Browsing by Author "Yelwa, Mohammed"

Now showing 1 - 3 of 3
  • Thumbnail Image
    ItemOpen Access
    GOVERNMENT BORROWING AND PRIVATE SECTOR INVESTMENT IN NIGERIA: AN EMPIRICAL ANALYSIS
    (Department of Economics, Nasarawa State University, Keffi., 2019-09-14) Chukwumaeze, Donald Ugochukwu; Henry, Ahmed Eggon; Yelwa, Mohammed
    The study examined the impact of government borrowing on private sector investment in Nigeria covering the period 1990-2016. Time series data were utilized which were collected from appropriate secondary sources. The study estimated a multiple regression model using the ordinary least squares method. However, before model estimation was carried out, the Augmented Dickey-Fuller unit root test of stationarity of the time series variables and Johansen-Juselius cointegration test were first conducted. Findings from the unit root test revealed that time series variables were integrated of order one, i.e., each variable became stationary after first differencing. The results of the cointegration test showed that a long-run relationship exists between the time series variables considered. Findings from the regression analysis showed that government domestic borrowing negatively and significantly impacted on private sector investment; indicating that government domestic borrowing crowded out private sector investment during the period under consideration. Findings also revealed that government foreign borrowing positively and significantly impacted on private sector investment; indicating that government domestic borrowing crowded in private sector investment during same period. In view of the fact that government domestic borrowing crowd-out private sector investment in Nigeria, it is recommended that government should endeavour to finance its budget deficit through the equity development funds and bond instruments of the Nigerian capital since government borrowing through the money market raises the interest rate thereby crowing out private sector investment. Also, to avoid crowding out effect of government borrowing, government should endeavour to put in place fiscal prudent measures that would favour the private sector investment by discouraging high government spending in areas that do not have direct positive impact on private sector investment growth.
  • Thumbnail Image
    ItemOpen Access
    AN IMPACT ANALYSIS OF THE RELATIONSHIP BETWEEN MONEY SUPPLY AND INTEREST RATE IN NIGERIA
    (Department of Economics, Nasarawa State University, Keffi., 2019-06-26) Chukwumaeze, Donald Ugochukwu; Yelwa, Mohammed; Henry, Ahmed Eggon; Osuoha, Rophina Chionyeka
    The study examines the relationship between money supply and interest rate in Nigeria for the period 2000-2016. The study utilizes the simple linear regression model, using the ordinary least squares (OLS) technique. The pairwise Granger causality test was used to determine the causal relationship between money supply and interest rate, and result shows that a uni-directional causality runs from money supply to interest rate but not from interest rate to money supply. The Augmented Dickey-Fuller (ADF) unit root test method was applied to test for the stationarity of the time series variables, and results show that the variables were stationary at level. The OLS regression results show that money supply positively and significantly impacted on interest rate during the period investigated and that the regression model has a good fit as the coefficient of determination shows that 85% of the variation in interest rate was explained by money supply. Based on these findings, the study recommends that there should be a time-to-time moderate increase in money supply into the economy which will consequently reduce interest rate, increase investment and boost economic growth in the country; and that the Central Bank of Nigeria should pay special attention on broad money supply by regulating instruments like the liquidity ratio, reserve ratio, among others which directly affect broad money supply.
  • Thumbnail Image
    ItemOpen Access
    IMPACT OF INTEREST RATE FLUCTUATION ON ECONOMIC GROWTH IN NIGERIA
    (Department of Economics, Nasarawa State University, Keffi., 2019-06-30) Chukwumaeze, Donald Ugochukwu; Yelwa, Mohammed; Henry, Ahmed Eggon; Esiaka, Jude Chuka
    The study examined the impact of interest rate fluctuation on economic growth in Nigeria covering the period 1986—2016. Annual data were collectedfrom secondary sources. The study estimated a multiple regression model using the ordinary least squares method. However, before model estimation was carried out, the Augmented Dickey-Fuller unit root test of stationarity of the time series variables and the Johansen-Juselius cointegration test were reported. Findings from the unit root test revealed that time series variables were integrated of different orders while the results of the cointegration test showed that a long-run relationship exist between the time series variables considered. Findings from the estimated regression model showed that monetary policy rate and maximum lending rate impacted negatively and significantly on economic growth, while savings deposit rate had positive but insignificant impact on economic growth during the period investigated. Based on these findings, it was recommended that the Central Bank of Nigeria (CBN) should pursue interest rate policies that encourage investment and economic activities in Nigeria. This could be ach ieved by a sustained reduction in the prime lending rate to investors so as to encourage them to borrow more money and increase their levels of investment. Lastly, the CBN should increase the channels offinancial access to the private sector to stimulate investment opportunities in the real sector of the Nigerian economy.