Samuel Isaac’s Post

🚀 Exciting News! 🚀 I am thrilled to share that my latest research paper has just been published! 🎉 📄 Title: "Financial Development, Monetary Policy, and the Monetary Transmission Mechanism—An Asymmetric ARDL Analysis". In this paper, I explore the asymmetric impacts of financial development and monetary policy on the monetary transmission mechanisms in Nigeria, spanning data from 1986 to 2023. Utilizing nonlinear ARDL models, the study reveals fascinating insights into how changes in monetary policy and financial sector innovations influence the economy differently based on the level of financial development. Key Findings: 🔍 Asymmetries exist in both the short and long run. 📊 The effects of financial development and monetary policy on various monetary channels are not uniform. 🌍 Highlighting the complex interaction between financial development and monetary policy, especially in evolving financial markets. 📈 Recommendations for policies to enhance the financial system across banking, capital, and bond markets to boost the effectiveness of monetary interventions. This research aims to provide valuable information for policymakers to tailor their strategies, ultimately enhancing economic stability and growth in Nigeria. A big thank you to everyone who supported and contributed to this work! 🙏 Read more about the study here: https://lnkd.in/eiBeMWQ9    https://lnkd.in/esu6T7nC #Research #Economics #FinancialDevelopment #MonetaryPolicy #Nigeria #EconomicGrowth #Policymaking #Economies #CentralBankofNigeria #CBN #@MDPIOpenAccess #MonetaryTransmissionMechanism #AssetPriceChannel #CreditChannel #ExchangeRateChannel #InflationExpectationsChannel #InterestRateChannel #BankingSectorDevelopment #CapitalMarketDevelopment #BondMarketDevelopment #FinancialLiberalization

Despite numerous global and domestic challenges, Nigeria’s financial sector has demonstrated remarkable resilience throughout the first half of 2024. The country’s economic landscape has been significantly shaped by fluctuating global trends and domestic events, which have collectively influenced financial policies and market trends. In the first half of 2024, Nigeria grappled with severe economic turbulence, characterised by insecurity, rapid depreciation of the Naira, high cost of living, and soaring inflation rates. In this article, our Team Lead, Noble Obasi, and Associates, Omobolaji Bello, Ibitola Akanbi, Ebube Okorji and Justina Okachi, provide a comprehensive exploration of Nigeria’s financial sector performance in the first half of 2024, along with a detailed outlook of the anticipated trends and regulatory developments expected to influence the second half of the year. Click the link below to read the full publication and reach out to [email protected] for further inquiries and consultation. https://lnkd.in/e2NkZP9r #strenandblanpartners #commerciallawfirm #financialservices #financialsector

Publication Alert! Our research explores the short-run dynamics between macro-financial drivers and Nigeria's bond market, shedding light on key factors that shape its development. Key Findings: Negative Impacts: Fiscal deficits, inflation, and GDP per capita growth hinder bond market growth. Positive Impacts: Domestic debt and stock market development drive market performance. Insights: Banking size and monetary policy rate had insignificant effects, and no long-run relationship was found between drivers and market performance. Policy Recommendations: 1️⃣ Redirect public spending to projects that stimulate economic growth. 2️⃣ Promote financial inclusion to enhance the domestic debt market. 3️⃣ Ensure macroeconomic stability to build investor confidence. 4️⃣ Foster stronger integration between bond and stock markets. This research underscores the need for dynamic fiscal discipline and structural reforms to unlock the potential of Nigeria's bond market as a driver of economic growth. You can read the full article here: https://lnkd.in/geVeg4bF #Finance #Macroeconomics #BondMarket #Nigeria #EconomicGrowth #Research

#Why Nigeria Will Remain Poor: A Capitalist Nation's Quagmire Introduction: Nigeria's financial system is plagued by numerous challenges that have hindered its economic growth and prosperity. As a capitalist nation, Nigeria's reliance on oil exports, limited financial inclusion, high inflation, and weak regulatory framework have created a perfect storm of poverty and underdevelopment. Challenges Facing Nigeria's Financial System: - Dependence on Oil Exports: Nigeria's reliance on oil exports makes it vulnerable to fluctuations in global oil prices, which can have a devastating impact on the economy. - Limited Financial Inclusion: Many Nigerians lack access to formal financial services, which limits their ability to save, invest, and access credit. - High Inflation: Nigeria has experienced high inflation rates in recent years, which can erode the purchasing power of consumers and reduce the value of savings. - Foreign Exchange Challenges: Nigeria has faced challenges in managing its foreign exchange reserves, which can impact the availability of foreign currency for imports and investments. Solution: To address these challenges, we propose a shift in focus towards capital development and evolution. This includes creating systems that stimulate capital development, such as investing in education, infrastructure, and innovation. We also propose that policymakers prioritize capital development over money development and create policies that support the growth of capital markets. Conclusion: Nigeria's financial system is complex and multifaceted, with numerous challenges that have hindered its economic growth and prosperity. However, by prioritizing capital development and evolution, We shall create a more prosperous and equitable society for all. But we need to encourage policymakers to focus on capital development and evolution and create policies that support the growth of capital markets.

These pointers for making Nigeria great are instructive and pragmatic.

#publication #alert I am happy to share my latest coauthored paper titled "Fiscal Policy and Financial Depth in Nigeria: An Application of Threshold Regression Modeling". The paper aimed at examining the impacts of fiscal deficit, domestic debt, and government expenditure on financial depth in Nigeria. The study uses four indicators of financial deepening: liquid liabilities, credit to the private sector, deposit money banks’ assets and financial system deposits (all indicators are expressed as percent of GDP). In particular, the government is the threshold variable expected to have a threshold effect on Nigeria's financial depth. The study covers 60 years between 1961 and 2020 and employs a threshold regression model to achieve the research objectives. A linear regression model is employed for the robustness test by including the government expenditure square to test the significance of non-linearity. The study's findings establish fiscal policy's significance in driving financial depth. Beyond the threshold of 8.11 percent, government expenditure significantly increases financial deepening. This is consistent across the indicators of financial depth and the overall financial depth. It further shows the important role of fiscal deficit and domestic debt in deepening the financial market as the threshold value exceeds 8.11 percent. However, fiscal may have a negative, though insignificant, effect on financial depth when the threshold of government expenditure is no more than 8.11%. Real per capita is also a key factor in promoting financial depth. Therefore, higher income is important for a financially deeper financial system. Therefore, attaining minimum government expenditure is crucial for accelerating financial development in Nigeria. You can read the full paper here: https://lnkd.in/gdcZB65s #uiii #indonesia #finance

Day 2 @ NES 65th Annual Conference Lecture 1: Monetary-Fiscal Coordination in Price and Exchange Rate Stability Economists have long advocated for the alignment of monetary and fiscal policies to achieve Nigeria's macroeconomic goals, particularly in terms of price and exchange rate stability. However, due to institutional irregularities and the political motivations behind many fiscal policies, achieving this alignment has proven challenging. Consequently, the Central Bank of Nigeria (CBN) has had to expand its jurisdiction to encompass aspects of fiscal policy. The hypothesis that price and exchange rate stability can be managed solely by the CBN is flawed. Inflation, particularly in Nigeria, is both a monetary and fiscal phenomenon. This dual nature of inflation necessitates a coordinated approach between monetary and fiscal policies. Recently proposed fiscal policy reforms, such as implementing zero tax on food items, aim to address price instability. Food inflation, which constitutes a significant portion of the Consumer Price Index (CPI), illustrates the need for a cohesive strategy. Although this reform is a short-term solution, it demonstrates the necessary collaboration between Nigeria’s fiscal and monetary policies to achieve the desired macroeconomic objectives. Lecture 2: The Renewed Hope Agenda: 15 Months After: What have we learnt and the Pathway for the future. A careful analysis of this agenda was done and it was concluded that its actualized objective it way behind its project objective. #NES65thAnnualConference #RenewedHopeAgenda #FiscalMonetaryPolicyCoordination #Nigeria #Insight

Last week, we commemorated Nigeria’s dynamic spirit and forward-looking vision with the theme “Turning the Corner.” The World Bank's recent announcement of a substantial $2.25 billion financing package, accompanied by immediate financial and technical support, is a significant step towards stabilizing Nigeria's economy. As we continue to support its macroeconomic reforms, our primary focus remains—broadening the safety nets and protecting the poor and vulnerable. Click here for more information on the announcement: https://lnkd.in/ev7B_ZFt In Washington DC, a series of enlightening sessions brought to the forefront key areas of development that will shape Nigeria's future: 1. #HumanCapital: Discussions centered on improving health and education outcomes, emphasizing a multisectoral approach to achieving these goals. 2. #Energy: Nigeria's power sector unveiled opportunities and challenges, focusing on sustainable reforms. The commitment to providing reliable and affordable electricity and achieving universal access was evident. 3. Macroeconomic Reforms: Speakers and guests unpacked Nigeria's macro-fiscal reforms and their social impacts. The discussion highlighted integrated support measures to assist the poor and vulnerable. 4. #Digital Transformation: The event underscored Nigeria's strides in digital innovation, pivotal for economic diversification and growth. Despite challenges, Nigerians exhibit resilience through thriving entrepreneurship and innovative startups. The country’s creative industry and technological advancements could drive global impact. Nigeria is at a transformative moment to seize opportunities to diversify its economy and invest in its people. #InvestInPeople #InclusiveGrowth

Curious about the state of financial inclusion in Nigeria? The Access to Financial Services in Nigeria (A2F) 2023 Report, from EFInA, offers a comprehensive look at the evolving landscape of financial inclusion in Nigeria. This data-driven report provides valuable insights for researchers, policymakers, and anyone passionate about building a more inclusive financial future. Key Highlights: Data-driven analysis: The report delves into access, usage, capability, health, and challenges related to financial services in Nigeria. Nuanced context: Beyond the numbers, insightful analysis and commentary enrich the data, providing a deeper understanding of the complex landscape of financial inclusion.   Actionable insights: The report offers data- driven insights to inform your work and contribute to the development of effective policies and programs that advance financial inclusion for all Nigerians. Download the full report here: https://lnkd.in/djfsA_7C #A2F2023Survey #A2F2023Report #FinancialInclusion #FinancialInclusioninNigeria #InclusiveFinance #Finclusion #EFInA #A2F

As a professional deeply engaged in Nigeria's economic and financial landscape, I have been closely monitoring the Central Bank of Nigeria's (CBN) monetary policies, particularly the recent increase in the interest rate from 26.25 to 26.75. This decision, following a series of previous hikes, has significant implications for both businesses and individuals. From my perspective, the primary intention behind these rate increases is to curb inflation and stabilize the economy. However, the immediate impact is often felt in the form of increased borrowing costs. For businesses, especially small and medium-sized enterprises (SMEs), this rise in interest rates translates into higher costs for loans and credit facilities. As someone who has worked with numerous SMEs, I’ve seen firsthand how these rate hikes can strain cash flows, limit expansion plans, and reduce the overall investment in growth initiatives. Consider the case of a local manufacturing company I recently consulted with. They were planning to expand their production capacity to meet growing demand. However, with the recent rate increase, the cost of financing this expansion has become prohibitive. They now face a tough decision: delay their growth plans or seek alternative, possibly more expensive, funding options. This scenario is not unique; many businesses across Nigeria are grappling with similar dilemmas, which can ultimately stifle economic growth and job creation. For ordinary Nigerians, the higher interest rates have a profound impact on personal finances. Consumer loans have become more expensive, some lenders charging interest as high as 120% leaving consumers with less disposable income. In a country where many are already struggling to make ends meet, this additional financial burden can be particularly challenging. The rate hikes also influence savings and investment decisions. While higher interest rates can theoretically benefit savers, the real return on savings often remains negative when adjusted for inflation. This discourages savings and pushes individuals towards riskier investment options, potentially leading to greater financial instability. While the CBN's interest rate policy aims to address macroeconomic challenges, its impact on the ground cannot be ignored. Businesses are forced to reassess their growth strategies and individuals face tighter financial conditions. As we navigate these economic realities, it's crucial for both policymakers and stakeholders to engage in dialogue, seeking balanced solutions that support economic stability while also considering the on-the-ground realities faced by businesses and ordinary Nigerians. The road ahead may be challenging, but with thoughtful and inclusive policymaking, we can find a path that fosters sustainable growth and prosperity for all.