Relationship between Domestic Debt, Macro-Economic Indices and Viability of the Construction Sector in Nigeria

Abstract

This study aimed at establishing relationship between domestic debt, macroeconomic indices and the viability of the construction sector of Nigeria economy with a view to initiate empirical model for investor's decision making. Archival data on monetary and fiscal macroeconomic indices such as unemployment rate; exchange rate; inflation rate; interest rate; domestic debt and the contribution of the construction sector to the GDP between years 2001-2011 were collected from Nigeria Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN) official gazette. The data were analyzed using multiple regression analysis to establish the relationship that exists between the identified fiscal macroeconomic variables. The analysis revealed that the adjusted R 2 of 0.629 or 63.0% of the Viability of the Construction Sector (proxy by Construction industry sector GDP growth rate(GDP ci)) is explained by the selected macroeconomic variables. While this study conclusion avail for long-run behavior of the economy and challenges of investment decision as it affects construction business, it recommended that appropriate guidance and understanding of macroeconomic policy is required by investors and policy makers for decision making and attracting investment to the building and construction subsector of the economy.

Effects of Macroeconomic Indicators on Cost of Building Materials in Nigeria

“…Macroeconomic indicators' deteriorating and aggravating effects over time have raised concerns about the construction sector (Ojo & Awodele, 2013). Macroeconomic imbalances have developed in Nigeria over the past few years (International Monetary Fund, 2001), with current rates of accelerated double-digit inflation (22.79%), exchange rates (N850 to US $1) according to the current Nigerian commercial bank rate, low gross domestic product (GDP) (4.20%), unemployment (37.7%), and interest rates (18.50%) leading to poverty levels of 40.1% (National Bureau of Statistics (NBS), 2022), and low-capacity utilization, among other factors.…”

Towards the Establishment of Relationship between Macroeconomic Indicators and Cost of Public Educational Buildings in Ghana

“…The stability of macroeconomic variables promotes profitability of businesses which propels them to a stage where they can access financing for sustaining growth. According to Olanrewaju et al (2013) these macroeconomic indicators, oil price, exchange rate, unemployment and underemployment, inflation, and external reserve in Nigeria, had been relatively unstable since the economic recession in 2008 and had affected growth [17]. In Ghana [18] identified several macroeconomic indicators that affect growth to include inflation, fiscal policy, unemployment, budget deficits, taxation, interest rate and exchange rate, and government expenditure.…”