Vol. 2 No. 3 (2024)

Open Access

Article

Article ID: 1806

Does economic growth, external debt, and institutional quality promote poverty and income inequality in Nigeria?

by Magaji Ibrahim Yakubu, Samson Adeniyi Aladejare

Forum for Economic and Financial Studies, Vol.2, No.3, 2024;

The United Nations sustainable development goal 10 (SDG10) aims to reduce inequality and by extension poverty within and between countries. However, issues of economic growth, external borrowing, and institutional quality could clog efforts at realising SDG10, particularly in a developing country. Thus, this study assessed the effect of economic growth, foreign debt, and institutional quality on poverty and income inequality in Nigeria between 1990 and 2022. The research applied the autoregressive distributed lag (ARDL) technique in its empirical analysis. Findings from the study indicated that economic prosperity does not have significant long-run impact on poverty and inequality. However, the short-run relationship showed that economic growth increases inequality in Nigeria. Foreign borrowing was revealed to further aggravate poverty and inequality in the long-run. Also, while government effectiveness demonstrated an enhancing effect on poverty in the short and long-run periods, its long-run impact on inequality is significantly decelerating. Thus, based on the aforesaid conclusions the study recommends the strengthening of small and medium enterprises through access to finance at lower interest rates and equitable distribution of national wealth through the payment of a living wage, provision of social and economic infrastructure, etc. Also, the agricultural sector should be made more attractive to the youths through encouraging export promotion policies. Leveraging financial technology, and encouraging start-up firms can further reduce the poverty and the inequality level in the country.

Open Access

Article

Article ID: 1497

The economic implications of Nigeria’s foreign debt servicing and sustainability

by Samson Adeniyi Aladejare, Mohammed Auwal Musa

Forum for Economic and Financial Studies, Vol.2, No.3, 2024;

Despite extensive literature examining the role foreign debt plays in the growth of the Nigerian economy, seldom do they simultaneously consider the effect of external debt servicing and sustainability. Accordingly, this study examined the impact of external debt servicing and sustainability on the economic growth of Nigeria for the period between 1980 and 2022. The auto-regressive distributed lag (ARDL) model was adopted to measure the effect of the explanatory variables on the dependent variable. Empirically, the study demonstrated that the impact of debt sustainability was insufficient on the economy; notwithstanding being positive in the long run. Thus, suggesting the presence of a sovereign Ponzi finance in Nigeria’s debt management. However, the effects of external debt servicing and foreign debt interest payment were significant and negative on the economy in the short and long run periods. Thus, showing that resources being used to service the debt of the nation, crowd-out funds that could have been used to spur growth of the economy. Generally, the study affirmed the applicability of the debt-overhang hypothesis for the country.  Conversely, exchange rate significantly and positively impacted the economy, indicating that an improvement in the value of the Naira, will be indicative of an improvement in the economy. Hence, the study recommends amongst others that effective external debt management strategies such as the debt for equity swap programme should be adopted by fiscal authorities in the country.

Open Access

Article

Article ID: 428

Money market insights in China: Evidence from visual analytics approach

by Qisheng Guo, Xiaoming Li, Qiyuan Li, Shenghui Cheng

Forum for Economic and Financial Studies, Vol.2, No.3, 2024;

This research employs visual analytics approaches to demystify the complex dynamics of China’s money market, spanning from 1984 to 2020. Our objective is to transform intricate financial data into intuitive visual representations, thereby enhancing understanding and decision-making. We utilize advanced visual analytics techniques to analyze key aspects like money supply, deposits, loans, and foreign exchange. The study reveals significant trends and insights, contributing to a more comprehensive understanding of financial dynamics in China. These findings serve as valuable tools for economists and policymakers, guiding more informed decisions in financial governance.

Open Access

Article

Article ID: 458

Do medical spending and income reduce the prevalence of human immunodeficiency virus and tuberculosis? A study on Sub-Saharan Africa

by Murad A. Bein, Galip E. Erdil

Forum for Economic and Financial Studies, Vol.2, No.3, 2024;

Several countries in sub-Saharan Africa (SSA) suffer from economic hardship and high unemployment rates; furthermore, this region has higher rates of human immunodeficiency virus (HIV) and tuberculosis (TB). This study examined the relationships between HIV and TB, income, and total medical spending and its components, private and public healthcare expenditure, for 41 SSA countries. Random and fixed-effects models were utilized in this study to explore relationships by studying time series and cross-sectional panel data obtained from the World Bank. Results demonstrated that there is a positive relationship between HIV and unemployment and a negative relationship with income and medical spending. We also observed that, when private and public medical expenditures are compared, private medical expenditures alleviate the HIV epidemic. Considering the association with TB, income, total, and its components, private and public medical expenditures are negatively related. Since prevention of such life-threatening diseases as HIV and TB becomes vital to find remedies for, there is a need for more government initiatives, including job creation, increased productivity, and increased income levels, which can be seen as preconditions in fighting and controlling HIV and TB.

Open Access

Review

Article ID: 1626

Why the European Central Bank lacked efficacy to fight against the recent surge in inflation

by Séverine Menguy

Forum for Economic and Financial Studies, Vol.2, No.3, 2024;

The paper focuses on the determinants of the surge in inflation between 2021 and 2023 and on the efficacy of monetary policy in fighting against these inflationary tensions. The main role of the European Central Bank is to ensure that inflation expectations remain anchored to a clear target. An active monetary policy can also stabilize future expected inflationary tensions or demand shocks. However, a simple theoretical model can explain the incapacity of European monetary policy to fight against the supply-side factors of inflation in the post-COVID period: inflationary tensions inherited from previous periods, imported from foreign countries (energy and food), or due to higher current or anticipated profit margins. In these cases, a huge increase in the nominal interest rate and a very contractionary monetary policy only risk creating a strong recession, without avoiding inflationary tensions.