Stability In Nigeria Research Articles

The Role of Central Bank of Nigeria in Exchange Rate Stabilization

The study X-rays the role of Central Bank of Nigeria (CBN) in exchange rate stability in Nigeria, using quarterly time series data. The study adopts GARCH family models to decipher the potency of CBN’s monetary policy in exchange rate stability in Nigeria. Anchor interest rate, official exchange rate, and money supply were incorporated into the variance equation to determine their exact impact on the volatility variable (conditional variance). Empirical results show that Anchor interest rate, official exchange rate, and money supply are key in exchange rate stability in Nigeria. The study also finds that despite CBN’s official intervention, exchange rate instability in Nigeria persists overtime. It concludes that Central Bank of Nigeria has a major role to play in managing exchange rate volatility in Nigeria especially when it uses the aforementioned monetary policy tools.

Impact of Gas Monetisation on Price Stability in Nigeria

Impact of Gas Monetisation on Price Stability in Nigeria

Nexus between Financial Innovation and Financial Stability in Nigeria

Nexus between Financial Innovation and Financial Stability in Nigeria

Energy price reforms, exchange rate devaluation and macroeconomic instability: Evidence from Bayesian VAR identified with sign‐and‐zero restrictions

AbstractThis study sets out to examine the effects of the interaction of subsidy removal on premium motor spirit (PMS) and exchange rate devaluation on macroeconomic instability in Nigeria. In this regard, this study adopted the Bayesian vector autoregressive model (BVAR) identified with sign‐and‐zero restrictions for annual data between 1985 and 2022. The empirical results reveal that both the removal of subsidies on PMS and the devaluation of the naira exchange rate significantly undermine real gross domestic product (GDP) growth and raise inflationary pressures in Nigeria. One important implication of this finding is that the ongoing subsidy reforms in the energy sector and associated devaluation of the naira exchange rate raise the risk of stagflation in Nigeria. Secondly, the simulation shows that simultaneous subsidy removal on PMS and exchange rate devaluation can trigger macroeconomic instability. This finding implies that stabilising PMS price and the exchange rate is key to achieving macroeconomic stability in Nigeria. Thus, this study recommends that Nigeria should be cautious and act quickly to cushion the price of PMS from the vagaries of foreign exchange market fluctuations to improve macroeconomic stability in the country.

Interest rates, money supply, institutional quality, and exchange rate stability in Nigeria

Interest rates, money supply, institutional quality, and exchange rate stability in Nigeria

Financial Inclusion, Economic Growth and Macroeconomic Stability in Nigeria

This study investigated the impact of financial inclusion on economic growth and macroeconomic stability in Nigeria (1980 – 2022). Using secondary data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin (various years) and World Development Indicators (WDI, 2023), the study employed the Autoregressive Distributed Lag (ARDL) technique in analysing the data. It was found that financial inclusion may not necessarily improve economic growth in the short run; it may not provide macroeconomic stability in the short run; financial inclusion enhances the growth of the economy in the long run, but the growth rate is slow; and financial inclusion can stabilise the macroeconomy (price level) in the long run. It was recommended, amongst other things, that a robust, stable and sustainable financial system be developed to deepen financial inclusion (like expanding credit and money supply, amongst other things) to encourage economic growth and stabilise the economy.

Effect of Inward Capital Flows on Financial Stability in Nigeria

Effect of Inward Capital Flows on Financial Stability in Nigeria

Empirical Analysis of the Macroeconomic Drivers of Banking Industry Stability in Nigeria

The main purpose of this study is to determine the macroeconomic drivers of banking industry stability in Nigeria. The study employed Quantitative Research method using ex-post research design to analyse the impact of exchange rate, interest rate, inflation rate, economic growth rate, and unemployment rate on bank credit-asset ratio from 1991 to 2023. Based on preliminary estimations from the Phillips-Perron unit root and F-Bounds tests, the study employed the Autoregressive Distributed Lag (ARDL) technique to establish the following key findings. Macroeconomic variables collectively and significantly influence banking industry stability. Specifically, high economic growth rate, moderate inflation rate, and low unemployment rate are the core drivers of banking industry stability, while high interest rate and volatile exchange rate exert a significant negative influence on banking industry stability. Consequently, bankers and macroeconomic policymakers should collaborate to ensure that macroeconomic policy frameworks provide banks with the opportunities for capital mobilisation necessary to effectively perform their financial intermediation roles for the overall benefit of the economy. The study recommends balancing macroeconomic targets and bank stability through growth-inflation-employment targeting policies to improve households' loan repayment resilience and reduce the credit risk of Nigerian banks. Additionally, exchange rate stabilisation through government intervention is suggested to help banks hedge against asset and credit value loss due to exchange rate volatility.

The asymmetric effect of fiscal deficits on macroeconomic stability in Nigeria: evidence from nonlinear autoregressive distributed lag (NARDL)

PurposeThe paper examines the asymmetric effects of fiscal deficits on selected macroeconomic variables in Nigeria, which include economic growth, exchange rates and inflation. The existing works of literature are premised on symmetry assumptions with dichotomous findings. In such situations, they suggest using a nonlinear approach as an alternative to checkmate the findings premised on linearity. This is critical, considering the perpetual fiscal deficit trends of Nigeria, which are considered a major economic problem in the country.Design/methodology/approachThe study employs nonlinear autoregressive distributed lag (NARDL) estimator using secondary data collected from the statistical bulletin of the Central Bank of Nigeria (CBN).FindingsThe results show that in the short run, both positive and negative shocks to the fiscal deficit have no effect on Nigeria's economic growth. The same is found on the negative shocks in the long run. However, positive shocks to the fiscal deficit have a long-run positive impact on economic growth. It is further revealed that, in the short run, positive shocks as well as negative shocks to fiscal deficits are positively related to the inflation rate. More so, long-run estimates show that positive shocks to the fiscal deficit have negative impacts on inflation, while negative shocks to the fiscal deficit have positive impacts on inflation.Originality/valueThis study introduces novelties to the understanding of the relationship between fiscal deficits and macroeconomic stability in Nigeria. It accounts for asymmetric and nonlinear features that are more aligned with the socioeconomic realities of real-world phenomena. This study also offers more insightful policy perspectives to enhance the fiscal profile of the country.

Effect of Corporate Governance on Banking System Stability in Nigeria

The study focused on the effect of corporate governance (CG) on banking system stability in Nigeria. The purpose of this study was to assess the effect of corporate governance on banking system stability. Data used for this study were secondary data collected from the audited annual report of 13 listed deposit money banks in Nigerian for the period of eight (8) years, the data was analyzed using STATA 14 and hypotheses were tested using random effect regression with respect to the Breusch and Pagan Lagrangian multiplier test and Hausman specification test. From the random effect regression analysis table, the results show that board size, ratio of male- female, board committee, the number of board meeting have contributed insignificantly to our model while the overall hypothesis also show an insignificant effect on CG and banks’ stability. The study recommends that since the variables used in this study have no significant effect on the banking system stability, emphasis should be shifted from these variables to other corporate governance variables. The study also suggested that More research on the study variable should be undertaken in Nigeria, this would throw more weight on the importance of corporate governance in ensuring banking system stability on a larger scale by incorporating all the deposit money banks in Nigeria.

Institutional Quality, Monetary Policy and Banking System Stability in Nigeria

The study used a Generalized Method of Moments to examine the effect of six IQ indices (voice and accountability, rule of law, regulatory quality, government effectiveness, corruption control and political stability and absence of violence) and MP tools (monetary policy rate, loan-deposit ratio, lending rate, logarithm of broad money supply and banking system liquidity ratio) on the Z-Score, a proxy for banking system stability. The study found that, among the six MP indices, only corruption control index has a positive and significant effect on bank stability (coefficient = 0.245124, p = 0.0042). Also, out of five MP variables, only the loan-deposit ratio has a significantly positive effect on bank stability (coefficient = 0.0070482, p = 0.0072). The effect of the other IQ and MP indicators are not significant enough for inference purposes. We conclude that IQ affects banking system stability positively and significantly. We also found that MP affects the stability of the banking system positively and significantly. We recommend, among others, that authorities should continue to pursue zero corruption in institutions and that banks should be mandated to improve on the existing anti-corruption measures. Also the Central Bank of Nigeria should continue to maintain the range of loan-deposit ratio that has existed for many years. There is the need to re-appraise other IQ and MP variables with no significant positive effect on banking system stability in Nigeria.

Challenges of University Education in the Promotion of Capacity Building and Social Stability in Nigeria

Challenges of University Education in the Promotion of Capacity Building and Social Stability in Nigeria

Impact of Monetary Policy on Exchange Rate Stability in Nigeria

This study investigates the impact of interest rates, money supply, and Central Bank reserves on exchange rate stability in Nigeria. Utilizing quarterly economic data from 1980 to 2023, sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin, the research employs a longitudinal survey design to assess the relationships between these monetary variables and exchange rate volatility. The findings indicate that interest rates, money supply, and Central Bank reserves significantly influence exchange rate fluctuations, with Central Bank reserves having the most substantial impact. Specifically, interest rates exhibit a moderate effect on exchange rate volatility (t = 3.513, p = .001, Beta = .342), while money supply also significantly affects exchange rate volatility (t = 2.713, p = .010, Beta = .305). Central Bank reserves, however, have the most pronounced impact (t = 4.141, p = .000, Beta = .467). These results highlight the critical role of monetary policy in maintaining exchange rate stability. The significant positive relationship between interest rates and exchange rate volatility suggests that monetary authorities should carefully consider the ramifications of interest rate adjustments. Similarly, the influence of money supply underscores the need for meticulous management to prevent destabilization. Robust Central Bank reserves emerge as a crucial buffer against exchange rate fluctuations, emphasizing the importance of effective reserve management policies. The findings provide actionable insights for policymakers aiming to enhance exchange rate stability through strategic interest rate policies, careful money supply management, and maintaining adequate Central Bank reserves.

Determinants of Bank Stability in Nigeria

The paper examines the determinants of bank stability in Nigeria over the 2000 to 2021 period. The analysis was conducted using the ZSCORE as the measure of bank stability in Nigeria alongside the regulatory capital ratio, cost-to-income, non-performing loans, loan-to-deposit, bank concentration, and the share of domestic private credit to GDP as the determinants of bank stability. The model was estimated using the time-series ordinary least square regression method. The results show that the regulatory capital ratio, cost-to-income, non-performing loans, loan-to-deposit, bank concentration, and the share of domestic private credit to GDP are all significant determinants of bank stability in Nigeria. More specifically, regulatory capital ratio, cost-to-income ratio, non-performing loans, and domestic private credit are negative measure of bank stability, while loan-to-deposit ratio and bank concentration are positive determinants of bank stability in Nigeria.

AN EVALUATION OF THE SECURITY CHALLENGES CONFRONTING NIGERIA

This paper evaluated the security challenges confronting Nigeria. Specifically, the objectives of the study were: to evaluate the security challenges confronting Nigeria; to examine the dimensions of internal security; to identify the security challenges confronting Nigeria. The study used secondary data. It also adopted the frustration-aggression theory to provide a direction for the paper. The study found that Nigeria is faced with the burden of security challenges which resulted loss of live and property. The evil activities of Boko Haram terrorists, farmers-herders crashes armed banditry, kidnapping, and Indigenous People of Biafra (IPOB) are among the security challenges threatening the peace and stability of Nigeria. The Federal Government aims to curtail these activities, using various efforts but the security challenges persist, such as killing of innocent people, damage critical national infrastructure and displacement of hundred s of thousands of people across the country. The paper recommends that the government should address poverty and other causes of social exclusion which push young ones into crime and criminality in Nigeria; adopt both kinetic and non-kinetic strategies in the fight against insurgency and other criminal activities as well as ensure robust interagency cooperation among the security agencies involved in fighting insecurity in the country, especially in the area of information sharing and dissemination.

Muslims and Christians in Nigeria: A Proposed Solution to Interreligious Violence

This article discusses religious violence in Nigeria, particularly the conflict between Islam and Christianity that has been ongoing for about a century. Various factors contribute to this violence, including socio-economic, political, and governance deficits, as well as disputes over religious beliefs or identities. Additionally, the ethnic, religious, linguistic, and cultural diversity in Nigerian society plays a role in escalating the violence. This situation poses a threat to Nigeria's stability and territorial integrity, and the high number of casualties also impacts the country's economy. Numerous primary causes of religious violence in Nigeria include the agitation for the implementation of Sharia law, imbalances in the political and economic systems, extreme interpretations of religion, and external influences. To resolve this conflict, the author suggests several measures that can be implemented by religious leaders. First, they should strive to integrate religious institutions and faith-based organizations. Second, they must avoid conflicts among religious figures and institutions. Third, they should facilitate formal dialogue. Fourth, promote interfaith discussions. Fifth, establish local groups aimed at understanding each other among followers of different religions. And finally, organize conferences, seminars, and open discussions. Conferences and seminars can be held at national and international levels, while open discussions can be broadcasted on national television to reach various layers of Nigerian society, especially vulnerable individuals who could be used or targeted in interfaith conflicts.

Effect of Fiscal Policy on Price Stability in Nigeria

Effect of Fiscal Policy on Price Stability in Nigeria

Yield Performance and Stability of Some Indian Castor Hybrids in Nigerian Ecology

Castor (Ricinus communis L.) is an industrial oil crop that is widely recognized as an ideal crop for tropical and subtropical regions. Nigeria has been identified as a country with high potential to meet her national castor oil need and provide surplus for export. This potential can be harnessed, only if adequate production technologies, such as improved varieties, are available to the farmers. In this research, three FTB castor hybrids (Code 11, Code 22 & Code 33) and two local checks (NCRICAS1 & NCRICAS1) were assessed for their yield performance and stability in Nigeria. The castor genotypes were evaluated in a replicated plots across six locations in the Southern and Northern Guinea savanna ecologies of Nigeria. The results revealed significant differences for traits assessed among the genotypes. Average seed yield among the hybrids ranged between 596.58kg/ha and 1372.49kg/ha. Average seed yields of the checks ranged between 849.58kg/ha and 1239.63kg/ha. The hybrid Code 33 out yielded the two local checks at four locations (i.e Badeggi, Benue, Kebbi & Sokoto) out of the six locations. The check 1 (Acc.036) recorded significant higher yield (1705.28kg/ha & 1648.15kg/ha) than the hybrid Code 33 (1573.91kg/ha & 867.58kg/ha) at Bacita and Bauchi locations. Besides recording comparable seed yield to the best hybrid (Code 33), the local check 1 (Acc.036) matured earlier than the hybrids evaluated. The GGE biplot view revealed good stability and responsiveness for both hybrid Code 33 (G5) and Acc.036 (G2). Based on performance per se, the hybrid Code 33 showed better adaptation to the ecology. However, further assessment on oil quantity and quality, and cost benefit analysis of the hybrid(s) in comparison to the local varieties is highly recommended.

Inter-Ethnic Violence in Nigeria and the Proposed Solution to Address Them

Inter-ethnic violence in Nigeria refers to conflicts and tensions between different ethnic groups within the country. It is a complex issue with deep-rooted historical, social, and political factors. The subject matter of this paper is to examine the prevalence of inter-ethnic tensions in Nigeria, which is defined as an act of aggression or violence between clusters of two or more distinct ethnicities. It identifies the underlying reasons for this violence, which include sectarian strife, ethnic rivalry for resources, political instability, and economic disparity. It also examines the impact of this violence on Nigeria's population and economy, which has been linked to an increase in poverty, dislocation, and migration. Finally, this paper provides an investigation of the approaches employed by the government of Nigeria to tackle this issue, including their successes and failures, and proposes effective solutions to reduce the occurrence of this type of violence. To address these challenges, some proposed solutions include promoting dialogue and reconciliation between ethnic groups, implementing inclusive governance structures, and investing in education and economic opportunities for all communities. Ultimately, this paper emphasizes the need for inter-ethnic collaboration to reduce the incidence of this form of violence and promote security and stability in Nigeria.

Financial Development and Income Inequality in Nigeria: Testing the Financial Kuznets Curve Hypothesis

This study aims to investigate the link between financial development and income inequality in Nigeria, considering the potential existence of a financial Kuznets curve in Nigeria from 1986 to 2022. The study uses datasets from the World Bank and International Monetary Fund Database. It employs the Augmented Dickey-Fuller (ADF), Phillips-Perron (PP), Zivot-Andrews (ZA), ARDL bounds testing approach, and the Toda-Yamamoto causality test to determine the direction of causality between the two variables. The study finds evidence of an inverted U-shaped relationship between financial development and income inequality, potentially supporting the Financial Kuznets curve hypothesis in Nigeria. Additionally, the results of the Toda-Yamamoto causality test show a unidirectional causality running from financial development to income inequality. The findings have significant implications for economic development and social stability in Nigeria, emphasizing the need for targeted policies to mitigate the potential adverse effects of financial development on income inequality. This study fills a gap in existing research by examining the financial Kuznets curve in Nigeria and accounting for structural breaks, thus contributing valuable insights to the ongoing debate on finance and inequality.