Research Articles in Economics

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INFLATIONARY RATE IN NIGERIA: IMPACT OF FOREIGN CAPITAL INFLOWS
(DOI: 10.18488/journal.88.2021.71.44.54, 2021-09) Olabisi, Olabode Eric
As the prices of daily needs are aggravating in Nigeria, the value of the country’s currency (naira) is less appreciated on a daily basis, and this pose a threat to a good standard of living in Nigeria. Therefore, this study investigated the impact of foreign capital inflows on the persistent increase in inflation in Nigeria over the period of 1985 to 2019. The Autoregressive Distributed Lags was used to obtain the parameter estimates of the long run relationship between foreign capital inflows and inflation. By using the Forecast Error Variance Decomposition techniques, the cause-effect analysis of foreign capital inflows and inflation was determined. Results provide evidence of a long run relationship between the series. Results further indicate that inflation is sensitive to foreign capital inflows variables such as net official development assistance received and remittance inflows in Nigeria. Policies that reduce the negative impact on inflation are recommended in the body of the paper.
Toward sustainable electricity generation mix: an econometric analysis of the substitutability of nuclear energy and hydropower for fossil fuels in Canada
(International Journal of Green Energy, 2021-02) Solarin, Sakiru Adebola; Bello, Mufutau Opeyemi; Olabisi, Olabode Eric
The dominance of fossil fuels in electricity generation fuel mix continues to undermine the importance of electricity as a critical factor for sustainable economic development. As with most economies of the world, the Canadian fuel mix for electricity generation is dominated by fossil fuels. This scenario creates both environmental and resource sustainability challenges. There are questions marks over the potentials of nonfossil energy sources to address these challenges and ensure a more sustainable electricity generation. This study aims to examine the potentials of nuclear energy and hydropower to substitute the fossil fuels of coal and natural gas in electricity generation for Canada. A trans-log production function was estimated with the ridge regression method to obtain the parameter estimates. The empirical findings show that, with the exception of coal input, all energy inputs have positive output elasticities, which indicate that an increase in the energy inputs will increase output in Canada. The results further provide evidence of positive elasticity of substitution between the non-fossil energy sources and the fossil fuels which give credence to the hypothesis that clean energy sources such as nuclear energy and hydropower have the potential to substitute for the fossil fuels of coal and natural gas the electricity generation process for Canada. The estimates show that the smallest substitution occurs between coal and gas, which is an additional evidence that clean energy has higher chances of substituting fossil fuels. Policies that promote the adoption of more renewable and clean energy sources are recommended in the body of the paper.
Technological dependence in Africa: its nature, causes, consequences and policy derivatives
(Technovation, 1996) Fabayo, J.A.
Technology is critical to development because it is a resource which endows economic growth with much of its capacity for satisfying human wants. Whether the need is for more food, better education, improved housing, health care, transportation and telecommunication, increased industrial output, etc., modern technology plays a decisive role, particularly as it enhances the efficiency of resource utilization, spurs the creation and expansion of resources (e.g. physical capital) and diminishes the importance of natural factor endowment in economic progress. It is this developmental role of technology that makes its acquisition or the capability for generating it important and underscores the need for its importation in Africa, given the continent's inability to source it locally. It is, however, the contention of this study that African countries' reliance on technology imports has not only inhibited local technological development efforts in the continent, but has also contributed, in a rather cumulative manner, to the distorted development or underdevelopment of the African economy. Unless concerted efforts are made to build up a strong indigenous scientific and modern technological development capability that can guarantee some degree of self-reliance in technological matters, any hope for a rapid and internally stimulated development of the African economy will remain as a mere illusion.
Street Trading Activities and Maternal Health in Urban Areas of Nigeria
(Global Journal of Human Social Science Arts and Humanities, 2012) Amoo, Emmanuel; Ola-David, Oluwayomi; Ogunrinola, I.O.; Fadayomi, T.O.
The study assessed the health risks associated with street trading activities among selected mothers in urban centers of Nigeria. The data used was extracted from national survey data among 3,873 street traders selected in various Central Business Districts (CBDs) across three major cities of Nigeria, namely, Lagos, Kano and Port Harcourt. The study showed that street trading has provided job opportunities for mothers but the impact of the business on their welfare is not visible considering their weekly income that is far below their weekly expenditure. Respondents with primary, secondary and tertiary education are 0.879, 0.553 and 0.818 less likely to be injured while trading on the street compared to individuals who have no formal education. The authors suggest due recognition to be given to the activity and that street tradersgovernment partnership be established in order to safeguard the health of the operators.
Inflation: How Much is Too Much for Economic Growth in Nigeria
(Indian Economic Review, 2006) FABAYO, JOSEPH ADEMOLA; AJILORE, OLUBANJO TAIWO
This study follows the methodology of Khan and Sendhadji (2001) to examine the existence of threshold effects in the inflation-growth relationship, using Nigeria data for the period 1970 to 2003. The results suggest the existence of inflation threshold level of 6 percent. Below this level, there exists significantly positive relationship between inflation and economic growth, while above this threshold level, inflation retards growth performance. Sensitivity analyses conducted confirmed the robustness of these results. This finding suggests that bringing inflation down to single digits should be the goal of macroeconomic.
Contributory Pension Fund Administrations in Nigeria: Stochastic Frontier Analysis of Its Efficiency and Implications for Policy Designs
(Journal of Financial Risk Management, 2019) Ololade, Babatunde Moses; Adegboye, Abiodun Adewale; Salawu, Rafiu Oyesola
The study assessed the technical efficiency of pension fund administrators in Nigeria using Stochastic Cost Frontier Model to generate efficiency scores for each of the eleven (11) selected pension fund administrators from a population of twenty-one (21). Panel data gathered from the annual reports of the selected pension fund administrators and the National Pension Commission were analysed using the maximum likelihood technique. The result showed that inefficiency, in varying degrees, existed in the selected fund administrators due to input costs on labour, equipment and premises and the mean and median efficiency scores were about 75% and 72% respectively. While the most efficient pension fund administrator recorded inefficiency score of 0.077, the least efficient pension fund administrator had inefficiency score of 0.388. The study concluded that increase in profitability, number of contributors, engaging in open fund investment activities and merger and acquisition reduce operating cost. It was therefore recommended that there should be a regulator-initiated merger and acquisition in the industry to eliminate waste, with positive impact on investment income. Besides, the regulatory agency should ease and expand transfer windows for existing contributors to transfer their pension contributions from an inefficient pension manager to efficient one to engender competition in the pension industry.
Revenue beyond Oil Reliance: Can Nigeria Leverage Non-oil Tax Revenue for Inclusive and Pro-poor Growth?
(Human Resource Management Academic Research Society, 2020-08) Owuru, Joel E.; Olabisi, Olabode E.
The main aim of this study was to empirically examine the possibility for Nigeria to leverage non-oil tax revenue for inclusive and pro-poor growth. This is done through an analysis of quarterly data on oil tax revenue and non-oil tax revenue factors spanning 2011-2016. The study adopts Fully Modified Ordinary Least Square (FMOLS) estimation strategy in order to make inferences. The results of our analysis show that non-oil tax revenue has a positive contribution to inclusive growth in Nigeria than oil revenue. Based on this empirical evidence, non-oil tax revenue has the potential of aiding sustainable inclusive growth in Nigeria; hence the economy of Nigeria should be diversified intensively to increasingly harness the potential opportunities of the real sectors where non-oil tax revenue is generated in order to attain sustainable inclusive and pro-poor growth.
CAUSALITY TESTING BETWEEN TRADE OPENNESS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: FRESH EVIDENCE FROM SUB-SAHARAN AFRICAN COUNTRIES
(ECONOMIA INTERNAZIONALE, 2018) OLABODE, OLABISI E.
Previous works are yet to reach a consensus about the direction of causality between Trade Openness (TO), Foreign Direct Investment (FDI) and Economic Growth (EG), in particular, using a panel data analysis for Sub-Saharan African (SSA) countries. This study adopts first and second generation econometric methods to analyse the relationships between trade openness, FDI and economic growth in Sub-Saharan Africa countries over the period 1980-2016. The Westerlund cointegration, the Common Correlated Effect Mean Group (CCEMG), and the Bootstrapp Granger causality econometric techniques were adopted. Findings show there is a cross-sectional dependence among the 23 SSA countries examined. A long-run cointegration among trade openness, FDI and economic growth also exists. A positive and significant relationship exists between trade openness and economic growth. FDI indicates a positive and significant relationship with economic growth. The panel error correction term (ECT) result further confirmed the long-run relationship among the variables. A bidirectional causal relationship exists among trade openness, foreign direct investment net inflows and economic growth for Gambia, Senegal and South African countries. As part of our policy recommendations, SSA government should promote trade openness by reducing or eliminating trade tariff and non-tariffs that can limit the economic activities in the region.
Effects of Selected Macroeconomic Variables on Stock Market Returns in Nigeria
(Asian Journal of Economics, Business and Accounting, 2020-08) Aremo, Adeleke Gabriel; Olabisi, Olabode E.; Adeboye, Oyinlola O.
The paper empirically examines the effects of selected macroeconomic variables on stock market returns in Nigeria within the period 1985 and 2014 with a view to determining the macro-factors determining stock market returns in Nigeria. The Autoregressive Distributed Lag (ARDL) approach was employed to examine both the short and long-run effects of selected macroeconomic variables on stock market returns using annual time series data spanning 1985 to 2014. The findings show that both foreign direct investment inflows and external debt do not have significant impact on stock market returns in Nigeria while money supply and trade openness have significant positive effect on stock market returns in the long-run. The annual speed of adjustment towards equilibrium is 91 per cent. The causality results show two-way causality between the nominal stock market returns and foreign direct investment inflows, while one-way causality runs from nominal stock market returns to trade openness.
Toward sustainable electricity generation mix: an econometric analysis of the substitutability of nuclear energy and hydropower for fossil fuels in Canada.
(Taylor and Francis : International Journal of Green Energy,, 2021-02) Solarin, Sakiru Adebola; Bello, Mufutau Opeyemi; Olabisi, Olabode Eric
The dominance of fossil fuels in electricity generation fuel mix continues to undermine the importance of electricity as a critical factor for sustainable economic development. As with most economies of the world, the Canadian fuel mix for electricity generation is dominated by fossil fuels. This scenario creates both environmental and resource sustainability challenges. There are questions marks over the potentials of nonfossil energy sources to address these challenges and ensure a more sustainable electricity generation. This study aims to examine the potentials of nuclear energy and hydropower to substitute the fossil fuels of coal and natural gas in electricity generation for Canada. A trans-log production function was estimated with the ridge regression method to obtain the parameter estimates. The empirical findings show that, with the exception of coal input, all energy inputs have positive output elasticities, which indicate that an increase in the energy inputs will increase output in Canada. The results further provide evidence of positive elasticity of substitution between the non-fossil energy sources and the fossil fuels which give credence to the hypothesis that clean energy sources such as nuclear energy and hydropower have the potential to substitute for the fossil fuels of coal and natural gas the electricity generation process for Canada. The estimates show that the smallest substitution occurs between coal and gas, which is an additional evidence that clean energy has higher chances of substituting fossil fuels. Policies that promote the adoption of more renewable and clean energy sources are recommended in the body of the paper.
Post-Secondary Schooling Quality and Manufacturing Capacity in Africa
(Sociak Science Research Network, 2014) Adewole, Musiliu A.; Oluyomi, Ola-David
Quality investment in post-secondary schooling could facilitate structural transformation of African economies presently dominated by small-scale agricultural activities. To probe the causal relationship between human capital quality and manufacturing capacity, we build a new database of schooling quality. The country-level average test score of students in the GMAT examinations between 1984 and 2006 is used as the main measure of post-secondary schooling quality. Our OLS results suggest a strong and positive relationship between schooling quality and manufacturing capacity. Our results are robust to the addition of a fairly large number of relevant variables, corrections for influential observations and check for self-selection related biases. Furthermore, we use 2SLS technique to correct for possible endogeneity, omitted variable bias and measurement error of the schooling quality indicator. Our instrument passed the tests of exogeneity, although the maximum likelihood technique is used due to weak instrument problem
LONG RUN LEADERSHIP PRODUCTION AND SELECTION MODEL FOR DEMOCRACIES IN AFRICA
(Social Science Research Network (SSRN), 2015) Adewole, Musiliu A.
Within the broad agenda of economic development, we suggest a model of leadership production and selection which shows how the optimal number of people required to bridge the gap between actual and potential economic performance could be raised and selected into public office. The honesty and competence of those selected helps to overcome the considerable inertial against take-off of economic development by inculcating common values in peoples from across diverse groups. By imbibing common norms through the school system, we generate economics of scale which otherwise would not be available in scattered, self-governing and well-run communities. The selection process uses the school system to make social progress an important leadership concern and economic advancement an important part of individual utility function. In generating this special breed through the school system, the incompetent individuals are screened out from the competent individuals as well as the honest from the dishonest ones. The honest individuals are sorted into three ability categories for public governance for the three tiers of government in democratic societies. The ultimate aim is to motivate every family towards producing individuals whose characters and competences are compatible with the requirements of developmental states.
POLITICAL SELECTION METHOD FOR AFRICAN DEMOCRACIES
(SSRN, 2015) Adewole, Musiliu A.
This essay, having identified the failure of political leadership as the bane of economic development and democracy in Africa, has outlined mechanisms for selecting high quality leaders into public office. In the first stage of the screening process, certain elements of costs are imposed on the intending politicians so as to deter the entry of dishonest politicians into politics. This is accomplished via the inverse relationship between the degree of honest and the costs of participation. The unique thing is that separating equilibrium that makes participation costs zero for honest individuals and heavy for their dishonest counterparts could in principle be obtained. Interestingly the mechanisms that generate information about the past of intending politicians also impose heavy costs on groups which supply this information.
Labour Market Outcome of 1976 Universal Primary Education in Nigeria
(Social Science Research Network, 2015) Adewole, Musiliu A.
In this study attempt to estimate the impact of schooling attainment on an important indicator of labour market performance: wealth. OLS and IV regressions produced economically and statistically significant estimates, with OLS estimate of about 18 percent and IV estimate of about 30 percent when pooled DHS is used and about 56 percent when HNLSS data are employed. We have no evidence that OLS estimates are an artifact of the way the dependent variable is constructed or influential observations are driving observed outcome. In our IV regression specification, econometric tests prove that instrument is strong. Indicative and formal tests of instrument validity such as addition of new relevant variables, falsification tests, plausibly exogenous test and over-identification test are proofs of instrument validity. A number of econometric strategies implemented indicate that influential observations and selective migration are not biasing our results.
Effective Service Delivery of Nigeria’s Public Primary Education: The Role of Non-State Actors
(African Finance and Economic Association, United States, 2013) George, E. S.; Olayiwola, T.; Adewole, Musiliu. A.; Osabouhien, M. A.
The study examines and analyses the role of Non-State Actors (NSAs) in public provision of primary education in Nigeria using descriptive and econometric techniques. The analysis demonstrates that the major source of funding of public primary education in Nigeria flows from the Federal Government to the State government and finally to the Local Government Education Authority (LGEA). The study shows that NSAs’ activities are mainly the provision of school inputs with little or no role monitoring and management of public primary schools. It was found that the presence of private school inspectors has significant positive effect on pupils’ performance. Parents occupation and household qualities especially type of building were found to have positive impact on the pupils’ performance. Based on these findings, the study recommends the need for adequate involvement of NSAs in the management of public primary schools and improved inspection of schools as ways of improving the quality of primary education in Nigeria.
Analysis of the cost of governance and options for its reduction in Nigeria
(Nigerian Journal of Economic and Social Studies, 2007-10-05) Adewole, Musiliu A.; Osabuohien, E. S.
Government at any given level and over a defined territory can be treated as a typical example of a natural monopoly in the sense that only one can exist at any particular time. Thus, the traditional theories of costs and monopoly can be very useful in the analysis of the cost structure of government. Like any other unchecked private monopoly, government and by extension governance, can produce sub-optimal units of public good in which it has comparative advantage. Depending on the resources at its disposal and the tax-elasticity of public goods, massive deadweight costs, among others, often result from a high cost governance structure. This paper explores the effects of destructive political competition. It suggests constitutional provisions that will guarantee true separation of powers, restructure the mechanism of governance to, among other measures, limit the size of the cabinet to reduce the high cost of governance in Nigeria.
ENERGY CONSUMPTION AND PRODUCTIVITY IN NIGERIA
(academia.edu, 2015) Olarinde, Omolola S.; Abraham, Adeniran
Energy is critical to the survival and expansion of any economy, but in Nigeria, energy consumption has been skewed towards household use, and below thresholds for sector driven growth. The paper updates in time and methodology those studies highlighting the significance of energy use for economic growth, using the Bound test and the Auto regression Distributed Lag (ARDL) to establish the long and short run relationships between disaggregated energy consumption and economic growth in Nigeria from 1990 to 2016. The variables considered were real GDP, energy consumption decomposed into electricity and petroleum consumption, labor and capital. The findings showed that, in the short and long run, petroleum consumption and labour have a significant positive relationship with GDP. Furthermore, the causality results showed that feedback causation between economic growth and energy consumption as well as labour exists, while one-way causation runs from labour to economic growth. The expansion and diversification of the power-generation portfolio in the country would improve energy consumption towards better output. Also, policies to encourage industrialization would move energy demand towards increasingly productive uses.
SETTING SUSTAINABLE STANDARDS FOR BIOFUEL PRODUCTION: LEGAL AND INSTITUTIONAL IMPERATIVES
(Afe Babalola University:, 2013) Olarinde, Damilola; Olarinde, Omolola S.
Due to the extensive warnings and scientific predictions on the potential and emerging impacts of global climate change on human life and survival, policy makers across the world are beginning to embrace renewable energy options as ways to reduce reliance on fossil fuels. 1 As the United States President noted: But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy... We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before.
Revisiting the Effects of Workers’ Remittances on Economic Development in Nigeria
(Journal of Economic and Social Thought, 2015-12-18) Olubiyi, Ebenezer; Olarinde, Omolola S.
Poverty in Nigeria continues unabated despite huge inflow of remittances. Our result supports the argument that remittances can improve economic growth but can also worsen overall wellbeing. Reasons for this are, first, remittances beneficiaries in Nigeria are concentrated in the middle income class with high propensity to consume. Second, due to high propensity to consume, consumption triggers good prices in such a way as to worsen the purchasing power of the poor. Third, institutions are weak and the poor do not benefit from weak institution. Thus good quality institutions should be encouraged while ostentatious spending should be discouraged.
Addressing the energy consumption-economic growth nexus: The Nigerian case
(Institute for Oil, Gas, Energy, Environment and Sustainable Development (OGEES Institute), 2018) Olarinde, Omolola S.; Adeniran, Abraham
Energy is critical to the survival and expansion of any economy. In Nigeria, energy consumption has been skewed towards household use, and below thresholds for sector-driven growth. The article updates, in time and methodology, those studies highlighting the significance of energy use for economic growth, using the Bound test and the Auto Regression Distributed Lag (ARDL) to establish the long- and short-run relationships between disaggregated energy consumption and economic growth in Nigeria from 1990 to 2016. The variables considered are real GDP, energy consumption decomposed into electricity and petroleum consumption, labour and capital. The findings show that, in the short and long run, petroleum consumption and labour have a significant positive relationship with GDP. Furthermore, the causality results show that feedback causation between economic growth and energy consumption as well as labour exists, while one-way causation runs from labour to economic growth. The study recommends diversification of the power-generation portfolio in the country, as this will improve energy consumption. Also, full deregulating policies in the energy sector would encourage industrialization and move energy demand towards increasingly productive uses. Finally, a strong institutional framework is needed to ensure energy policies achieve their objectives and targets

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