This study explored the relationship between foreign aid and economic growth in Nigeria from 1984 to 2017. The Autoregressive Distributed Lag Bounds method to cointegration was employed for this study. The results revealed that foreign aid did not contribute to economic growth in Nigeria. Also, the macroeconomic policy environment did not contribute to economic growth in both the short-run and long-run. Furthermore, the results revealed that the impact of foreign aid on economic growth in Nigeria was contingent on the quality of the macroeconomic policy environment. Hence, the claim that the effectiveness of aid is dependent on the q policy environment was valid for Nigeria. The study, therefore, recommends that the policymakers of the government should put in place a sound macroeconomic policy environment that is stable to stimulate domestic saving and ensure the effective utilization of foreign aid. Besides, there is a need for the diversification of the economy through viable alternatives such as agriculture, industrialization and trade to lessen heavy reliance on foreign aid as a major means of stimulating economic growth. Furthermore, the Economic and Financial Crimes Commission and Independent Corrupt Practices and other Related Offences Commission, established to fight corruption should be effective in their job and convince development partners and other aid donors that it is no longer business as usual for those that divert public resources including foreign aid funds for personal gains and the government should provide incentives to private investors and good enabling environment for the thriving of private businesses.
This study examined the relationship between military outlay and economic growth in the Lake Chad Basin countries of Nigeria and the Republic of Chad respectively by testing the causal link between these two principal variables. The data ranges used for Nigeria and Chad were 1981-2019 and 1983-2019 respectively. The econometric method employed for this study was the Autoregressive Distributed Lag Bounds approach to cointegration. The results revealed that Nigeria's military outlay exerted a positive and insignificant relationship with economic growth. However, the Republic of Chad's military outlay had a positive and significant link with economic growth. The results of the causality test showed that there was no causal relationship between real GDP per capita and military outlay in both Nigeria and the Republic of Chad. These findings for Nigeria and Chad imply that they can pursue the policy objectives of defence and economic growth independently. The study, thus, recommends that the policymakers of the governments of both countries should pursue the policy objectives of defence and economic growth independently. Furthermore, the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and other Related Offences Commission (ICPC), charged with the responsibility of fighting corruption should rise to the occasion and track down military officials that divert defence funds for individual gains in Nigeria.
The association between trade liberalization and economic growth in Nigeria was examined in this study from 1981 to 2018. The study used the Autoregressive Distributed Lag Bounds technique to cointegration. The results showed that trade liberalization do not support economic growth in Nigeria. Hence, the genuineness of the extensive trade liberalization campaign in developing countries through the bright idea of international organizations in the late 1980s and early 1990s was not validated. Furthermore, the results showed the presence of unidirectional causality from real Gross Domestic Product to trade liberalization in Nigeria. The study, therefore, recommends that policymakers of the government should balance its strategies of trade liberalization as a result of the inability of the economy to absorb the adverse shocks from foreign trade, appropriate fiscal and monetary policies should be deployed by the government for the protection of the economy against foreign influences and the diversification of the structure of export is necessary to ensure that manufactured products are exported more. Also, the Central Bank of Nigeria and policymakers of the government should prescribe sound macroeconomic policies that will ensure price stability to reduce the uncertainties associated with investment in the economy to boost economic growth. The government should also provide incentives to investors and a conducive environment for investment. Moreover, the government should initiate policies of growth for the promotion of trade. Contribution/ Originality: This study established a fact-based decision making for the realization of a trade-led economic growth and development strategies in Nigeria through the direction of causality between the principal variables. This study has deep evidence of originality; hence, the validity, reliability and uniqueness are not in doubt.
The implications of capital inflows on the economy and the fall out of the policy geared towards addressing these phenomena, especially the impact of the policy on interest rate motivated us in this study. Under the framework of ARDL and using monthly series over a period of 2010M1-2021M3, our findings showed that in the short-run, sterilization policy leads to rising interest rate in the current period. However, after a lag, sterilization policy depresses interest rate. We equally found that in the long-run, sterilization policy pushes interest rate up. In another direction, we observed a negative relationship between money supply and interest rate both in the short-run and in the long-run and the exogenous variables in the model influence interest rate significantly. We therefore recommend that different measures should be adopted to cushion the effect of unsustainable capital inflows to avoid repeated need for further sterilization and the increasing cost of sterilization in the long-run. It is also our advice that exogenous variables should be factored in when fashioning out a desirable interest rate in line with economic reality.
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