Investment In Nigeria Research Articles

Government Capital Expenditure and Private Sector Investment in Nigeria: Co-integration Regression and Toda-Yamamoto Causality Analysis

This paper analyses the relationship between government capital expenditure and private investment in Nigeria using time series data spanning from 1981 to 2016. Government capital expenditure was disaggregated into different components and ADF unit root test was employed to establish the stationarity properties of the variables in the model. The result of Johanson co-integration test revealed that the variables have long run relationship. Co-integration regression results suggested that capital expenditure on physical assets and defense displaced private sector investment while government capital expenditure on human capital and public debt servicing promote private sector investment in Nigeria. Furthermore, the results of T-Y causality revealed the bidirectional causality private sector investment and government capital expenditure in Nigeria. Based on these findings, the paper recommends that government capital expenditure should be channel to human capital in order to promote private sector investment in Nigeria. In addition, the Nigerian government should pay more attention to capital expenditure on physical assets since it has a significant impact on private sector investment. Lastly, Nigeria government should address the issue of budget delay, corruption, and mismanagement in Nigerian institutions.

Taxes and Foreign Direct Investment (FDI) in Nigeria

This study examines the relationship between the different forms of taxes collected and foreign direct investment in Nigeria. The study adopted the ex-post facto research design and covers a period of thirtyfour years from 1982 – 2015. Secondary data were analysed using the Autoregressive Distributed Lag (ARDL) regression technique. The study found that there is a negative and significant relationship between taxes collected in the form of National Information Development Fund and Education Tax and Foreign Direct Investment. Also, that there exists a positive and significant relationship between Value Added Tax, Companies Income Tax and Foreign Direct Investment, while Petroleum Profits Taxes and Custom and Excise Duties do not influence Foreign Direct Investments in Nigeria. Based on the findings, the study recommends that there is need for government to come up with more friendly economic policies such as tax incentives and macroeconomic adjustments that will enhance continuous increase and growth of the nation's GDP and by implication, attracts FDI into Nigeria.

Effect of Exchange and Interest Rates on Foreign Direct Investment in Nigeria 2006-2018

This study examined the Effect of Exchange and Interest Rates on Foreign Direct Investment in Nigeria 2006-2018. Secondary data was used for the study and it was obtained from the financial statement of the Central Bank of Nigeria for the period 2000-2018. The unit root property of the data was analyzed using the Augmented Dickey Fuller Test and the variables were all stationary at first difference. Also, Johansen Co-integration test statistics was used to test the cointegrating nature of the data while the longrun and the shortrun relationship between the variables of the study were examined using the error correction model. The data was tested for normality using the Jarque-Bera test statistics. The result of the study indicates that a positive relationship exist between Exchange Rate and Foreign Direct Investment (FDI). The relationship is statistically significant (as tcal = 7.25891) is greater than ttab = 2.101 df 17) and in line with a priori expectation. The longrun co-integrating equation shows that a negative relationship exit between Interest Rate (INT) and Foreign Direct Investment (FDI) and the result is not statistically significant (as tcal = -12.5639 is greater than ttab = 2.101 @ df 17). Inflation (INF) was negatively related to Foreign Direct Investment (FDI) in the long-run. A unit increase in Inflation (INF) will lead to a corresponding increase in Foreign Direct Investment by GDP by 23.37%. This relationship is statistically significant (p<0.05) (as tcal = -12.5639) is less than ttab = 2.101@ df 17) and in line with our a priori expectation. It was recommended among others that board composition effect on total voluntary disclosure can be increased when appointment is made sometimes of an outside director who is an official of a financial firm as it has been found to increase firm share value. It was concluded that FDI is an important avenue for investment in agricultural, manufacturing and transfer of technology to an economy. It was recommended among others that the government should seek to stabilize exchange rates, through adoption of sound fiscal and monetary policies.

Growth Effects of Capital Inflows and Investment in Nigeria

Growth Effects of Capital Inflows and Investment in Nigeria

Impact of Infrastructure on Foreign Direct Investment in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach

Impact of Infrastructure on Foreign Direct Investment in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach

Macroeconomic Variables and Private Investment: A Two Dimensional Study from Nigeria Economy

The study investigated the impact of macroeconomic variables on private investment in Nigeria for the period 1990 to 2016. To achieve these objectives, the study tests for the study modeled private equity and private real investment as the function exchange rate, financial sector development, and interest rate, openness of the economy, real gross domestic product, inflation rate and broad money supply. Ordinary least square method of data analysis was used.
 From model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. The coefficient of determination (R2) proved that the independent variables can explain 62 percent variation on private real investment; the f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. The effect of macroeconomic variables on private equity investment was presented in model two. The study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. Inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. The R2 proved that the independent variables can predict 66.9 percent variation on private equity investment. The f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. We conclude that macroeconomic variable have significant effect on private investment in Nigeria. We recommend that interest rate must be able to encourage higher private investment by increasing the real interstate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. Policies should be formulated by investors and government to discourage factors that affect negatively private investment.

Macroeconomic Variables and Private Investment: A Two Dimensional Study from Nigeria Economy

The study investigated the impact of macroeconomic variables on private investment in Nigeria for the period 1990 to 2016. To achieve these objectives, the study tests for the study modeled private equity and private real investment as the function exchange rate, financial sector development, and interest rate, openness of the economy, real gross domestic product, inflation rate and broad money supply. Ordinary least square method of data analysis was used. From model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. The coefficient of determination (R2) proved that the independent variables can explain 62 percent variation on private real investment; the f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. The effect of macroeconomic variables on private equity investment was presented in model two. The study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. Inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. The R2 proved that the independent variables can predict 66.9 percent variation on private equity investment. The f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. We conclude that macroeconomic variable have significant effect on private investment in Nigeria. We recommend that interest rate must be able to encourage higher private investment by increasing the real interstate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. Policies should be formulated by investors and government to discourage factors that affect negatively private investment.

FISCAL POLICY MANAGEMENT AND PRIVATE INVESTMENT IN NIGERIA

The Nigerian government over the years embarked on diverse macroeconomic policy options to tinker the economy on the path of growth and development. Amongst the policy options readily employed is that of fiscal policy. Despite the lofty place of fiscal policy in the management of the Nigerian economy, the economy is yet to come on the path of sound growth and development. The intent of fiscal management is essentially to stimulate economic and social development by pursuing a policy stance that ensures a sense of balance between taxation, expenditure and borrowing that is consistent with sustainable growth. However, the extent to which fiscal management engenders private investment continues to attract theoretical and empirical debate especially in developing countries like Nigeria. In light of this, the present study fills the gap by examining the relationship between fiscal management and private investment in Nigeria between 1987 and 2015. The study employed ex-post facto research design. Secondary time series data were used for the study and these were sourced from CBN statistical bulletin and World Development Indicators, 2015. The data collected were analyzed using the Autoregressive Distributed Lag with inferences drawn at 5% significance level. The result of the relationship between fiscal management and private investment in Nigeria showed that inflation, capital expenditure, indirect tax and non-tax revenue had positive and significant effects on private investment (β=0.02, t=19.04; β=0.59, t=40.13; β=1.70, t=17.07; β=1.05, t=22.03 respectively) in Nigeria, while domestic credit to private sector had negative but significant effect on private investment (β = -0.09, t = -17.26) in Nigeria within the period. The study concluded that a crowding-in relationship exists between capital expenditure and private investment, while indirect tax revenue has significant and non-distortionary relationship with private investment. The study therefore recommends more public investment in capital projects and that the tax system should generally be made favorable towards private sector investment.

Foreign Direct Investment, Domestic Investment and Green Growth in Nigeria: Any Spillovers?

Globally, investments in physical and human capital have been identified to foster real economic growth and development in any economy. Investments, which could be domestic or foreign, have been established in the literature as either complements or substitutes in varying scenarios. While domestic investments bring about endogenous growth processes, foreign investment, though may be exogenous to growth, has been identified to bring about productivity and ecological spillovers. In view of these competing–conflicting perspectives, this chapter examines the differential impacts of domestic and foreign investments on green growth in Nigeria during the period 1970-2017. The empirical evidence is based on Auto-regressive Distributed Lag (ARDL) and Granger causality estimates. Also, the study articulates the prospects for growth sustainability via domestic or foreign investments in Nigeria. The results show that domestic investment increases CO2 emissions in the short run while foreign investment decreases CO2 emissions in the long run. When the dataset is decomposed into three sub-samples in the light of cycles of investments within the trend analysis, findings of the third sub-sample (i.e. 2001-2017) reveal that both types of investments decrease CO2 emissions in the long run while only domestic investment has a negative effect on CO2 emissions in the short run. This study therefore concludes that as short-run distortions even out in the long-run, FDI and domestic investments has prospects for sustainable development in Nigeria through green growth.

Effect of Taxation on Domestic Investment in Nigeria

This study examined the effect of taxation on Domestic Investment in Nigeria; using time series data from 1995 to 2017. Data for the study was sourced from the Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics. The estimation technique adopted in the study was the Ordinary Least Square (OLS) Technique. The results of the estimates showed that: Taxation has long run relationship with Domestic investment in Nigeria; Personal income tax and Gross domestic product have non significant negative effects on Domestic investment in the long run, while company income tax has a significant positive effect on Domestic Investment. Value added tax has a non significant positive relationship with Domestic investment in the long run. In conclusion, the study finds a mixed result. Based on findings of the study, the following recommendation was made; Government should use money derived from taxation in providing adequate infrastructures like good roads, water and electricity. This will lower the cost of doing business in Nigeria.

An Empirical Examination of the Determinants of Private Investment in Nigeria.

The study investigates the determinants of private investment in Nigeria, employing the Autoregressive Distributed Lag framework on data from 1980 to 2016. In all, the study provides evidence that real gross domestic product, public investment, real interest rate, real exchange rate, credit to private sector and external debt both in a short run and long run significantly affect the level of private investment, except for inflation which was insignificant. Our study revealed that real gross domestic product play an increasingly important role in supporting the nation’s growth in private investment. The study recommends that government should give more priorities to expenditures that compliment (crowd in) private investment: such as capital expenditure. Also since previous exchange rate policies are most likely to spur and speedup the growth and development of the domestic industries and also it has the likelihood to increase investment in this sector. Therefore, necessary adjustments need to be effected for the proper positioning of present exchange rate policies to encourage the investors and investment in the domestic economy. Keywords: Private investment, Real Gross Domestic Product, Real Interest Rate, Real Exchange Rate, Credit to Private Sector DOI : 10.7176/JESD/10-2-11

External Debt Financing and Public Capital Investment in Nigeria: A Critical Evaluation

Abstract This study considers the consequences of external loan on capital investment in Nigeria. Data for the study have been collected from the World Bank and Central Bank of Nigeria Statistical Bulletin, 2018 edition. The variables on which data are sourced include government capital expenditure, external debt accumulation, debt servicing cost, inflation rate, and exchange rate. Government capital expenditure is the dependent variable, while external debt accumulation and debt servicing cost are the key independent variables. Inflation and exchange rates are used as the moderating variables. The scope of the study covers the period from 1996 to 2018 and the data are analysed using the ordinary least squares multiple regression method. The regression results indicate that external debt has a significant negative impact on capital investment while debt servicing cost has a strong and significant positive effect on capital investment. Under this circumstance, the controlling variables are not significant in influencing capital investment. Hence, the study suggests more focus on profitable capital investments if external borrowing must be embarked upon. The need for the development of untapped natural resources, establishment of industries and revival of abandoned industries to boost debt repayment has been emphasized. The study also strongly recommends that the existing governments (state and federal) should endeavour to complete capital projects of past administrations in order to drive the economy and to avoid wastage of financial resources including the borrowed funds.

Impact of Infrastructure on Foreign Direct Investment in Nigeria: An Autoregressive Distributed Lag (ARDL) Approach

This study examines the roles infrastructure play in attracting foreign direct investment (FDI) into Nigeria for the period between 1981 and 2014. It also investigates the type of infrastructure that has more impact on FDI attraction. The unit root test results show that none of the variables in the study is integrated of order two, that is, I(2), a condition which justifies the use of Autoregressive Distribution Lag (ARDL) framework. The ARDL Bounds Test approach to cointegration was employed to determine the long-run relationship among the variables in our model and the result shows that there is a long-run relationship between infrastructure and FDI in Nigeria. The result of the estimation of the selected ARDL Error Correction Model shows that none of the infrastructure variables (tractor, telephone lines and electricity) employed in this study is significant to attract FDI into Nigeria in the short-run although electricity production (power supply) was found to influence FDI in the long-run. The study thus recommends that the power sector be revitalized and should be given priority as it will attract FDI, increase national output and move Nigeria closer to actualizing her dream of becoming one of the twenty leading economies in the world by the year 2020.

IFRS adoption and cross border investment in Nigeria

International Financial Reporting Standards (IFRS) has provided many benefits to developed countries globally. It is claimed to increase transparency, reduce information asymmetry and enhance cross border investment. This paper investigated the impact of IFRS adoption on cross border investment comprising of foreign portfolio investment and foreign direct investment in Nigeria from 2007-2016. The research employed a mixed research design comprising cross sectional survey and ex-post facto design using content analysis and inferential statistical tools. The study found that there is a positive perception from users and preparers of financial statements on the benefits derived from IFRS adoption in Nigeria. In addition, IFRS adoption impacts cross border investment in Nigeria. However, the pre adoption period had higher incidence of growth in FDIs and FPIs than the post adoption period. Consequently, IFRS adoption alone does not single handedly impact cross border investment but several other variables not considered in this study influence cross border investment in Nigeria. This paper recommends that the government of Nigeria should consider the improvement of institutional factors such as the legal, socio-political and macroeconomic milieu so as to enhance cross border investment in Nigeria.

Effects of Public Expenditure On Economic Development In Nigeria.

This study examined the effect of public expenditure on economic development in Nigeria for the period 2000–2015. Ordinary Least Square (OLS) multiple regression model was employed on the perceived causal relationship between public expenditure and economic development. The study revealed that capital expenditure on Economic Services and recurrent expenditure on administration exerted positive and insignificant effect on unemployment rate in Nigeria while public expenditure on social and community service exerted negative and insignificant effect on unemployment rate in Nigeria. Also the study revealed that capital expenditure on Economic Services and Social and Community Services exerted positive and significant effect on private investment in Nigeria while recurrent expenditure on administration exerted negative and significant effect on private investment in Nigeria. In all, the study revealed a significant impact of public expenditure on GDP, unemployment rate and private investment in Nigeria for the period 2000-2015. It is recommended amongst others that capital and recurrent expenditures on economic services should be directed mainly to the agricultural sector. This will stimulate activities in the economic sectors and, perhaps, reverse the negative effect on economic development.

Interest Rate Liberalization and Investment in Nigeria

Interest Rate Liberalization and Investment in Nigeria

The Impact of Exchange Rate on Foreign Private Investment in Nigeria

The study examined the impact of exchange rate on foreign private investment using quarterly time series date from Nigeria for the period 2007 to 2017. Foreign private investment in the study was disaggregated into foreign direct investment and foreign portfolio investment in order to ascertain their separate reactions to changes in the exchange rate of the naira against the US dollars. The empirical analysis was based on the VAR estimation procedure using three lagged periods adopted on the basis of various lag order selection criteria. The empirical result revealed that devaluation/depreciation of the naira adversely affects foreign direct investment and foreign portfolio investment in Nigeria. Increased in the size of the domestic market and development of the financial sector were found to stimulate foreign private investment while high inflation rate in the domestic economy discourages foreign private investment in Nigeria. The study, therefore, recommended among others that the Central Bank of Nigeria should continue to initiate more proactive policy intervention policies to stabilize the exchange rate of the naira in order to stimulate more foreign private investment in Nigeria.

Determinants of Health Investment in Nigeria: A Case of Infant Mortality (2000-2014)

Determinants of Health Investment in Nigeria: A Case of Infant Mortality (2000-2014)

Effects of Government Expenditure on Private Investment in Nigerian Economy (1980–2016)

This study examined the effect of government expenditure on private investment in Nigeria during the period 1980–2016. The error correction model analysis was used in the study to analyze the relationship between the two variables. The study found that there is a long-run relationship among the variables and that the interest rate and inflation have negative but significant impact on private investment in the long run. On the other hand, government expenditure has positive but insignificant impact on private investment in the long run. In the short run, government expenditure and interest rate have a significant positive impact on private investment in Nigeria, while GDP per capita and inflation negatively impact private investment. The study concluded that there is the need for the government to increase its expenditure particularly on the provision of more infrastructural facilities as this will attract more investment from within and outside the country.

Capital Market Development and Foreign Portfolio Investment Inflow in Nigeria (1985-2016)

Investment as a catalyst for economic growth and development is an important prerequisite for an economy to attain and sustain industrialization. However, most developing countries lack the sufficient domestic capital to achieve the required level of investment necessary for growth. Thus, foreign capital is necessary to facilitate the investment-growth process. To attract adequate foreign capital needed for investment, capital market has been identified as one of the veritable means through which foreign investment flows into an economy. Consequently, this study examined the effect of capital market development on foreign portfolio investment in Nigeria over the period 1985 to 2016. The study employed secondary data sourced from Central Bank of Nigeria Statistical Bulletin and publications of Nigeria Stock Exchange. In order to achieve the objective of the study, the researcher adopted Vector Error Correction Mechanism (VECM) to analyze the short run and long run dynamism of the variables while also focusing on the direction of causality between capital market development and foreign portfolio investment in Nigeria, using granger causality test. The Granger causality test revealed that there is no causality between capital market development and foreign portfolio investment in Nigeria. Result from the vector error correction model indicated that Market Capitalization (MCAP) has negative significant effect on foreign portfolio investment in Nigeria while All Share Index (ASI) has positive relationship with foreign portfolio investment. Therefore, the study concluded that capital market development has significant effect on foreign portfolio investment in Nigeria within the period examined. Based on the findings, the study recommended that government and capital market regulatory authorities should develop and enforce policies that will further propel capital market development in such a way that it will sustain its positive effect in attracting foreign portfolio into the Nigerian economy as well as stimulate improved interest of foreign investors in subscribing to portfolio investment in Nigerian enterprises.