This document summarizes a study that examined the management of external reserves and economic development in Nigeria between 1980-2008. The study found a statistically significant relationship between Nigeria's management of external reserves and several macroeconomic variables. It recommends that Nigeria's external reserves be managed prudently to ensure adequate reserves are available to control risks and generate reasonable returns over the medium to long term. The document provides context on external reserves and their importance for economic stability in Nigeria.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
Evidence abound about the registered increase in foreign investment inflows in recent years. While
proponents emphasize that these inflows could engender economic growth, critics express concern that there
could be destabilizing effect on the economy if not well managed. This study therefore, attempts to examine the
effect of foreign investments (disaggregated into foreign direct investment and foreign portfolio investment)
inflows on economic growth in Nigeria with a view to ascertaining the better contributor, using time series data
from 1987-2012. The OLS and the Granger causality procedures were employed in analyzing the data. The
result displays that both foreign direct investment and foreign portfolio investment have positive and significant
effect on economic growth though the partial correlation coefficients show that foreign portfolio investment is
the better contributor. Based on the result, government should pursue policies that encourage both foreign
direct investment and especially foreign portfolio investment.
Fund Mobilization and Sustainable Economic Growth the Nigerian's Experienceijtsrd
This study examined the extent of relationship that exists between fund mobilization and economic growth in Nigeria from 1990 to 2019 using secondary data obtained from published works and CBN Statistical Bulletin. Bank Deposit BDEP , Gross Domestic Savings GDS and Gross Domestic Investments GDI were used to proxy fund mobilization, while Gross Domestic Product GDP , Per Capital Income PCI and Employment Rate EMR were also used to proxy Economic growth. The formulated hypotheses were regressed using Ordinary Least Square method. The result revealed that fund mobilization has significant relationship on GDP, but insignificant relationship on PCI and EMR. That means that fund mobilization increased the National Wealth GDP , without having any significant increase on people's standard of living PCI and EMR . Based on that result, attainment of a sustainable economic growth is a mere dream. The study advocates for citizenship advancement policy that will create more jobs which will enhance the standard of living of the populace. Again public goods and Education investment programs that can give the citizens equal opportunity to self development can serve as a bailout. Amakor, Ifeoma Chinelo | Eneh, Onyinye Maria-Regina "Fund Mobilization and Sustainable Economic Growth; the Nigerian's Experience" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd47568.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/47568/fund-mobilization-and-sustainable-economic-growth-the-nigerian's-experience/amakor-ifeoma-chinelo
Government Expenditure on Defence and Internal Security A Prerequisite for Ac...ijtsrd
Government expenditure on defence and internal security has been on the increase in the last few decades making it vital to look at its effect on the growth and development of the economy. The study examined the Government expenditure on defence and internal security a prerequisite for achieving sustainable economic growth and development in Nigeria. The study used time series data, from 1994 2020. The issue of security has become a serious threat to sustainable development in any economy and it has become a great concern in view of its escalating trend. The objective of the study is to determine the effect of government expenditure on defence and internal security on economic growth and development in Nigeria. The data employed were sourced from Central Bank of Nigeria publications and World Bank World Development Indicators WDI . The study was anchored on progressive theory of public expenditure. The dependent variables for the study are economic growth proxy by real gross domestic product RGDP and economic development proxy by Human development index HDI while the independent variables are recurrent government expenditure on defence and internal security. The data were analyzed using Vector Autoregressive Estimates VAR to ascertain the effect of government recurrent expenditure on defence and internal security on economic growth and development at 0.05 level of significance. The findings revealed that the impact of government recurrent expenditure on defence and internal security on RGDP and HDI is insignificant within the period under review. Therefore, the study recommends that government should invest more on defence and security and also design a device to ensure all the expenditures on Security and defence are considered guardedly as to consolidate on the gains realized so far. Okeke Ijeoma Chinwe | Chukwu, Kenechukwu Origin | Ogbonnaya-Udo, Nneka "Government Expenditure on Defence and Internal Security: A Prerequisite for Achieving Sustainable Economic Growth and Development. 1994-2020" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd47552.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/47552/government-expenditure-on-defence-and-internal-security-a-prerequisite-for-achieving-sustainable-economic-growth-and-development-19942020/okeke-ijeoma-chinwe
ISS Risk Special Report: China's Challenge to the World Economic Order, by Er...Hrishiraj Bhattacharjee
Now well into the second decade of the 21st century, the world is witnessing the true extent of China’s economic, political, and growing military reach. This reach and integration into the globalized world has been gradual, incremental, and quiet over the past three decades. In the shadows, China has accelerated significantly in the past 10 years. What does this mean for the established global order? This paper is a roadmap looking to join the dots on that journey.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
Foreign Investment and Its Effect on the Economic Growth in Nigeria: A Triang...iosrjce
Evidence abound about the registered increase in foreign investment inflows in recent years. While
proponents emphasize that these inflows could engender economic growth, critics express concern that there
could be destabilizing effect on the economy if not well managed. This study therefore, attempts to examine the
effect of foreign investments (disaggregated into foreign direct investment and foreign portfolio investment)
inflows on economic growth in Nigeria with a view to ascertaining the better contributor, using time series data
from 1987-2012. The OLS and the Granger causality procedures were employed in analyzing the data. The
result displays that both foreign direct investment and foreign portfolio investment have positive and significant
effect on economic growth though the partial correlation coefficients show that foreign portfolio investment is
the better contributor. Based on the result, government should pursue policies that encourage both foreign
direct investment and especially foreign portfolio investment.
Fund Mobilization and Sustainable Economic Growth the Nigerian's Experienceijtsrd
This study examined the extent of relationship that exists between fund mobilization and economic growth in Nigeria from 1990 to 2019 using secondary data obtained from published works and CBN Statistical Bulletin. Bank Deposit BDEP , Gross Domestic Savings GDS and Gross Domestic Investments GDI were used to proxy fund mobilization, while Gross Domestic Product GDP , Per Capital Income PCI and Employment Rate EMR were also used to proxy Economic growth. The formulated hypotheses were regressed using Ordinary Least Square method. The result revealed that fund mobilization has significant relationship on GDP, but insignificant relationship on PCI and EMR. That means that fund mobilization increased the National Wealth GDP , without having any significant increase on people's standard of living PCI and EMR . Based on that result, attainment of a sustainable economic growth is a mere dream. The study advocates for citizenship advancement policy that will create more jobs which will enhance the standard of living of the populace. Again public goods and Education investment programs that can give the citizens equal opportunity to self development can serve as a bailout. Amakor, Ifeoma Chinelo | Eneh, Onyinye Maria-Regina "Fund Mobilization and Sustainable Economic Growth; the Nigerian's Experience" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd47568.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/47568/fund-mobilization-and-sustainable-economic-growth-the-nigerian's-experience/amakor-ifeoma-chinelo
Government Expenditure on Defence and Internal Security A Prerequisite for Ac...ijtsrd
Government expenditure on defence and internal security has been on the increase in the last few decades making it vital to look at its effect on the growth and development of the economy. The study examined the Government expenditure on defence and internal security a prerequisite for achieving sustainable economic growth and development in Nigeria. The study used time series data, from 1994 2020. The issue of security has become a serious threat to sustainable development in any economy and it has become a great concern in view of its escalating trend. The objective of the study is to determine the effect of government expenditure on defence and internal security on economic growth and development in Nigeria. The data employed were sourced from Central Bank of Nigeria publications and World Bank World Development Indicators WDI . The study was anchored on progressive theory of public expenditure. The dependent variables for the study are economic growth proxy by real gross domestic product RGDP and economic development proxy by Human development index HDI while the independent variables are recurrent government expenditure on defence and internal security. The data were analyzed using Vector Autoregressive Estimates VAR to ascertain the effect of government recurrent expenditure on defence and internal security on economic growth and development at 0.05 level of significance. The findings revealed that the impact of government recurrent expenditure on defence and internal security on RGDP and HDI is insignificant within the period under review. Therefore, the study recommends that government should invest more on defence and security and also design a device to ensure all the expenditures on Security and defence are considered guardedly as to consolidate on the gains realized so far. Okeke Ijeoma Chinwe | Chukwu, Kenechukwu Origin | Ogbonnaya-Udo, Nneka "Government Expenditure on Defence and Internal Security: A Prerequisite for Achieving Sustainable Economic Growth and Development. 1994-2020" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd47552.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/47552/government-expenditure-on-defence-and-internal-security-a-prerequisite-for-achieving-sustainable-economic-growth-and-development-19942020/okeke-ijeoma-chinwe
ISS Risk Special Report: China's Challenge to the World Economic Order, by Er...Hrishiraj Bhattacharjee
Now well into the second decade of the 21st century, the world is witnessing the true extent of China’s economic, political, and growing military reach. This reach and integration into the globalized world has been gradual, incremental, and quiet over the past three decades. In the shadows, China has accelerated significantly in the past 10 years. What does this mean for the established global order? This paper is a roadmap looking to join the dots on that journey.
Foreign capital flows depends on the prevailing monetary forces as supported by capital flows
theory and the mechanism linking these two variables is that contraction of net domestic assets through an
open market sale of bonds will place upward pressure on domestic interest rates. Higher interest rates attract
foreign funds, generating a capital inflow which relieves the pressure on domestic interest rates. Has this
actually happened? It is against this backdrop that the present study investigated the impact of monetary policy
on international capital inflows in Nigeria for a period of 22 years (1994-2015) using time series data. The
autoregressive distributed lag technique revealed that the short-run and long-run significant determinants of
foreign capital inflows are largely from broad money supply, nominal exchange rate, inflation rate and interest
rates spread except inflation rate that is insignificant in the long-run. This outcome upholds theoretical
prediction. Long-run equilibrium relationship was found between the dependent variable and the regressors.
Further examination of the short run dynamics of the model showed that the speed of adjustment coefficients
ECM (-1) to restore equilibrium have a negative sign and statistically significant at 1% level, ensuring that
long-run equilibrium can be attained and about 89% of the short-run deviation from the equilibrium (long-run)
position is corrected annually to maintain the equilibrium. Since the empirical evidence revealed that monetary
aggregates such as broad money supply, nominal exchange rate, inflation rate and interest rates spread
influence foreign capital inflows, it is therefore recommended that government should continue to pursue
expansionary monetary policy and foreign exchange policies that would ensure competitiveness of the
economy in order to attract the much needed foreign capital inflows that would engender economic growth.
arifanee.com is world's leading website on the hottest financial news, perspectives and behind the scenes stories. arifanees.com brings you insight and information to inspire and transform your paradigm by enriching your with the best of facts and the vision.
arifanees.com
Information-Inspiration-Transformation
Human resource development and foreign remittances : The case of South Asia. The paper explains links between HRD, migration and remittances in Afghanistan, Bangladesh, Bhutan, Nepal, India, Pakistan, Sri Lanka, and Maldives
Second Edition - Jan 2017 - China's Challenge to the World Economic Order - Robbie Van Kampen
Now well into the second decade of the 21st century, the world is witnessing the true extent of China’s economic, political, and growing military reach. This reach and integration into the globalized world has been gradual, incremental, and quiet over the past three decades. In the shadows, China has accelerated significantly in the past 10 years. What does this mean for the established global order? This paper is a road map looking to join the dots on that journey.
Diaspora and Economy: Effects of the Global Economic Slowdown on RemittancesVaqar Ahmed
Diaspora and Economy: Effects of the Global Economic Slowdown on Remittances
by
Dr. Vaqar Ahmed
Deputy Executive Director
Sustainable Development Policy Institute
External Reserves and Economic Growth in Nigeriaijtsrd
The study examined the effect of external reserves on economic growth in Nigeria. The study disaggregated external reserve variables into external reserve stock, capital account balance, current account balance and cost of holding reserves. Economic growth was captured as the Gross Domestic Product growth rate. The data were generated from the CBN Statistical Bulletin and World Bank Group World Development Indicators, for a period of 35 years spanning 1987 to 2021. The regression model for the study was analysed using the Autoregressive Distributive Lag, which was found as most suitable using the Augmented Dicker Fuller Unit root tests. The results showed that there is no significant long run relationship between external reserves and economic growth in Nigeria and that the model explained about 71 of the short run factors that impact economic growth within the deregulated Nigeria economy. It was also discovered that economic growth has an endogenous effect on the model of external reserve strategies for economic growth. The regression results for the specific objectives and hypotheses testing revealed that 1 external reserve stock has a significant oscillatory short run effects on economic growth in Nigeria which was positive at lag 2 period and then negative in subsequent lag 3 year 2 capital account balance has a positive but no significant short run effect on economic growth in Nigeria 3 Current account balance has significant and short run positive effect on economic growth in the initial period but no effect in subsequent years and 4 Cost of reserve has significant and positive short run effect on economic growth in Nigeria. The study concluded that external reserves have not been an effective driver of Nigerian economic growth within the deregulated economy era. Based on the findings of the study it was recommended among others that government should increase her external reserve stock to enhance the growth of Nigerian economy, by increasing the export through diversification and exploration of new markets for Nigerian export products. Maryrose Chinyere Oforah | Prof. C. E. Umeora "External Reserves and Economic Growth in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-2 , April 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd55135.pdf Paper URL: https://www.ijtsrd.com.com/management/public-sector-management/55135/external-reserves-and-economic-growth-in-nigeria/maryrose-chinyere-oforah
The study is on the effect of Net capital inflow on inclusive growth in Nigeria. This study seeks to deepen the understanding on how capital inflow creates opportunity for inclusive growth in Nigeria through increase in GDP per capita. The objective of the study were to : determine the effect of Net capital inflow , Net foreign direct investment and trade openness on inclusive growth in Nigeria. The study employed the time series data in its analysis. The period of analysis spanned through 1980-2015 and the dataset required for the analysis were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and National bureau of statistics publications. The study conducted trend analysis, descriptive analysis. The data were also tested for stationarity using the Augmented Dickey Fuller (ADF) unit root test and Ordinary Least Square (OLS) analytical techniques, cointegration test and error correction mechanism. It was evident from the unit root test that the variables were fractionally integrated while the cointegration test reveals that long run relationship exists among the variables. The findings equally reveal that capital inflow exerts significant negative influence on GDP per capita. This could be attributed to the problem of managing external capital flows which has been sub-optimal in most developing economies including Nigeria. The implication of this finding is that the perceived benefits that are associated with capital inflows tend not to hold sway in Nigeria over the sampled period which may be attributed to institutional and governance failure. Owing to the findings, this study recommends for the adoption of investment friendly policies and ensure transparency and good governance, appropriate economic management practices capable of supporting reforms in the Nigerian financial system and guide international capital inflows to ensure that the associated economic turnarounds are people-centered.
Foreign capital flows depends on the prevailing monetary forces as supported by capital flows
theory and the mechanism linking these two variables is that contraction of net domestic assets through an
open market sale of bonds will place upward pressure on domestic interest rates. Higher interest rates attract
foreign funds, generating a capital inflow which relieves the pressure on domestic interest rates. Has this
actually happened? It is against this backdrop that the present study investigated the impact of monetary policy
on international capital inflows in Nigeria for a period of 22 years (1994-2015) using time series data. The
autoregressive distributed lag technique revealed that the short-run and long-run significant determinants of
foreign capital inflows are largely from broad money supply, nominal exchange rate, inflation rate and interest
rates spread except inflation rate that is insignificant in the long-run. This outcome upholds theoretical
prediction. Long-run equilibrium relationship was found between the dependent variable and the regressors.
Further examination of the short run dynamics of the model showed that the speed of adjustment coefficients
ECM (-1) to restore equilibrium have a negative sign and statistically significant at 1% level, ensuring that
long-run equilibrium can be attained and about 89% of the short-run deviation from the equilibrium (long-run)
position is corrected annually to maintain the equilibrium. Since the empirical evidence revealed that monetary
aggregates such as broad money supply, nominal exchange rate, inflation rate and interest rates spread
influence foreign capital inflows, it is therefore recommended that government should continue to pursue
expansionary monetary policy and foreign exchange policies that would ensure competitiveness of the
economy in order to attract the much needed foreign capital inflows that would engender economic growth.
arifanee.com is world's leading website on the hottest financial news, perspectives and behind the scenes stories. arifanees.com brings you insight and information to inspire and transform your paradigm by enriching your with the best of facts and the vision.
arifanees.com
Information-Inspiration-Transformation
Human resource development and foreign remittances : The case of South Asia. The paper explains links between HRD, migration and remittances in Afghanistan, Bangladesh, Bhutan, Nepal, India, Pakistan, Sri Lanka, and Maldives
Second Edition - Jan 2017 - China's Challenge to the World Economic Order - Robbie Van Kampen
Now well into the second decade of the 21st century, the world is witnessing the true extent of China’s economic, political, and growing military reach. This reach and integration into the globalized world has been gradual, incremental, and quiet over the past three decades. In the shadows, China has accelerated significantly in the past 10 years. What does this mean for the established global order? This paper is a road map looking to join the dots on that journey.
Diaspora and Economy: Effects of the Global Economic Slowdown on RemittancesVaqar Ahmed
Diaspora and Economy: Effects of the Global Economic Slowdown on Remittances
by
Dr. Vaqar Ahmed
Deputy Executive Director
Sustainable Development Policy Institute
External Reserves and Economic Growth in Nigeriaijtsrd
The study examined the effect of external reserves on economic growth in Nigeria. The study disaggregated external reserve variables into external reserve stock, capital account balance, current account balance and cost of holding reserves. Economic growth was captured as the Gross Domestic Product growth rate. The data were generated from the CBN Statistical Bulletin and World Bank Group World Development Indicators, for a period of 35 years spanning 1987 to 2021. The regression model for the study was analysed using the Autoregressive Distributive Lag, which was found as most suitable using the Augmented Dicker Fuller Unit root tests. The results showed that there is no significant long run relationship between external reserves and economic growth in Nigeria and that the model explained about 71 of the short run factors that impact economic growth within the deregulated Nigeria economy. It was also discovered that economic growth has an endogenous effect on the model of external reserve strategies for economic growth. The regression results for the specific objectives and hypotheses testing revealed that 1 external reserve stock has a significant oscillatory short run effects on economic growth in Nigeria which was positive at lag 2 period and then negative in subsequent lag 3 year 2 capital account balance has a positive but no significant short run effect on economic growth in Nigeria 3 Current account balance has significant and short run positive effect on economic growth in the initial period but no effect in subsequent years and 4 Cost of reserve has significant and positive short run effect on economic growth in Nigeria. The study concluded that external reserves have not been an effective driver of Nigerian economic growth within the deregulated economy era. Based on the findings of the study it was recommended among others that government should increase her external reserve stock to enhance the growth of Nigerian economy, by increasing the export through diversification and exploration of new markets for Nigerian export products. Maryrose Chinyere Oforah | Prof. C. E. Umeora "External Reserves and Economic Growth in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-2 , April 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd55135.pdf Paper URL: https://www.ijtsrd.com.com/management/public-sector-management/55135/external-reserves-and-economic-growth-in-nigeria/maryrose-chinyere-oforah
The study is on the effect of Net capital inflow on inclusive growth in Nigeria. This study seeks to deepen the understanding on how capital inflow creates opportunity for inclusive growth in Nigeria through increase in GDP per capita. The objective of the study were to : determine the effect of Net capital inflow , Net foreign direct investment and trade openness on inclusive growth in Nigeria. The study employed the time series data in its analysis. The period of analysis spanned through 1980-2015 and the dataset required for the analysis were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and National bureau of statistics publications. The study conducted trend analysis, descriptive analysis. The data were also tested for stationarity using the Augmented Dickey Fuller (ADF) unit root test and Ordinary Least Square (OLS) analytical techniques, cointegration test and error correction mechanism. It was evident from the unit root test that the variables were fractionally integrated while the cointegration test reveals that long run relationship exists among the variables. The findings equally reveal that capital inflow exerts significant negative influence on GDP per capita. This could be attributed to the problem of managing external capital flows which has been sub-optimal in most developing economies including Nigeria. The implication of this finding is that the perceived benefits that are associated with capital inflows tend not to hold sway in Nigeria over the sampled period which may be attributed to institutional and governance failure. Owing to the findings, this study recommends for the adoption of investment friendly policies and ensure transparency and good governance, appropriate economic management practices capable of supporting reforms in the Nigerian financial system and guide international capital inflows to ensure that the associated economic turnarounds are people-centered.
Monetary Policy and Trade Balance in NigeriaYogeshIJTSRD
Nigeria apex bank Central Bank of Nigeria CBN has continued to battle with the job of reviving the ailing economy and putting it on the path of growth. The economy has witnessed unprecedented job loss, rising poverty level, accelerating inflation, sluggish economic growth and disequilibrium in the balance of trade. The study therefore examine the effect of monetary policy on trade balance in Nigeria. Specifically the study ascertained the extent to which inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria using an econometric regression model of the Ordinary Least Square OLS . From the result of the OLS, it is observed that monetary policy rate, demand deposit, liquidity ratio and exchange rate have a significant positive impact on foreign trade in Nigeria. This means that increases in monetary policy rate, demand deposit, liquidity ratio and exchange rate, will lead to increase in foreign trade in Nigeria. On the other, inflation rate and interest rate has a significant negative impact on foreign trade in Nigeria, meaning that as inflation rate and interest rate increases, will be bring about a decline in foreign trade in Nigeria. Based on the findings of this study, the study recommends that the government should employ a contractionary monetary policy to fight inflation by reducing the money supply in the country through decreased bond price. inflation, demand deposit, liquidity ratio, exchange rate and interest rate have influenced trade balance in Nigeria. The government should intervene in the foreign exchange market in order to build reserves for themselves or provide them to the bank to help stabilize the exchange rate. The government should strive to improve trade performance in the short and long run. They should also reduce government spending and tax capital inflow. Edokobi, Tonna David | Okpala, Ngozi Eugenia | Okoye, Nonso John "Monetary Policy and Trade Balance in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-5 , August 2021, URL: https://www.ijtsrd.com/papers/ijtsrd45080.pdf Paper URL: https://www.ijtsrd.com/management/public-sector-management/45080/monetary-policy-and-trade-balance-in-nigeria/edokobi-tonna-david
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how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
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USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
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What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
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US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
1.[1 9]external reserves management and economic development in nigeria (1980-2008)
1. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 3, No.11, 2011
External Reserves Management and Economic Development in
Nigeria (1980-2008)
Alasan AbdulazeezB (Corresponding Author)
Dept. of Humanities and Social Sciences,
School of General Studies,
Federal Polytechnic, Auchi, P.M.B 13, Nigeria.
Tel: +2348038679900 E-mail: alasanbabdulazeez@yahoo.com
Shaib Ismail Omade
Dep. of Statistics,
School of Information and Communication Technology,
Federal Polytechnic, Auchi, P.M.B 13, Nigeria.
Tel: +2347032808765 E-mail: shaibismail@yahoo.com
Abstract
External reserves which are variously called International Reserves, Foreign Reserve or Foreign Exchange
Reserves. In recent years, issues related to the management of external reserves have gained prominence, and
reserves management practices have evolved rapidly. Effective management of foreign exchange reserves is one
of the major macroeconomic objectives of countries like Nigeria. This is against the background of rapid rise
and accumulated challenges currently facing many emerging economics, especially oil producing countries
(CBN 2007). This paper examined the management of external reserves and economic development in Nigeria
between1980-2008.The empirical result of the data analysis revealed that there is statistical significant
relationship in the management of Nigerian external reserves. Hence, the need for an effective and efficient
management of Nigeria’s external reserves is imperative and recommended that reserve management should
seek to ensure that adequate reserves are available such that risks are controlled in a prudent manner and
reasonable earnings are generated over the medium to long term on the funds invested.
Keywords: External Reserves, Management, relationship, CBN, Macroeconomic variables
1.0 Introduction
In recent years, issues related to the management of external reserves have gained prominence, and reserves
management practices have evolved rapidly. Effective management of foreign exchange reserves is one of the
major macroeconomic objectives of countries like Nigeria. This is against the background of rapid rise and
accumulated challenges currently facing many emerging economics, especially oil producing countries (CBN
2007).
External reserves are variously called International Reserves, Foreign Reserve or Foreign Exchange
Reserves. While there are several definitions of international reserves, the most widely accepted is the one
proposed by the IMF in its Balance of Payments Manual, 5th edition. It defined international reserves as
consisting of official public sector foreign assets that are readily available to, and controlled by the monetary
authorities for direct financing of payment imbalances, and directly regulating the magnitude of such
imbalances, through intervention in the exchange markets to affect the currency exchange rate and/or for other
purposes (CBN 2007).
The level of external reserve in a country is influenced by external sector developments such as
international trade transactions, exchange rate, external debt and other related external obligations. However,
when foreign reserves are used for financing domestic foreign exchange needs they could exert pressures on the
internal monetary environment. Thus, if a country’s trade volume increases, banks and other financial
intermediaries may exert increasing pressure on her foreign reserves. This scenario calls for a continuous effort
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by a country at effectively managing her foreign reserves to an optimum level that would sustain her numerous
external commitments (CBN 1997).
Foreign reserves management is the technique of optimizing a nation’s external resources to meet its
economic needs. In Nigeria, the Central Bank has the sole responsibility of management of foreign reserves. The
components of foreign reserves include monetary gold, reserve position at the International Monetary Fund
(IMF), holding of special drawing right (SDRs) and foreign exchange which are convertible currencies of other
countries (CBN 1997).
2.0 Review of Related Literatures
Aluko (2007), observed that External reserves has, in recent times, played significant role in the
Nigeria economy. It has increased the level of money supply and therefore impact positively on the level of
economic activities as more funds became available for investment in productive activities. Employment was in
turn generated, output increased and consumption boosted. With their multiplier effects on the economy coupled
with the efficient management of the financial resources, standard of living of the people improved
considerably. Also, the contribution of the manufacturing sector to Gross Domestic Product (GDP), which has
continued to dip, witnessed a boost.
In a related study (Obaseki 2007) noted that the uses of external reserves cannot be over emphasized.
Essentially, external obligations have to be settled in foreign exchange. Therefore, the stocks of reserves become
important as a source of financing external imbalances. Other uses to which external reserves can be put are to
intervene in the foreign exchange market, guide against unforeseen volatility and maintain natural wealth for
future generations.
Typically, the purpose of holding reserves is to allow the central bank an additional means to stabilize
the issued currencies from shocks. In addition to meeting the transaction needs of countries, reserves are used as
a precautionary purpose to provide a cushion to absorb unexpected shocks or a sharp deterioration in their terms
of trade or to meet unexpected capital outflows, like the negotiated exit payment of the Paris Club Debt by
Nigeria. Reserves are also used to manage the exchange rate through intervention in the foreign exchange
market. Thus, the motives for holding adequate level of external reserves can therefore be summarized as the
reasons why individuals hold money (CBN 2007).
Sound foreign reserves management practices are important because they can increase a country’s
overall resilience to shocks as the central bank will have the ability to respond effectively to financial crisis.
Sound foreign reserves management can equally support but not substitute for sound macroeconomic
management. Similarly, inappropriate economic policies can pose serious risks to the ability to manage foreign
reserves. However, the process of foreign reserves management has spanned over the areas of risk management,
securitization and the use of derivatives (Anifowose 1997).
External reserves have impacted significantly on the development of Nigeria economy over the years.
According to (Ojokwu 2007), Foreign Direct Investment (FDI) into the country increased from $42.4 million in
1997 to $540.17 million in 2002 at an exchange of ₦118 to a dollar, while the level of investment increased in
1999 from ₦4.24 billion to ₦63.74 billion in 2002. He added that employment increased from 4,093 in 1999 to
10,885 in 2002, while revenue allocation to States and Local Government Areas grew from ₦156.06 billion in
1999 to ₦44.074 billion at August 2004. The Federal Government has also made significant progress in the war
against corruption. All these are indicative of progress economically.
2.1 Concept of External Reserves
Prior to the inception of the Central Bank of Nigeria in 1959, the country formed part of the defunct
West African Currency Board (WACB). In that period, management of external reserves posed little or no
problems to the country because the manner in which the Board operated prevented such problems from arising.
Optimal deployment of reserves then was really not an issue since Nigeria’s non-sterling earnings were
deposited in London in exchange for credit entries in the sterling accounts maintained there (Aizenman 2005).
Subsequently, the 1959 Act which established the Central Bank of Nigeria (CBN) required the Bank to
hold external reserves solely in Gold and Sterling. With the amendment in 1962 of this Act, the Bank acquired
the mandate to maintain the country’s foreign exchange reserves not only in sterling balance but also in non-
sterling assets such as gold coin or bullion, bank balances, bills of exchange, government and government-
guaranteed securities of countries other than Britain and treasury bills in other countries. The monetary options
available to the country widened upon joining the International Monetary Fund (IMF) in 1961 to include many
more assets (Yuguda 2003).
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The problems of reserve management began during the periods of the First National Development Plan
in 1962 to 1966 and the Nigerian Civil War of 1967 to 1970. In these periods, financing the plan and the war
consumed a large portion of the country’s reserves. Also, the tempo in the foreign trade sector dropped,
following the disruption of economic activities in the country. The problems became compounded immediately
after the war in the wake of the Federal Government’s efforts to reconstruct and reactivate the war ravaged
economy which continued to demand immense foreign exchange reserves. Because of the exigencies of this
period, the CBN became committed to maintaining an ‘adequate’ level of external reserves (Olawoyin 2005).
In a related development, (Odozi 2000) noted that in addition to the problem of depleting reserves;
Nigeria faced a new scenario with reserve management. Following the admission into the organisation of
Petroleum Exporting Countries (OPEC) in 1973 and the oil boom of the era, the problem of reserve
management switched from that of ‘inadequate’ to that of ‘excess reserves’. This remained so until 1981 when
the country was hit by the global economic recession that led to a consistent decline in her external reserves. In
the light of this development, economic stabilisation measures revolving stringent exchange control, which ran
from April 1982 to June, 1986 (when accretion to external reserves was low), were introduced. By the end of
1985, it was evident that the use of stringent economic controls was ineffective in restraining external reserves
depletion. To this end, exchange and trade controls were discontinued in 1986, following the adoption of market
based policy measures, the Structural Adjustment Programme (SAP) in July 1986. However, after more than
seven years of liberation, government felt that the overall performance of the economy was unsatisfactory.
Hence, in January 1994, some measures of control were re-introduced which saw the CBN as the sole custodian
of foreign exchange and together with its designated agents, the avenues for foreign exchange important. Again
the trade and exchange policies in 1994 failed to substantially achieve the desired objectives. The guided
deregulation introduced in 1995, among other things, abolished the 1962 Exchange Control Act, in a bid to
enhance the flow of capital and the reserves position of the country. Other measures aimed at boosting the
external reserves included the introduction of an Autonomous Foreign Exchange Market (AFEM) for the
purpose of trading in foreign currencies at market determined rates and further liberation of the foreign
exchange system in 1997 and the trade and exchange regime in 1998.
The scope of this study covers external reserves management and its effects on economic development
in Nigeria between the periods of 1980 – 2009. The study also looked into the problems associated with foreign
reserves management as well as its relationship with gross domestic product (GDP). The other area covered is
how best external reserves can be prudently managed for the overall benefit of Nigeria. The research was
concluded with a theoretical framework adopted for the study.
2.3 Sources of Nigeria External Reserves Inflows
Nigeria’s external reserves derive mainly from the proceeds of crude oil production and sales. Nigeria
produces approximately 2,000,000 barrels per day of crude oil in joint venture with some international oil
companies, notably Shell, Mobil, and Chevron. Out of this, Nigeria sells a predetermined proportion directly,
while the joint venture partners sell the rest. The joint venture partners pay Petroleum Profit Tax to the Federal
Government through the Federal Board of Inland Revenue (CBN 2007).
The five categories of revenue from crude oil production and sales are:
i) Sale of Nigeria’s Crude Oil Equity: The Nigerian National Petroleum Corporation (NNPC) has the
responsibility for the sale of Nigeria’s crude oil. Receipts from such sales are warehoused into our
foreign accounts and constitute part of external reserves.
ii) Royalties: These are funds paid by oil companies to the nation arising from the commercial
exploitation of Nigeria’s oil resources. The Petroleum Act of 1969 provides a percentage to be paid as
loyalty on the chargeable value of the crude oil/petroleum spirit production in a particular period.
iii) Petroleum Profit Tax (PPT): This is the tax paid by oil companies on profit arising from their
operations. A tax rate of 85% effective 1st April 1975 was specified by the Petroleum Profits Tax Act.
iv) Penalty for Gas Flaring, Rentals, Signature Bonuses: Foreign exchange is realized from penalties for
gas flaring, rental payments from Oil Prospecting License (OPL), conversion to oil mining lease, oil
exploration license, and concession block allocation. Also signature bonus (an amount payable at the
signing of an agreement for the award of OPL as part of the validity process of oil contract agreement)
is a source of foreign exchange.
v) Receipt from Gas Sales: Other sources of foreign exchange inflows include: Withholding Tax, Value
Added Tax, Company Income Tax, Education Tax, and Rent/interests received from investments
abroad personal home remittances.
vi) Export products from non oil sources agricultural produce, processed and semi-processed products, etc.
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vii) Grants and other miscellaneous receipts (CBN, 2007). In Nigeria, over 85 percent of foreign exchange
reserves is realized from the oil sector.
3.0 Statement of Research Problem
The importance of external reserves to any country cannot be overemphasized. It can be said to be the official
public sector foreign assets controlled by the central bank of a country. The reserve position of Nigeria at any
given time is a reflection of the circumstances prevailing in the international oil market (George 2007). The size
of Nigeria’s external reserves has been fluctuating over the years. The stock of reserves which was US$7.47
billion at end of December 2003, increased by 127 percent to US$16.96 billion in 2004. It could finance 18.4
months of imports. The import cover was much higher than the West Africa Monetary Zone (WAMZ) minimum
requirement of 6 months. See chart and table as appendage:
From the foregoing, the researcher is of the opinion that external reserves generally have focused mainly on the
concept, nature, sources, size, the foreign exchange disbursement and months such reserves could finance
importation. Against this backdrop, this work sees the following as constituting the major statement of problem
for this study.
i. The non-utilization of Nigeria’s huge external reserves for the development of infrastructure/social
services
ii. The poor management of the reserves which has, to a large extent affected the growth of the economy.
4.0 Objectives of the Study
The broad objective of this study is to examine the effects of external reserves management on
economic development in Nigeria.
The specific objectives are:
i. To examine the relationship between external reserves and the explanatory variables.
ii. To also examine the extent to which external reserves account for financial stability.
5.0 Hypotheses of the Study
In pursuance of the set objectives of this study, the following hypotheses were drawn for testing, where
economic development is the dependent variable.
i. There is no significant relationship between external reserves and the explanatory variables (Gross
domestic product, export oil, non-oil, import oil, non-import oil and political stability).
ii. There is no significant relationship between external reserves and financial stability.
6.0 Relevance of the Study
The importance of the study cannot be over-emphasized. It is believed that this study will provide an
appropriate framework for the analysis of foreign reserves management and its effects on economic
development. Such a framework will help identify the key variables of foreign reserves management and its
effects on the economy.
7.0 Model Specification
The study adopted the econometric model in evaluating the role of external reserves in the Nigeria
economy. The econometric model used was to determine the relationship between external reserves and selected
macroeconomic variables (gross domestic product, GDP, export oil, non-export oil, non-import oil, capital
goods, non-capital goods and political stability) towards adopting a policy option.
Evans and Egwakhe (2008) observed that external reserves were held with a view to making the
economy more attractive to foreign investment, which would, in turn, improve the economic performance of the
nation. Hence the expectation that external reserve has a relationship with the level of economic productivity
captured by GDP and other variables.
In their empirical investigation of the role of external reserves on the Nigerian economy, Evans and
Egwakhe (2008), used the Ordinary Least Square (OLS) technique and adopted a model of the form:
Ln(Ri ) = a0 + a1Ln(Ei ) + a2 (I i ) + ei (1)
Where :
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Ln represents natural log transformation, i is time lag, R is ratio of external reserve to GDP, E is ratio of
exports to GDP,I is ratio of imports to GDP, ei is error term and as are parameters.
Following the model of Evans and Egwakhe (2008), the researcher adopted their formulation with a
little modification. That is, export was divided into oil export and non-oil export because they are the major
components of export. Oil export constitutes about 90 percent and the other 10 percent is non-oil export. In the
modification, import was also broken into two, that is, capital goods and non-capital goods because these are
also the major components of import. In addition to the modification of Evans and Egwakhe (2008), GDP was
included because it captures the level of economic activity. A dummy variable was also introduced as a proxy
for political stability. It takes the values of O for stability and 1 for instability.
7.1 Variable Descriptions
The data collected are within a time frame of 1980 and 2009. It includes the following variables:
EXTR – External Reserves, GDP – Gross Domestic Product, EXOIL – Export Oil, NEOIL – Non-Export Oil,
NOILMP – Non-Oil Import, CPG – Capital Goods, NCPG – Non-Capital Goods, POLST – Political Stability.
7.2 Model Specification and Adoption
One model was adopted in this study. That is,
EXTR = f (GDP, EXOIL, NEOIL, NOILMP, CPG, NCPG, POLST)
The model was adopted based on the formulation of Evans and Egwakhe (2008) and operationalized as:
EXTR = βo + β1 GDP + β2 EXOIL + β3 NEOIL + β4 NOILMP + β5 CPG + β6 NCPG + β7 POLST + U
8.0 Research Methodology
This chapter specifically deals with the technique of enquiry underlying the study. Attention has been focused
on source of data, model formulation and method of data analysis.
8.1 Source of Data Collection
The data used in this study were mainly secondary data. They covered the period of (1986 – 2009) and
were obtained from various sources, notably the Central Bank of Nigeria (CBN) annual reports (2007, 2008 and
2009), CBN statistical bulletin (2008, 2009 and 2010) and economic journals. Others were obtained from
textbooks and the internet.
8.2 Data Analysis Techniques
The technique used in this study is the Ordinary Least Square (OLS) estimation technique. The test instruments
in the OLS are the T-statistics and F-test which were used to test the significance of variables and the overall
significance of the regression respectively. Other test instruments also employed were the Durbin Watson test
which was used to test the presence or absence of auto correlation between and among the explanatory variables
and the adjusted R square used to test the percentage variation of the dependent and the independent variables.
8.3 Result of Empirical Analysis
The estimate of the model
EXTR = 917401.8+0.661458GDP+0.202 EXOIL– 36.00NEOIL -0.012NOILIMP +141.67CPG – 500.6398
NCPG – 9562011.POLST (2)
From the OLS result, R2 = 0.66 which shows that there is high positive correlation among the variables at
66.1%. The adjusted R-squared = 0.548 implies that the co-efficient of determination indicated that the degree
of analysis is accurate and the independent variables (GDP, EXOIL, NEOIL, NOILIMP, CPG, NCPG, and
POLST) are capable of explaining the dependent variable (EXTR) by 54.8%, while 45.2% of the explanatory
variable is captured or accounted for by error and other factors. The result of Durbin Watson (2.6065) revealed
that there is no presence of serial autocorrelation, which means the model is good for policy evaluation. The
individual analysis of the variables shows that the coefficient of β1 is 0.6615 which implies a positive
relationship between the regressor variable, gross domestic variable, and the dependent variable, external
reserves. It further implies that a unit change in gross domestic product brought about a 0.6615 change in
external reserves.
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The estimate of β2 is 0.20222. As expected, it shows a direct relationship between export oil and external
reserves such that unit change in export oil resulted in 0.2022 changes in external reserves. -36.0074 is the
estimated value of β3 which shows a negative relationship between non-oil export and external reserves. The
implication is that a unit change in non-oil export resulted in a -36.0074 variation in external reserves. The
estimate of β4 is -0.0126 which also signals an inverse relationship between non import and external reserves.
What this signifies is that a -0.0126 change occurred as a result of a unit change in non-oil import. For β5,
141.6775 is estimated value. This shows a positive relationship between capital goods and external reserves.
Impliedly, a unit change in capital goods resulted in a 141.6775 variation in external reserves. The coefficient
of β6 is -500.6398. It demonstrates a negative relationship between non capital goods and external reserves. This
further means that a change in non-capital goods brought about a negative change of -500.6398 in external
reserves. For β7, -956201.1 is the coefficient. This shows an inverse relation between political stability and
external reserves. Impliedly, a unit change in political stability resulted in a -956201.1 change in external
reserves.
The values of t-ratio for β1, β2, β3, β4, β5, β6 and β7 are 0.644, 0.145, -0.962, -0.036, 0.092, -0.349, and -0.770
respectively, while that of the statistical table at 5% level of significance is 2.056. Since the value of the T-ratio
from the statistical table is greater than that which was calculated, it means that the estimates of β1 - β7 are
statistically significant. We therefore reject Ho: β1 = 0, β2 = 0, β3 = 0, β4 = o, β5 = 0 β6 = 0, β7 = 0 and accept H1 :
β1 ≠ 0, β2 ≠ 0, β3 ≠ 0, β4 ≠ o, β5 ≠ 0 β6 ≠ 0 and β7 ≠ 0.
9.0 The summary of findings is as follows:
i) The empirical analysis shows a positive relationship between external reserves and some explanatory
variables. The variables include gross domestic product, export oil, and capital goods. These account
for 54.8% variation in external reserves.
ii) The study has also shown that a negative relationship exist between external reserves and non-oil
export, non-capital goods, non-import, and political stability.
iii) External reserve was also found to be negatively related to macroeconomic stability, hence the non-
utilization of this reserve to provide social services and infrastructure.
10.0 Recommendations
The study has shown that there is a positive correlation between external reserves and the growth rate of GDP,
EXOIL and CPG. It is therefore important for appropriate policy formulation and implementation of such
policies to encourage and boost the growth rate of these variables.
Since there is a direct relationship between external reserves and GDP, the need to diversify the economic base
and encourage agriculture becomes instructive. With this, our non oil export will be increased. This is because if
we encourage agricultural production, it will not only guarantee food security, increase the nation’s GDP and
foreign earnings, but it will generate employment and incomes thereby increasing the standard of living of the
average Nigerian. If agriculture is encouraged, it will also act as a buffer to cushion shocks arising from the
volatility as well as the instability in the international oil market.
From the empirical analysis, it was also observed that a positive relation exist between external reserves and
EXOIL. It follows therefore that the downstream oil sector needs to be encouraged. To do this end, government
should provide an enabling environment such that the mutilnationals are protected and youth restiveness in the
Niger Delta nipped in the bud permanently.
Against the general consensus that a stable political climate encourages both local and foreign investment, our
empirical result deviated from this by showing a negative relationship between political stability and external
reserves. It is against the backdrop of this scenario that the researcher is of the opinion that our democracy
should be practiced according to the rules and cost of governance drastically reduced.
Also, government should encourage and partner with the private sector. Such public/private sector partnership
will reduce the unemployment scourge and consequently relax the political tension that has continuously
characterized the political in recent times.
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Furthermore, there should be deliberate and systematic effort to use part of the reserves for infrastructural
development and save part of it for future generation as oil, which is the main source of this reserve
accumulation is a wasting asset. This can be given impetus through an appropriate constitutional provision.
11.0 Conclusion
Over the years, the Nigerian economy has witnessed a lot of socio-economic and political challenges.
These challenges notwithstanding, it is the researchers’ opinion that with determination and sincerity of purpose,
we shall actualize the desired economic growth and development. The challenges may be daunting, but we have
all it takes to face them squarely. In conclusion, the need for an effective and efficient management of Nigeria’s
external reserves is imperative. This is because poor management of external reserves may put at risk other
elements or components of national policy. For instance, an official exchange rate policy can cause severe
economic damage. Hence, reserve management should seek to ensure that adequate reserves are available such
that risks are controlled in a prudent manner and reasonable earnings are generated over the medium to long
term on the funds invested.
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Vol 3, No.11, 2011
Appendix
Fig. 1 Nigeria’s Stock of External Reserves Position (US$ Billion)
60 30
External Reserves (US$ Billion)
50 25
40 20
30 15
Months of Imports
20 10
10 5
0 0
1992 1993 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
2007 2008
Source: CBN Annual Report and Statement of Accounts (1997 – 2008) editions and CBN Statistical Bulletin,
Vol. 16, Dec. 2008.
Table1:
Recent Trends in Nigeria’s External Reserves (1992 – 2008)
Year Stock of Percentage Months of External debt Ratio of
External change in imports cover stock (US$ reserves/stock
Reserves (US$ stock of Billion) of external
Billion) reserves debts
1992 0.70 *** *** *** ***
1993 1.30 85.71 *** *** ***
1994 1.70 30.77 3.00 29.43 0.06
1995 1.40 -17.65 2.10 32.58 0.04
1996 4.10 192.90 7.60 28.06 0.15
1997 7.58 84.90 9.60 27.09 0.28
1998 7.10 -6.30 9.20 28.91 0.25
1999 5.50 -22.50 7.60 28.07 0.20
2000 9.90 80.00 13.60 28.27 0.35
Source: CBN Annual Report and Statement of Accounts (1997 – 2008) editions and CBN Statistical Bulletin,
Vol. 16, Dec. 2008.
*** Not available .
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Table2: Result of Empirical Analysis
The model specified in the study was estimated using the ordinary least square regression technique.
The result obtained is summarized below:
Regression Result of Model
Variables Coefficient Standard Error T=Statistics Prob.
GDP 0.661458 1.026505 0.644379 0.5263
EXOIL 0.202154 1.391980 0.145228 0.8859
NEOIL -36.00743 37.42813 -0.962042 0.3470
NOILIMP -0.012592 0.351806 -0.035793 0.9718
CPG 141.6775 1541.058 0.091935 0.9276
NCPG -500.6398 1432.677 -0.349444 0.7302
POLST -956201.1 1240965 -0.770530 0.4496
C 917401.8 1149267 0.798249 0.4337
R2 0.6612, R-2 0.5483, F-stat 5.8549, DW Stat. 2.6066
Source: SPSS Result Output
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