The significant role of agricultural sector cannot be underestimated in any nation. It has been the source of feeding of the populace and income generation for other developmental activities. As a result, various governments have been making concerted efforts to improve economic growth and agricultural productivity through agricultural creditbut rarely one can see any improvement in the sector. It is in line with these its fundamental role that this study makes a giant stride to examine the relationship between agricultural credit and economic growth in Nigeria. The study employed time series data from Central Bank of Nigeria, Statistical Bulletin and National Bureau of Statistics which spanned from 1986-2014. This study carried out Auto-Regressive Distributed Lag (ARDL) approach to investigate the variables. The findings showed that short and long run relationship existed between agricultural credit and economic growth in both short and long run respectively. Moreover, real exchange rate and private domestic investment as control variables had direct effect on economic growth whereas inflation rate revealed an inverse relationship in the model. The study concluded that economic growth is influenced by dynamic variables such as credit to agricultural sector, real exchange rate, real interest rate, private domestic investment and inflation rate in Nigeria. The study therefore suggested that concerted efforts should be made by policy makers to increase the level of productivity of agricultural sector in Nigeria through adequate credit to the sector so as to boost the growth of the economy.Key wordsAgricultural credit, agricultural sector, autoregressive distributed lag, economic growth
I. Omosebi AYEOMONI &Saheed A.ALADEJANA
Interest rate has been recognized as an essential tool for the sustainability of real sector across many countries in which agricultural sector is one of the prominent sectors in every economy. In Nigeria however, finance has remained a major challenge of the agricultural production for the procurement of inputs, such as seeds, implements and fertilizers over the years. All efforts channeled to this sector with anticipated result on agricultural productivity have not boosted the performances of the real sector. This study examined the effect of interest rate on agricultural output in Nigeria using stationary, co-integration test, Granger Causality test and ordinary least square approach. The study applied time series data from Central Bank of Nigeria, Statistical Bulletin and National Bureau of Statistics which spanned from 1980-2014. The unit root test employed showed that the variables were stationary in the short run and co-integration test confirmed a long run relationship between the variables. The empirical result revealed negative relationship between interest rate and agricultural output in the model. Furth ermore, bank credit to agricultural sector, population growth rate, government expenditure on education and infrastructural facilities used as other control variables have positive effect on agricultural output. Finally, Granger Causality test confirmed both uni and bi-directional relationship in the long run. The study therefore concluded that agricultural output was significantly influenced by dynamic variables such as interest rate, bank credit to agricultural sector, population growth rate, government expenditure on education and infrastructural facilities on road in Nigeria during the study period. Keywords: Agricultural sector, Real sector, interest rate volatility, financial reforms
Omosebi Ayeomoni, Gbenga F. Olajide , W. H. Agbaje, S. A. Aladejana
The Nigerian financial sector has undergone series of reforms aimed at repositioning agricultural sector especially agricultural export for the economy. As a result, various governments have tried to improve agricultural export via financial sector reforms over two decades but it seems not to have been achievable. Thus, the main purpose of the study is to re-examine the relationship between financial sector reforms and agricultural export in Nigeria. Specifically, the study investigated the effect of financial sector reforms on agricultural export. The study used time series data from World Bank and Central Bank of Nigeria, Statistical Bulletin which spanned from 1980-2014. This study used impulse response function and variance decomposition analysis. The unit root test applied to the variables showed that the variables were stationary in the short run and co-integration test confirmed a long run relationship between the variables. The empirical results of impulse response function and variance decomposition showed that financial sector reforms had significant effects on agricultural export. The study also discovered that the standard deviation shock in financial reforms influenced agricultural export in Nigeria. The study concluded that agricultural export is influenced by market capitalization, broad money stock and credit to private sector in Nigeria. The study recommends that there is the need to adequately deepen the financial reforms through innovations, adequate and effective regulation and supervision should be put in place in order to boost agricultural export in Nigeria.
Keywords: Financial sector reforms, Agricultural export, Impulse Response function, Variance Decomposition
I. Omosebi, AYEOMONI &Saheed A.ALADEJANA
Thisstudy examinedthe sustainability of external debt in Nigeria.Thestudy relied on secondary data which were collected from Central Bank of Nigeria (CBN) Statistical Bulletin. Thereafter, the study employed Augmented Dickey Fuller (ADF),Phillip Peron (PP) unit root test and Johansen Co-integrationfor pre-test, and Auto-regressive distributed lag (ARDL) techniqueThe ADF and PP unit root test confirmed stationanaryof the variables at level and at first level difference;the Johansen Co-integration established two co-integration relationships at 5% level of significance.The ARDL result established a positive and significant effect of external debt-to-GDPratio and debtservice-to-export on debt sustainability, while inverse relationship was found between externaldebt-to-export ratioand debt sustainability.The study therefore, concluded thatexternal debt-to-GDP ratio and debt service-to-export ratioarethe significance appropriate method for external debt sustainabilityin Nigeria.It was therefore recommended thatNigerian government should adopt external debt-to-GDP ratio and debt service-to-export ratioindicators in determine the ability to sustain her external debt and reduce too much accumulation of external debt.
Keywor ds: External debt-to-GDP ratio, External debt-to-export ratio,debt service-to-export ratio,ARDL
FALADE, Abidemi Olufemi Olusegun, ALADEJANA, Saheed Aliu and OLUWALANA, Feyisayo Abosede
The study examinedhouseholds’energy demand in Ondo State between January 2016 to February 2017.While the impact of price and income elasticity of the consumer on their energy demandwas also investigated.Almost Ideal Demand System (AIDS) was applied with stratified random sampling technique for empirical analysis. The study examined 223 responses through primary data generated on usage of energy products. The findingsshowed that electricity (0.98) and kerosene (0.94) are necessities sincetheir coefficients were less than 1. The result further established that Diesel(1.01), Petrol(1.02)and Gas(1.01) are luxuries since their elasticities are greater than 1. The findings revealed that estimated expenditureelasticities were all positiveand statistically significantat 5%significant level, indicating that all theselectedenergyproductsare normal goods. The study discovered thatapart from the major occupations of the respondents, other households’ demographic variables were not significant in determining energy demand. Therefore, the study recommended that policy-makers should consider variations in the coefficients of elasticities of each energy product in making policy decisions.
Keywords:Energy, Households, Demand, AIDS, Elasticities.
Olubokun,Sanmi; Agbede, Moses Oyeyem and Aladejana, Saheed Aliu
The link between economic growth, inequality and poverty has been widely debated in the literature. This has affected the economy ofdeveloping countries in which Nigeriainclusive.This study examined the relationship between economic growth, inequality and poverty in Nigeria.The study used time series data from World Development Bank and Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics (NBS) from 1980 to 2016. Thestudy employedFully Modify Ordinary Least Square (FMOL) methods, unit root test and granger causality test .The unit root test showed that the variables were stationary in the short run and co-integration test confirmed a long run relationshipbetween the variables. The Granger causality result showed that only poverty rate (POV) granger causegini coefficient (GINI). Poverty rate (POV) and trade openness (OPEN) established uni-directional relationship in the estimated model in Nigeria. The R-squared (R2) showed that forty-one percent (41%) changes in variations in Real Gross Domestic Product were explained by the predictor variables in the model. The results showed a positive relationship between trade openness and the real gross domestic product in Nigeria. This implied that a one percent (1%) increase in trade openness bring about 17% risein real gross domestic product in Nigeria. Thestudy concluded that inequality increased poverty level and at the same time increased economic growth duringthe study period. Also poverty had positive effect on income inequality. Therefore, policies that will reduce inequality will also reduce poverty and vice versa. It is therefore recommended that for the economy to experience growth, inequality must be comprehensively addressed as this will subsequently reduce poverty. Moreover, more emphasis on basic education will help to address the twin monster of inequality and poverty.
Saheed Aliu, ALADEJANA; John Adejare, ALABI and Saudat Adewumi, BOLAJI
Energy is fundamental to all human activities in every economy. Available findings on the relationship between disaggregated energy consumption and industrial output have been mixed and the previous studies failed to consider diesel and electricity which are important components of energy consumption. Hence, thestudy examined the nexus between disaggregated energy consumption and industrial output in Nigeria. The null hypothesis was that disaggregated energy consumption has no significant relationship with industrial output in Nigeria. The study applied the Fully Modified Ordinary Least Square method on data obtained from the Central Bank of Nigeria and International Energy Association Statistical Bulletin,1986-2018, to examine the relationship between disaggregated energy consumption and industrial output in Nigeria. The findings showed a positive relationship between industrial output, premium motor spirit, diesel, coal and human capital. By implication therefore, the variables contributed significantly to increase industrial output within the study period. However, an inverse relationship existed between industrial output, consumption of gas, electricity, kerosene, and capital stock due to their inadequate, irregular and epileptic supply in Nigeria. The study concluded that industrial output is strongly influenced by premium motor spirit, diesel, electricity and gas consumption in Nigeria. The study, therefore,recommended that energy policies should be sector-specific, taking into cognizance the components of energy consumption that influence the industrial output in Nigeria. Keywords: Disaggregated Energy Consumption, Industrial Output, Human Capital, Fully Modified Ordinary Least Square
Igbamiyemi Omosebi Ayeomoni; Saheed Aliu Aladejana; Kazeem Tunde Ajetunmobi and Temitope Michael Asagunla
International remittances represent the second most important source of external funding for developing countries (Nigeria Inclusive) after foreign direct investment (FDI), which have helped to improve the standard of living of millions of people by providing them with essential resources such as food, housing, health, and education. From the literature which was both on Nigeria and outside Nigeria, a consensus is yet to be reached as per nexus between remittance and poverty. This paper examined the effect of international remittances on poverty reduction in Nigeria, using secondary sources of data for the period of 1986 to 2018 in Nigeria. The data were sourced from the Central Bank of Nigeria Statistical Bulletin and the World Bank’s WorldDevelopment Indicators (WDI). The study employed the Auto-Regressive Distribution Lagged (ARDL). Therefore, the findings confirmed short-run relationships existed between the variables in the model, whereas long-run relationships also existed between exchange rate, remittances, real gross domestic product and poverty. Furthermore, remittances have a strong and statistically impact on poverty reduction, due to the fact that it directly increases the income of the poor people, smooth household consumption, and ease capital constraint. The same finding established positive and significant relationship between the exchange rate and poverty in the model during the study period. However, gross domestic product showed an inverse relationship on poverty in Nigeria. It was, therefore, suggested that the government should formulate the policies that would enhance the number of remittances by reducing the exchange rate and transaction cost of transferring the remittances through formal channels.
Keywords: Remittances, poverty, trade openness, Health, and Social Services.
ALADEJANA, Saheed Aliu; OLUWALANA, Feyisayo Abosede ALABI, John Adejare and BOLAJI, Saudat Adewumi
This study evaluates debt burden, implications for infrastructural development in Nigeria for the period 1986-2019. The study embraced annual time-series data and employed the Fully Modified Ordinary Least Squares (FMOLS) estimation techniques to examine the relationship of the variables. The findings revealed that both current and lagged coefficients show a positive and significant relationship between domestic debt and infrastructural development; while the current and lagged coefficient of external debt shows a negative relationship with infrastructural development and not statistically significant during the study period. The implication of the findings is that increases in domestic debt of the federal government leads to an increase in Infrastructural development (at the short run) while federal government external debt hitherto has not resulted to any improvement in infrastructural development. Finally, Granger Causality test confirmed both uni and bi-directional relationship in the long run. The study,therefore, concluded that the external debt has not contributed significantly in the development of Nigerian’s infrastructure and that the huge external debt profile of Nigeria even before the debt forgiveness of 2005/2006 to date is not justifiable and is uncalled for. It suggested that external loans should be restricted to specified identifiable infrastructural or productive projects.
Keywords: Debt burden, External Debt, Domestic Debt, Federal Government Capital Expenditure, Infrastructural Development
Aladejana, S. Aliu; Idowu Adeniyi, Okeowo PhD; Oluwalana, Feyisayo Abosede and John Adejare, Alabi