brief Theoretical and Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 97%

The Effect of Saving-Investment Nexus on Current Account Balance in Nigeria

Adegboyega

Oladeji

2020

Tanzanian Economic Review

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“…The current account balance shows the ability of a country to export and import goods and services, which reflects the strength of international competitiveness and the extent to which a country can utilize its resources [2]. Overall, the current account represents the net value between the credit side (transactions that give rise to the right of residents of a country to receive payments) and the debit side (transactions that create an obligation to pay residents of a country to residents of other countries) of all transactions that recorded in the current account component system.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Monetary Policy and Macroeconomic Indicators on the Current Account in Developing ASEAN

Andini,

Zahara,

Suci

2024

KSS

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The current account balance is a component of the balance of payments, in which a surplus or deficit is a form of a country’s external balance or imbalance. Since the 2008 financial crisis and the COVID-19 pandemic, several countries, especially developing countries, have experienced external imbalances, which is related to a continuous pattern of transactions with the rest of the world. Developing countries in the ASEAN region are often vulnerable to experiencing external imbalances which are reflected in their current account balance, which every year the country continues to fluctuate and tends to decrease until it experiences a current account deficit. This research was conducted to analyze the impact of monetary policy and macroeconomic indicators on the current account situation of developing countries in the ASEAN region during the 15 year period of 2007–2021. The Current Account Balance as the dependent variable and the independent variable uses Interest Rates in explaining monetary policy and macroeconomic variables including Exchange Rate, Inflation, Gross Domestic Product, Foreign Direct Investment, and Trade Openness. This study analyzes long-term and short-term effects using the VECM panel model. The results show that Interest Rates in the short term has no effect, but in the longer term has a significant negative effect. The Exchange Rate in the short term and long term have a significant positive effect. Inflation and GDP have no effect in the short term but have a significant negative effect in the long term. FDI has a significant positive effect in the short term and the long term. And finally, Trade Openness in the short term has a significant positive and in the long term has a significant negative effect. Keywords: current account balance, interest rate, macroeconomic, VECM panel

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“…While the impact of trade and financial liberalisation on growth and macroeconomic variables has been extensively researched in Nigeria (Akpan, 2004;Kaita, 2015;Saifullahi and Tanimu, 2015;Danlami et al, 2018;Aigheiyisi and Isikhuemen, 2018;Apanisile and Okunlola, 2020;Aremo and Arambada, 2021;among others), little attention has been paid to unravel the impact of trade and financial liberalisation on current account balance. Several studies looked at macroeconomic and institutional factors, monetary policy, fiscal policy shock, and adjustment policy as determinants of current account (Longe, Muhammad, Ajayi and Omitogun, 2019;Danmola and Olateju, 2013;Uneze and Ekor, 2012;Oshota, 2015;Udah, 2010;Chete, 2001;Kudaisi and Olomola, 2019;Sule and Shuaibu, 2020;among others). This is surprising because trade and financial openness might have a major influence on Nigeria's current account balance especially as the country increases its trade horizon and financial sector competition.…”

Section: Introductionmentioning

confidence: 99%

Trade, Financial Liberalisation and Current Account Balance in Nigeria

Kudaisi¹

2022

OJBE

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This paper examines the individual and interactive impacts of trade and financial liberalization on Nigeria’s current account balance between 1986 and 2019. An autoregressive distributed lag technique is used to investigate the short- and long-run effects of the de facto measure of trade openness and the de jure measure of financial openness by Chinn-Ito on the current account. The finding suggests that financial liberalization, in particular, has an insignificant negative effect on the current account, whereas trade has a non-significant positive impact in the long-run. The interaction of the variables in the long-run produces significant positive influence on the account. The short-run effects show a positive impact of financial liberalization, whereas the interplay of the variables has a negative impact on the current account. The study concludes that the interaction of trade and financial liberalization is critical in improving the current account balance in Nigeria.

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The determinants of current account balance in an oil‐rich exporting country: the case of Nigeria

Cited by 6 publications

References 22 publications

The Effect of Saving-Investment Nexus on Current Account Balance in Nigeria

The Effect of Saving-Investment Nexus on Current Account Balance in Nigeria

The Impact of Monetary Policy and Macroeconomic Indicators on the Current Account in Developing ASEAN

Trade, Financial Liberalisation and Current Account Balance in Nigeria

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