Journal of Economics and Policy Analysis

Health and Labour Force Participation: Empirical Evidence from Nigeria

2026-02-04T01:24:44+00:00

This study examines the impact of life expectancy and ill-health on labour force participation in Nigeria using data from World Development Indicators. Two models of labour supply decision using two-stage instrumental variable estimation method with main predictors of health on labour market performance: life expectancy, incidence of malaria, tuberculosis, HIV/AIDS were employed to examine the effects of health on labour force market participation. The results show that increase in life expectancy will increase labour force participation by about 33% without controlling for other household characteristics and by about 83% when control for other household characteristics. Also, reduction in diseases like Malaria, HIV/AIDS and Tuberculosis will increase labour supply and productivity. Thus, it was concluded that ill-health has negative impact on industrialization through reduced economic output due to decline labour supply. It was therefore suggested that public sector must play an important role in key areas like labour market, education and rural-urban migration to improve the health of the labour force and hence overall productivity. Higher priority should also be given to tackling widespread diseases with low mortality burdens, but considerable effects on productivity.

Impact of Private Investment on Labour Productivity in Nigeria

2026-02-04T01:24:45+00:00

Labour productivity is one of the measures of economic performance. Its growth is essential for sustainable improvements in living standards and business conditions. The growth of labour productivity depends on certain factors, including investment. New growth theory states that labour productivity is driven by investment. It is on this basis that this study examined the impact of private sector investment on labour productivity in Nigeria. The study made use of time-series data of labour productivity, credit to private sector, domestic private investment and foreign direct investment in Nigeria from 1981 to 2016. The data were drawn from various issues of Central Bank of Nigeria statistical bulletin and World Bank data. The study adopted fully modified ordinary least squares to take care of endogeneity and error correction mechanism, which provide information on the long and short-run relationship, as well as the speed of adjustment between the variables. The findings showed that credit to private sector is essential for labour productivity growth in Nigeria in the long-run, while in the short-run, domestic private investment enhances growth in labour productivity; also, the ECM was negatively signed and significant at 5%. It was, therefore, recommended, among others, that there is a need for government to encourage domestic private investment through the creation of enabling environment for private investors to thrive.

Towards Improving Micro, Small and Medium Enterprise Credit Access through Movable Assets Registry in Nigeria

2026-02-04T01:24:45+00:00

There is a visible dichotomy in the Nigerian economy, which breaks it into a large and growing informal sector, buoyed by an array of inadequacies that have reduced the ease of doing business, and a formal sector that is largely stagnant. As a result of many years of incongruent and mostly unstable political-social and economic policies, unemployment and poverty rates have run amok, driving large portions of the population to the informal sector. Economic exclusion has festered as more and more people get structured to the periphery of the economy. With a population estimated by McKinsey to hit 207 million by 2020, and a financial exclusion rate of over 50%, the job of poverty reduction has become even more challenging. One of the key handicaps of the informal sector is the lack of bankable assets among operators in a banking system that is predominantly formal. Indeed, the Nigerian financial superstructure is patently formal but sits squarely on a substructure of informality. This has hampered banks' effort to maximally finance the informal sector. However, the recent introduction of the Secured Transactions in Movable Assets Law, 2017, promises to unleash the hitherto unbankable informal sector assets to facilitate financial inclusion. This paper examined the existing principles of the Nigerian law of secured credit, vis-à-vis the potentials of the new law to boost access to credit by the informal sector. It identified its prospects and proposes that the implementation of the new law be accompanied by massive enlightenment and education of stakeholders, to avoid misconceptions and mistakes that may discourage lenders from fully embracing the new rules. It also suggested a combination of strategies for making the most out of the new law so as to facilitate responsible bank lending to the informal economy in Nigeria.

Import Substitution Strategy and Industrial Sector Performance in Nigeria

2026-02-04T01:24:45+00:00

This study re-examines the import substitution strategy and its relevance in promoting rapid industrialisation in Nigeria. The variables used to buttress this relationship are: industrial output, import substitution, export promotion, non-oil export promotion, non-oil exports, imports, and trade openness. The data were collected for the period 1986-2015 and were evaluated using the Bayesian maximum likelihood estimation technique. The study found that the effect of import substitution on industrialisation is not significant; however, it had a latent effect. This indicates that the quest for replacing imported goods with local content has not been fully realised. Non-oil exports were, however, significant and affected industrial output positively, implying that if the import substitution strategy is rigorously adopted, the growth of the industrial sector will be imminent – driven by non-oil exports. In addition, the findings revealed that dependence on foreign trade poses no threat to the quest for industrialisation in Nigeria. It concluded that the strategy of import-substitution is relevant to rapid industrialisation in Nigeria. The study recommended, among others, that government should, in addition to expenditure switching to import substitution, optimise different forms of linkages within and outside the industrial sector.

Educational Expenditure and Economic Growth in Nigeria

2026-02-04T01:24:45+00:00

This study investigated the relationship between educational expenditure and the Nigerian economic growth, using annual time series data over the period 1981-2015. The study employed the impulse response function (IRF) and variance decomposition (VDC) of the vector error correction model (VECM) technique. The rationale for using the IRF was to determine the effect of shocks in educational expenditure, capital formation and labour force on growth, while VDC was adopted to measure the relative importance of shocks in educational expenditure, capital formation and labour force on growth of the Nigerian economy. The study found that economic growth responds positively to educational expenditure. The IRF, however, showed that economic growth responds negatively to gross capital formation. Also, IRF indicated that economic growth responds negatively to labour force; while VDC, on the other hand, revealed that educational expenditure accounts for the least variation in economic growth, despite its positive effect on growth. VDC also showed that labour force accounts for the greatest variation in economic growth. The study also applied Granger causality test to determine the cause-effect relationship between educational expenditure and growth and found that growth granger-causes education expenditure, while educational expenditure does not granger-cause growth, even though growth tend to responds positively to education expenditure. The implication of this finding is that educational expenditure does not cause growth of the Nigerian economy. As a result, the study recommends that the Nigerian government should increase its budgetary allocation to the education sector to improve the quality of education and the labour force thereby bringing about increased growth of the economy at large.

Inward Remittances, Financial Sector Development and Economic Growth in Nigeria: ECM Approach

2026-02-04T01:24:45+00:00

This study sought to empirically examine the relationship between inward remittances and economic growth in Nigeria. Annual time series data covering 38 years were sourced from World Development Indicators (2016) for the period 1977-2016 to analyse the estimates of the short-run adjustment using error correction mechanism. The result showed that the coefficient of error correction mechanism (ECM ) carried the expected t-1 negative sign and was statistically significant at 5 percent. Moreover, the ECM indicated a feedback of about 54 per cent of the previous year disequilibrium from the long-run elasticity of remittances, population, openness and banking sector development. It was, therefore, recommended, among others, that Nigeria's monetary authorities should expand remittance channels to include bureaux de change and capable microfinance banks to undertake remittance transfers.