Adeyemi Adefioye Ogundipe

Oil Price and Exchange Rate Volatility in Nigeria

Nigeria being a mono-product economy, where the main export commodity is crude oil, changes in oil prices has implications for the Nigerian economy and, in particular, exchange rate movements. The latter is mostly important due to the double dilemma of being an oil exporting and oil-importing country, a situation that emerged in the last decade. The study examined the effects of oil price, external reserves and interest rate on exchange rate volatility in Nigeria using annual data covering the period 1970 to 2011. The theoretical framework of this study is based on Generalized Autoregressive Conditional Heteroskedasity modeled by Tim Bolerslev (1986) and Exponential General Autoregressive Conditional heteroskedastic modeled by Daniel Nelson (1991). These models were used to estimate the relationship between oil price changes and exchange rate. Relevant descriptive and econometric analyses were employed. The econometric tests adopted include the unit root tests, Johansen co-integration technique and the Vector Error Correction Model (VECM); the time series property examined shows that all the variables were stationary at first difference. The long run relationship among the variables was determined using the Johansen Co-integration technique while the vector correction mechanism was used to examine the speed of adjustment of the variables from the short run dynamics to the long run. It was observed that a proportionate change in oil price leads to a more than proportionate change in exchange rate volatility in Nigeria; which implies that exchange rate is susceptible to changes in oil price. The study therefore recommend that the Nigeria government should diversify from the Oil sector to other sectors of the economy so that Crude oil will no longer be the mainstay of the economy and frequent changes in crude oil price will not influence exchange rate volatility significantly in Nigeria.

Fuel Subsidy Reform and Environmental Quality in Nigeria

The study examines the existence of a long run effect of fuel subsidy reform on environmental quality in Nigeria for the period of 1970-2012 using the Johansen and the Engle–Granger two step co-integration procedure techniques. The study developed a three case scenarios including: (i) A case of subsidy payment, (ii) a case of effective subsidy and, (iii) a case of no subsidy payment. Findings from the study supported evidence of a long run sustainable equilibrium model. Also, our estimation results showed that the first and the last case scenario do not significantly influence environmental quality. This implies that subsidy payment in Nigeria does not enhance access and consumption of liquid fuel. On the other hand, the interaction of sound regulatory framework with subsidy payment (the case of effective subsidy) significantly exerts a responsive influence on environmental quality.

Foreign Aid, Institutions and Economic Development in West Africa: Implications for Post-2015 Development Agenda

This paper examines the relationship between foreign aid and income per capita using a simple augmentation of the neoclassical cross-country specification for Western Africa states. The study disaggregated aid into seven categories (agriculture, communication, industrial, engineering, education, health and food security) and shown that in most cases, aid becomes significant when conditioned on sound macroeconomic policy whereas institutional quality and infrastructural development do not significantly influence the aid-growth relation. Similarly, the study established a decreasing return to aid, as the marginal impact of aid on growth appears negligible in all likelihood. Likewise, trade structure and financial depth do not meaningfully enhance economic development in the region. We conclude by stressing the need to develop absorptive capacity, ensure sound pro-development policies and urge donors to systematically link aid to performance.

Electricity Consumption and Economic Development in Nigeria

The study examines the relationship between electricity consumption and economic development using an extended neoclassical model for the period 1970-2013. The study incorporates the uniqueness of the Nigerian economy by controlling for the role of institutions, technology, emissions, and economic structure in the electricity consumption-development argument. The study adopted a cointegration analysis based on the Johansen and Juselius (1981) maximum Likelihood approach and a vector error correction model. In order to ensure robustness, the study adopted the wald block endogeneity causality test to ascertain the direction of causal relationship between electricity consumption and economic development. The study found an existence of long-run cointegration equation with electricity consumption inversely related to economic development. Likewise, the vector error correction model failed to reject the null hypothesis of non-convergence in the long-run. Finally, the study found evidence supporting unidirectional causal relationship running from economic development to electricity consumption

Foreign Direct Investment and Economic Growth in ECOWAS: A System-GMM Approach

The paper investigates the relationship between foreign direct investment and economic growth in ECOWAS using the System-GMM panel estimation technique covering the period 1970-2011.The study adopted System-GMM in order to overcome the weaknesses perceived in the empirical works of earlier studies; majority of these studies failed to control for the presumed challenges of endogeneity inherent in the FDI-Growth argument. The study likewise interacted human capital and institutions indicators with other explanatory variables in explaining the variability of FDI. The results of the System-GMM appears contrary to earlier studies, as the contribution of FDI was insignificant and impacts negatively on growth in ECOWAS despite the controlling for the role of human capital and quality of institutions in the model. Following this outcome, policy makers in developing Africa needs to exercise cautions in adopting the recommendation from earlier studies; most of which advocates more openness, human capital development and the strengthening of institutions. This might not be completely helpful considering the pattern of FDI inflow into ECOWAS, which is absolutely resource- seeking. There is need to curtail excessive openness in the extractive industries, encouraging more manufacturing FDI and domestic investment of repatriated capital by ensuring more economic stability and raising domestic interest rate.

Impact of Agricultural innovation on improved livelihood and productivity outcomes among smallholder farmers in Rural Nigeria

Agricultural research programs that are driven by Agricultural Innovation System concepts usually target to change the way in which low income rural agrarian households in a nation like Nigeria communicate with the market and the decision making strategies pertaining to development of their agri-business and the scarce resources which are at their disposal. As a result there has been a shift in the research paradigm in many African countries like Nigeria; from top down research systems to nonlinear dynamic systems that aim to enhance end users capacity to obtain and utilize knowledge and research outputs. The aim of this paper was therefore to assess the extent to which the use of these innovative agricultural research interventions impact upon the livelihood and productivity outcomes of rural smallholder farmers in Nigeria using a case study from the South west region of Nigeria. Using propensity score matching as a means of establishing a valid counterfactual and single differencing to measure impact, the study establishes that rural incomes and output are significantly impacted upon by agricultural research interventions that are driven by agricultural innovation systems concepts. The study however further finds that although participating households had better livelihood and productivity outcomes and more diversified income portfolios during the implementation of the innovative research intervention as a result of greater linkages to markets and capacity building opportunities; phasing out of the research program reduced the diversity of income portfolios and lead to the erosion of livelihoods. The study therefore concluded that agricultural research interventions that are driven by agricultural innovation system concepts have the potential to positively impact upon the livelihood outcomes of rural smallholder farmers in Nigeria however there is need for greater capacity building of local extension agents and increased budgetary support to ensure understanding and application of agricultural innovation system concepts by local level public agricultural extension agents to sustain positive livelihood and productivity outcomes. In addition agricultural innovation system concepts should be mainstreamed in all public agricultural extension and research programs to ensure sustained rural innovation and robust livelihood and improved productivity outcomes.

Does Foreign Land Acquisition Deprive Per Capita Income in Africa

This study investigates the implications of large scale foreign land acquisitions on per capita income in Africa. It employs data from World Development Indicators, World Governance Indicators and World Trade Indicators on key variables such as arable land per person, agricultural land as percentage of land area, net food import, regulatory quality, among others (1995-2012) on selected African countries where instances of foreign land deals have been reported. The study formulates empirical models that draw from institutional development theory, which was estimated using Fixed Effects (FE) and Generalised Method of Moments (GMM) techniques in order to handle the issues of country-specific effects and endogeneity. The results from the empirical analysis show that agricultural land influences per capita income significantly. It hereby implies that as more agricultural land are cultivated; the wellbeing of the populace is likely to be enhanced primary through increased income for farmers, increase in real money income for non-farmers, drastic reduction in food inflation and foreign exchange gains for the government. The results of the study suggest the need for controlling the issue of massive foreign land deals through viable institutional framework, though there is need for foreign investment in Africai¯s agricultural sector but sound institution is pertinent in order to avoid rent seeking behaviour among stalk holders.

Energy Supply and Climate Change in Nigeria

The energy industry has been identified as one of the sectors most vulnerable to the impact of climate change. In the past years, government had been making a lot of effort at reforming the energy sector and this study attempted to investigate the extent to which the energy sector will be affected in the face of the threats presented by a changing climate. The study seeks to examine the impact of climate change on energy supply in Nigeria for the period 1971-2011 using the vector error correction procedure. We adopted the Johansen and Juselius, and Engle-Granger co-integration analysis to determine the rank of the series long run co-integration. Also the error correction model was used to obtain the long-run estimates and the speed of error adjustment. We corroborate our findings by adopting the Wald exogeneity test to examine the direction of causal relationship between climate change and energy production. The study found a positive relationship between climate change and energy supply, as well as no evidence of causal relationship between climate change and energy supply. The study developed an interaction of climate change and measure of institutional quality, though less responsive to energy supply, but exhibits similar pattern with the actual climate change. Also, the indicators of power losses, technology and investment impacts a significant negative influence on energy supply, while GDP per capita and economy structure exerts though positive but the indicator of economic structure was statistically insignificant in explaining dynamism in energy supply. The findings from our empirical investigation puts caution on economic advisers and policy makers on the level of adherence to the Kyoto protocol in order not to jeopardize productivity activities and economic gains. Also,adaptation efforts should however follow careful scenario analysis with a strengthened institutional framework and injection of funds for technological improvement. This could be done in partnership with international organizations and the private sector

Knowledge-driven economic growth: the case of Sub-Saharan Africa

ABSTRACT The experience of South Korea, India, China and Singapore reveals that developing economies can fast-track development, leapfrog the stages of development and catch up with advanced economies by putting knowledge capital as the driver of development. If the knowledge economy is therefore an accelerant of development for both advanced and developing economies, it is possible for Sub-Saharan African (SSA) economies to also catch up with advanced economies. It was on this basis that this study assessed the knowledge capacity of SSA and the effect it has on its economic advancement. Given the importance of the interrelatedness among the knowledge economy elements, this study, thus, examined how the interaction effect between the elements of the knowledge economy affects economic growth in 32 SSA countries, for which data were available, over a period of 17 years (1996–2012). Using the System Generalised Method of Moments (SGMM), the study found out that institutions and human capital in SSA mitigate the effect of innovation on economic growth in the region, thus, making it a lean knowledge economy.

Health aid and child mortality in Africa: Evidence from disaggregated analysis

Background: The international development community has been instrumental in eliniminating child deaths via its major intervention programmes, especially as it relates to bridging the finance gap of developing countries. The paper assesses the effect of health aid and its sub-categories on child mortality. Method: This was achieved by employing the System Generalized Method of Moment (SGMM) dynamic panel data estimator approach. Findings :The study found that health targeted aid was capable of reducing child death but its effectiveness declined by about 40 percent and 80 percent when controlled for institutional quality and socio-political instability respectively. Among the sub-categories, child health outcome was more responsive to aid targeting child health, newborn health, maternal health and malaria control. Conclusion: The evidence obtained would be useful in channeling resources towards the achievement of Sustainable Development Goal (SDG) 3, which entails ending preventable deaths of children under 5 years of age.