Tokunbo Simbowale Osinubi

Stock Market Development and Long-Run Growth in Nigeria

Abstract The study empirically assessed the relationship between stock market development and long-run economic growth in Nigeria for the period 1980 to 2000. The study used secondary data while four models of multiple regressions were specified. The regression results, which were obtained using the Ordinary Least Square (OLS), show that measures of stock market development statistically have no significant effect on economic growth in Nigeria during the period 1980 to 2000. The major implication of the findings is that if the Nigerian Stock Market is to significantly contribute to rapid economic growth, policies must be fashioned out to eliminate those factors that blur the effectiveness of the vehicle or transmission mechanism through which stock market activities influence economic growth. Based on the findings, it was recommended that there should be an improvement in the attractiveness of the market as a major source of raising capital. This will entail improvement in the physical infrastructure, more efficient share transfer and delivering system and provision of adequate and timely information on the market. Also, there should be improvement in the institutional regulation, environment and legal framework such that a balance is maintained between the soundness and safety of the market. And finally, there is the need to internationalize the stock market to improve the flow of savings. This willgive the market the advantages of risk diversification, improve information flow and encourage corporate control through investment in equity.

Ethnic Conflicts in Contemporary Africa: The Nigerian Experience

Abstract Most developing countries are ethnically diverse. Ethnic diversity may lead to increased civil strife. This perception is tottered both by some graphic individual scenes of inter ethnic violence, and by an aggregate correlation: Africa has not only the highest ethnic diversity, but also the highest incidence of civil war. Potentially, this might account for the detrimental economic effect of diversity. In countries of traditional stability, ethnic conflict is becoming an increasing factor. Ethnic conflicts have become the serious challenge of our times, which perhaps explains why ethnicity is seen as the reigning concept in African studies at present. In Nigeria, the colonial masters provided urban setting, which constitutes the cradle of contemporary ethnicity. The colonialist while pretending to carry out a mission of uniting the warring ethnic groups, consciously and systematically separated the various Nigerian people thereby creating a suitable atmosphere for conflict. With the heterogeneous nature of the country, the tendency of the various nationals is towards parochial consciousness at the expense of national consciousness. This study, therefore, relies on content analysis as its methodology to examine ethnic conflicts in Nigeria. It also examines the effects of ethnic conflicts on the country’s search for unity and identifies the possible issues for resolution. The study also proffered suggestions on how to curb ethnic conflicts in Nigeria.

BUDGET DEFICITS, EXTERNAL DEBT AND ECONOMIC GROWTH IN NIGERIA

The necessity for governments to borrow in order to finance a deficit budget has led to the development of external debt. This study examines how the use of budget deficits as an instrument of stabilization leads to the accumulation of external debt with the attending effects on growth in Nigeria between 1970 and 2003. By synthesizing a relationship between budget deficits and external debt the study shows the implications on economic growth of conducting a fiscal policy within the contexts of debt stabilization and debt sustainability. The results of the econometric analysis confirm the existence of the debt Laffer curve and the nonlinear effects of external debt on growth in Nigeria. The study concludes that if debt-financed budget deficits are operated in order to stabilize the debt ratio at the optimum sustainable level debt overhang problems would be avoided and the benefits of external borrowing would be maximized.

ENERGY CONSUMPTION AND GDP IN THE OECD COUNTRIES: A CAUSALITY ANALYSIS

Abstract This study investigated the nature or direction of causality between GDP, electricity consumption and total energy consumption in the OECD. Secondary data was used while both the ordinary least square (OLS) and generalized method of moments (GMM) estimators were employed to test for causality in our model. Our result found the presence of a bi-directional causality between energy consumption and GDP for the total energy demand model and between electricity consumption and GDP for the electricity demand model. By implication, the bi-directional causality in our estimated models suggest that both energy consumption and GDP are important factors in economic development in the OECD. Thus, if misguided policy measures are made to reduce energy consumption it could have a detrimental effect on GDP which will slow down economic growth. A recommendation is for policy makers to concentrate on encouraging energy efficiency as a way to reduce energy and electricity consumption.