INTERNATIONAL FINANCIAL INFLOWS AND ECONOMIC GROWTH RATE OF NIGERIA, 1983-2018: EPISODIC ANALYSIS.

INTERNATIONAL FINANCIAL
INFLOWS AND ECONOMIC
GROWTH RATE OF NIGERIA,
1983-2018: EPISODIC ANALYSIS.
Ngozi Nwachukwu
Department of Banking and Finance
Enugu State University of Science and
Technology Enugu State
ABSTRACTS
This study comparatively analyzed in
episodes of 1983-1999 and 1999-2018 the
impact of international financial inflows onBook of Abstract
economic growth rate of Nigeria during
military
and
civilian
governments
respectively. The major objective was to
analyze and compare the effect of the
explanatory variables which included
external debt, foreign direct investment,
foreign aids (official development assistance)
and exchange rate as control variable on the
dependent variable (economic growth rate)
proxied by annual growth rate of gross
domestic product (GDPGR). The study
adopted the autoregressive distributed lag
(ARDL), ARDL ECM regression form and ARDL
bound test co-integration approach for the
estimations. Preliminary tests carried out
among others included ADF traditional unit
root test, breakpoint consistent unit root test
to ascertain the positive and significant
function of GDPGR at 5% significant level
during the military regime, and negative and
significant during the civilian regime. External
debt stock affected the GDPGR negatively
and significantly in military regimes and in
this civilian government. ODA is a positive
and significant function of GDPGR in this
present civilian government whereas it was a
negative and insignificant function of
economic growth rate during the military
regime. In the bound test following the ARDL,
there was evidence in favor of co-integration
among the variables regardless of whether
they are stationary or not given that the
observed test statistic exceeds the upper
critical band in civilian government. The
results imply the presence of co integrating
vectors of long run equilibrium relationships
among the variables of interest in the civilian
government and none existed in the military
regime. It was recommended among others
that government should curb insurgency and
insecurity in this present government in the
nation to create an environment that will
attract foreign investors leading to increase
in the volume of foreign inflows into Nigeria;
and also reduce their rate of borrowing and
Accounting and Finance Research Association
channel the borrowed funds into viable
project that will guarantee positive return on
investment. This will play a catalytic role for
boosting the economic growth rate in
Nigeria.
Keywords: FDI, Economic Growth Rate,
Foreign Inflows, Nigeria, ARDL.

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