Sector Development In Nigeria Research Articles

Revisiting the nexus between remittances and financial sector development in Nigeria

Purpose ― The study aims to investigate the impact of remittances on financial sector development in Nigeria using data from 1990 to 2021.Method ― The study examines the variables' relationship using the Autoregressive Distributed Lag (ARDL) and Toda Yamamoto (TY) Causality.Findings ― The study finds that remittances have a positive and significant long-run impact on financial sector development. Total reserves and imports of goods and services have a negative and significant long-run impact. In the short run, remittances and deposit interest rates positively and significantly impact financial sector development, while total reserves and total population have negative and significant impacts. The Toda-Yamamoto causality result indicates a two-way causal relationship between financial sector development and remittances.Implication ― The study recommends that the government employs policies encouraging channeling remittances through a formal banking system, as well as ensuring that such remittances received are channeled to finance productive investment, hence financial development.Originality ― The novelty of this research relates to the use of the three main indicators of remittances in an economy, which are the import of goods and services, total reserves, and deposit interest rates, to examine its impact on financial sector development in Nigeria

International Monetary Fund Stabilization Programme and External Sector Development in Nigeria

The impact off the International Monetary Fund (IMF) stabilization programme has been a subject of great controversies. This study therefore investigated the impact of policy recommendations contained in the IMF stabilization Programme on the development of Nigeria’s external sector. In specific terms, the study examined the impact of fiscal deficit, exchange rate, foreign direct investment (FDI), degree of trade openness, interest rate and bank credit to the domestic economy on two indicators of external sector development namely; balance of payments (BOPs) and external reserves. A variety of analystical techniques including Phillips-Perron unit root test, autoregressive distributed lag (ARDL) model, error correction model (ECM) and Granger causality test was applied on annual time-series data from 1986 to 2021. The findings indicated that fiscal deficit has significant negative impact on balance of payments while exchange rate and interest rate have insignificant negative impact on BOPs. Also, degree of trade openness has significant positive impact on BOPs while FDI and bank credit to the domestic economy have insignificant positive impact on BOPs performance. Similarly, fiscal deficit, exchange rate and interest rate have insignificant negative impact on external reserves while foreign direct investment, degree of trade openness and bank credit to the domestic economy have insignificant positive impact on external reserves. In line with the IMF recommendations, the study recommended that the Nigerian government should reduce the size of its fiscal deficit; encourage the inflow of FDI and open up the economy to international trade. However, against the IMF recommendations, the study recommended that a managed free floating exchange rate policy should be adopted while the interest rate should be lowered. It is also recommended that bank credit to the private sector should be expanded.

Agricultural financing and economic performance in the Obudu local government area of cross River State, Nigeria

One of the challenges facing agricultural sector development in Nigeria is inadequate financing by the government and financial institutions. This poor agricultural funding has an impact on economic activities. Thus, this study investigated the connection between agricultural funding and economic performance in Cross Rivers State's Obudu Local Government Area (LGA). The survey study methodology was employed, and a questionnaire was used as its primary data source, combined with a stratified sample technique. The targeted population was restricted to farmers and agriculturalists in the study area. Descriptive statistics, such as frequency and percentages tables, were calculated, and the data gathered from the questionnaire were compiled, computed, and analysed. The results of hypothesis testing showed a relationship between agricultural finance and economic performance, as well as a connection between agricultural credit schemes and agricultural sector expansion, using analysis of variance (ANOVA) as the statistical technique. They also showed that credit programmes for agricultural finance encourage the expansion of the agricultural sector, which improves economic performance, as manifested in economic growth and development. The study recommends, firstly, that the government release grants to farmers at regular intervals to support their activities. Secondly, it is necessary to raise the level and size of agricultural loans through the reduction of interest rates to allow for more economic development in the country. The government should implement an effective and efficient supervisory framework to monitor interest rate regulation within the agricultural loan policy.

Insecurity and private sector development in Nigeria: an exploratory study

Insecurity and private sector development in Nigeria: an exploratory study

Economic Planning and Real Sector Development in Nigeria

One of the principal objectives of planning in underdeveloped or less developed countries is to increase the rate of economic development. This can be achieving through importing capital from abroad and localized force saving to support the level of industrialization in the real sectors of the economy. The central focus of this research is to examine economic planning and real sector in Nigeria by looking at the causes, consequences, and the way forward. The paper used library science method and collected data purely from secondary materials. The paper found that amongst the challenges of the real sectors development is poor government policies and monoculture nature of the Nigerian economy. These consequently resulted into not achieving macroeconomic objectives such as increase in output growth in all the sectors as expected. The study therefore suggested articulated development plan, improved governance, and service delivery. Governments should create an enabling environment through her planning for private driven economy to thrive through realistic power and energy programmes and reforms, functional institutions. This will encourage local industries and foreign direct investments into the real sector of the economy thereby increasing the levels of economic development in the economy.

Determinants of Insurance Sector Development in Nigeria

Determinants of Insurance Sector Development in Nigeria

Economic Planning and Real Sector Development in Nigeria

Economic Planning and Real Sector Development in Nigeria

Evaluating the Gas Flaring Commercialisation Policy in Nigeria: An Agenda for Mitigating Gas Flaring

Nigeria is an oil and gas producing country but sadly its gas sector had suffered serious setback in terms of development and utilisation.  Although, the crude oil sector is nearing maturity, the gas sector is still in its infancy due to some past regulatory mistakes. As a result of low gas utilization and past development policies, gas flaring became the bane of the petroleum industry in Nigeria for over five decades and this is with no end in sight. Amidst, the abundant natural gas reserves, the country was considered one of the worst gas flaring nations after Russia. Past policies and legal regimes to reduce gas flaring were rather episodic and unrealistic due to several reasons notably: policy instability, lack of cooperation by the International Oil Corporations (IOCs) and the lack of political will by the Federal Government. Gas flaring in Nigeria contributes to both economic waste as well as a huge environmental challenge in the oil and gas producing communities. It was against this background that the Federal Government recently announced measures for the utilisation of flared gas from the Niger Delta region. The objective is to make hitherto gas flared to be commercially utilised thereby reducing their environmental footprint.  The significance of this paper is to examine the efficacy of these inchoate   government policies and their fit for purpose. The paper found that any such measure must be backed up with enforcement mechanism with attractive terms for new entrants into the gas sector development in Nigeria. Keywords: Gas Sector, Gas Development, Utilisation, Flaring, and Nigeria. DOI: 10.7176/JLPG/96-15 Publication date: April 30 th 2020

EFFECT OF FINANCIAL DEVELOPMENT ON FINANCIAL INNOVATION IN NIGERIA

Financial sector is crucial for the development of a well-functioning market as it facilitate capitalinflows, mobilize savings for productive investment and facilitates the conduct and growth of aneconomy in the world. Despite the importance of financial sector development in Nigeria, financialinstitution operating in financial market were confronted with drastic changes where by old waysof doing business were no longer profitable and sustainable and unable to acquire fund with theirtraditional financial instruments. Against this background, the study investigated the effect offinancial sector development on financial innovation in Nigeria. The study employed secondarydata obtained from central bank of Nigeria statistical bulletin and World Bank database between2011 and 2017. The data obtained was subjected to system General Method of Analysis (GMM)estimator. The study concluded that upward trend of process innovation significantly influence thein depth of finance. The study recommends policy makers should design policies which willpromote and enhance the relationship between financial innovation and financial development inother to increase the supply and provision of financial service.

Financial Sector Development in Nigeria: Do Financial Reform, Output Size and Resource Dependence Matter?

The study examined the determinants of financial sector development in Nigeria in an error correction modelling framework, and with OLS for robustness checks, using data from 1980 to 2017. The results show that, banking sector reform, gross capital formation, government expenditure, interest rate spread, output size and trade openness were significant determinants of financial sector development in both the short- and long run. Proxy for economic misery was only significant in the ECM equation, while literacy and human development metric was significant in the long-run equation. Natural resource dependence, proxy by ratio of natural resource rent to GDP, was negatively related to financial sector development in Nigeria, though the coefficient was not significant at conventional levels.  Economic misery, interest rate spread and inflation were observed to undermine financial development in Nigeria. The study recommends the continuation of the process of financial liberalization because of its immerse benefits of promoting competition amongst financial institutions with attendant positive effects of reducing interest rate gap. Domestic output, measured by the real GDP, should be enhanced with appropriate stabilising policy, whether fiscal or monetary policy. Additionally, efforts should be enhanced to limit the effects of macroeconomic instability on financial sector development. Lastly, the study recommends efficient management of natural resources to enjoy a non-declining contribution to the development of an inclusive financial system in Nigeria.

Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria

In view of the indispensable role of financial sector in both emerging and developing economies, there has been a notable spotlight on the financial sector development over the years in most African countries. Nonetheless, there are only a few studies on this topical issue, particularly for Nigeria. Hence, this study examines the long – run and short – run dynamic relationship between institutional quality and financial development in Nigeria over the period of 1984 – 2015 using Auto-Regressive Distributed Lag (ARDL) bounds test approach to cointegration. Using two different indicators (Private credit and M2) of financial development, the results consistently show that institutional factors do not have significant effect on financial development in the long – run as well as in the short – run. Furthermore, the empirical evidence indicates that regulatory quality and governance system (institutions) do not necessarily contribute to financial development in a feeble institutional environment, specifically in Nigeria. Thus, our findings suggest that whilst weak institutions could increase the risk of limiting the functioning of financial system, good governance and strong institutions are the essential ingredient of financial development in Nigeria. As a consequence, policies aimed at strengthening the quality of institutions and governance should form the major policy thrust of government (policy makers). These could help improving financial sector development in Nigeria.

Influence of road transport infrastructure on agricultural sector development in Nigeria

Abstract The study investigated the effects of road transport infrastructure on agricultural sector development in Nigeria from 1985 to 2014, using secondary annual time series data on agricultural development (proxy by gross domestic product in the Agric sector) road transport infrastructure (proxy by length of paved road per square kilometer of area) export and capital, all obtained from the Central Bank of Nigeria (CBN) [3], and National Bureau of Statistics (NBS) [16], statistical bulletins. The data were analyzed using Granger Causality test and Ordinary Least Square estimation techniques. The study concluded that a positive and statistically significant relationship exists between road transport infrastructures (LRT) also evidence was found of a unidirectional causality from agricultural sector development to transport infrastructure. The study, therefore, recommends that adequate and timely maintenance of existing roads should be carried out as well as enacting appropriate regulations that ensure proper implementation and completion of new road construction contracts in the country in order to boost agricultural sector development, reduce wastage of farm produce and increase the possibility of economic diversification.

Banking Sector Operations and Foreign Direct Investment in Nigeria: A Causality Analysis

This study examined the causality relationship between banking sector operations in Nigeria and foreign direct investment from 1997 to 2015. The causal relationship between Foreign Direct Investment (FDI) and banking sector development in Nigeria is not clear yet, while there abounds empirical and theoretical studies on the nexus between foreign direct investment and economy in general, considerable attempts has not been made on the causality relationship between and banking operations in Nigeria. Specifically, this study ascertained the causal relationship between banking sector deposits, loans and advances, foreign exchange transactions, domiciliary operations, international banking operations and foreign direct investment. To achieve these objectives, this study employed Ordinary Least Square (OLS) econometric technique, Auto Regressive Distributive Lag (ARDL) bound test and granger causality test among others. Secondary data were collected from Central Bank of Nigeria statistical bulletin of 2015. The result indicated significant causal bidirectional relationship between banking sector deposits, foreign exchange transactions and foreign direct investments; a significant unidirectional causal relationship between domiciliary operations and foreign direct investment, while no significant causal relationship existed between loans and advances, international banking operations and foreign direct investment. The study recommends that banking sector should adopt completely smart banking as this evidences low risk, reliability and stability of the banking sector which is essential for inflow of foreign direct investments. Central Bank of Nigeria should cautiously focus on tackling monetary policy variables such monetary policy rate, cash reserve ratio and loan portfolio which a capable of attracting investors from abroad.

HOUSEHOLD INWARD REMITTANCES AND BANKING SECTOR DEVELOPMENT: THE NIGERIAN EXPERIENCE (1977 – 2014)

There has been a massive inflow of diaspora remittances into the Nigerian economy in recent times. However, there are concerns over whether or not inward remittances have any significant effect on the banking sector development in Nigeria. This study sought to: (i) examine the trend of household inward remittances and banking sector development in Nigeria; (ii) analyse the effect of inward remittances on banking sector development in Nigeria. Annual time series data were sourced from World Development Indicators (WDI) (2015) edition of the world bank for the period  1977 – 2014. We employed both descriptive statistics in the form of graph and Generalised Method Moment instrumental variables (GMM-IV) estimator to examine the inward remittances - banking sector development nexus Nigeria. Results show that inward remittances have positive but statistically insignificant effect on banking sector development in Nigeria (β =0.0727;  t =0.5165). It is therefore recommended amongst others , that Nigerian banks develop remittance-linked financial products for Nigerians in Diaspora and remittance recipient households instead of treating remittance as a one-off transaction without value addition.

Innovation policies and sector development in Nigeria's oil palm industry: lessons from Malaysia

Increasingly developing countries are beginning to employ a set of instruments to promote industrialisation that are collectively termed innovation policy. This paper presents the qualitative outcomes of the differential uses of innovation policies to foster firms' innovation and production performance in the oil palm industry in Nigeria and Malaysia. The primary and secondary data used were gathered over a period of two years. The outcomes are different because the efforts and commitments to the policies were different over time. We show that the challenges of industrialisation constitute an evolutionary challenge that requires continuous and explicit effort. Employing a wide variety of factors; Malaysia demonstrate that countries can exploit low-tech traditional agricultural technologies such as oil palm for wealth creation by using a combination of policy instruments and incentives mechanisms to drive the sector whilst the lack of targeted policies might have contributed to the sub-optimal performance of the sector in Nigeria.

Do Financial and Trade Openness Lead to Financial Sector Development in Nigeria?

Abstract With so many countries of the world now open to global capital and trade, this study identifies whether financial and trade openness contribute to the development of Nigeria’s financial system by considering both financial depth and access to finance indicators. To achieve this objective, we applied the Simultaneous Openness Hypothesis as our theoretical framework and the Generalized Method of Moments (GMM) as our estimation method. Our findings reveal that opening trade while neglecting capital (vice versa) may be detrimental to the development of Nigeria financial system. In view of this evidence, we recommend that the simultaneous opening of trade and finance is a more guaranteed way of ensuring improved financial development in Nigeria.

Environmental Related Legal Framework for Oil, Gas and Mining Sector Development in Nigeria

Nigeria, the most populous nation in black Africa, rich in oil and gas reserves but Underdeveloped has her own share of environmental problems which justify local and international attention. In terms of Nigeria’s environmental problems, the four broad issues being accorded highest priority are the following.Sustainable industrial production: - With the exception of the petroleum industry, most industries do not have waste treatment systems. The few treatment plants that do exist either are not functioning as a result of over use or lack of proper servicing or are unable to cope with the vast amounts and types of industrial effluents passing through them. The real challenges of industrial pollution can be identified thus:- (a) air pollution (gas or particle emissions), especially from the cement, steel and asbestos industries; (b) land and water pollution - effluent discharged onto land and into water has become a great concern, particularly in view of the epidemic tendencies of such pollution. The pharmaceutical, chemical, textile, food processing and oil industries are the major polluters; and (c) noise pollution.Preventing and reversing desertification: - Nigeria has lost about 351000 square kilometres of its land to the desert, and the desert is advancing at a yearly rate of 0.6 kilometres. Desertification is the most important problem for northern Nigeria. Entire settlements, and in some cases major access roads, were buried by sand dunes in some parts of the north quite recently.It is against this background that this paper seeks to realize the following objectives: - 1. To examine the nature and scope of the legal regime in the oil, gas and mining sector; 2. To analyse the liability regime in oil pollution, gas flaring and the environmental regulatory framework for the mining sector development;3. To conclude with some recommendations.

Impact of Foreign Direct Investment on Agricultural Sector Development in Nigeria ( 1981 - 2012 )

Premised on economic and political instability indicators, this paper examined the impact of FDI on the agricultural sector development of the Nigerian economy. This work employs secondary time series data which spanned 1981 to 2012, Following ADF test for stationarity and a granger causality test, the study found a relationship among the variables as affirmed by the error parameter. The study reveals that FDI positively impacted on agriculture not only in the short run but also in the long run. This will also engender domestic income diversification which will boost agricultural sector. Further, political instability adversely affected agricultural investments in the long run. An enabling environment should be provided to attract investment on short and long term basis.

The Impact of Gasoline Subsidy Removal on the Transportation Sector in Nigeria

Nigeria, like other oil exporting countries in the world has embarked on the policy of gradual removal of fuel subsidies since 1970s. However, this issue has become highly contentious in recent time due to the incessant nature and the effects on the economy. To this end the paper examine the impact of subsidy removal on transport sector development in Nigeria using the co-integration and error-correction models. The result showed that subsidy had a positive and significant relationship with transport sector which implies that removing gasoline subsidies can increase the operational cost of transportation sector and reduce the gross domestic product (GDP) of the country.

Inflation and Financial Sector Performance: The Case of Nigeria

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.