CHALLENGES AND PROSPECTS OF ECONOMIC DIPLOMACY AS A DRIVER OF NIGERIA’S NATIONAL INTEREST

CHALLENGES AND PROSPECTS OF ECONOMIC DIPLOMACY AS A DRIVER OF NIGERIA’S NATIONAL INTEREST

INTRODUCTION

The de-ideologization of international relations following the disintegration of Soviet Union and seeming collapse of the socialist bloc has ushered in accelerated economic globalization. This process was initiated at the end of World War II with the creation of international economic institutions against Mercantilism. Hence, Aina (2006:2) remarked that “as a consequence, growing interdependence prevalent in the West since the 70’s and 80’s immediately spread across the globe and the capitalist rules came to dominate international economy changing along side, the political face of the world”.

States with weak economies in the present world order are trapped from growing unless they adapt fast to the new rules of the global regime. This new rule requires a refocusing of foreign policy priorities to economic issues targeted at internal development stratagem. In this process Nigeria is not left out in the transformation of her foreign policy thrust to largely economic diplomacy. A country’s foreign policy guides and shapes the behaviour of that country in international arena. According to Rosenau (1976) foreign policy may be “aggressive or submissive, long range or short range, economic or diplomatic”. Similarly, Asobie (1991:35) noted that “while foreign policy is the substantive aspect of external relations, diplomacy is the procedural aspect”. It is thus “the process of putting into effect foreign policies of nation states” (Petrovsky, 1998).

By Diplomacy we refer to “the management of international relations by negotiation, the method by which these relations are adjusted by ambassadors and envoys the business or art of the diplomats” (Nicolson,1950:15;Asobie,2002:47; Okodolor,2007:1).The process of negotiation leads to compromise as a means of solving political and economic problems in

 

international arena. Hence, Okolie, (2008:1) maintains that diplomacy is the art of making compromise in international political matters which promote rather than jeopardize the basic interest of a nation. According to Asobie it is the process of bargaining among states in order to narrow arrears of disagreement reached.

He further remarks that economic diplomacy may be defined in one of three ways:

 

  1. As the management of international relations in such a manner as to place ascent on the economic dimension of a country’s external relations. Thus, he noted that economic diplomacy is the conduct of foreign policy in such a manner as to give topmost priority to the economic objectives of a nation.
  2. Economic diplomacy as the appreciation of economic instrument in negotiation and bargaining with other
  3. As a set of strategies and tactics formulated and applied for the achievement of a fundamental restructuring of the existing international order (Asobie, 2002:47- 48).

 

Asobie’s above definition attests to the fact that at the base of economic diplomacy is the pursuit of foreign policy and the development principles through predominantly economic precepts (Okolie, 2008). Economic diplomacy therefore reinforces the effective implementation of economic reforms of Structural Adjustment Programme and National Economic Empowerment and Development Strategy. Hence, Nigeria’s foreign policy since independence has experienced about five major shifts, which under Abubakar Tafawa Balewa (1960-66) has been characterized as pragmatic. In his words:

So far as is possible, the policy for each occasion will be selected with a proper independent objectivity in Nigeria’s national interest. (Abubakar, 1960:3)

 

This is in sharp contrast with the militant and radical orientation of General Yakubu Gowon’s regime (1966-1975) and the dynamic, radical, nationalistic and even revolutionary reformist posture of General Murtala Muhammed/Obasanjo regime of (1976- 1979),Fawole,2003;Garba, 1979). The withdrawal of the military in politics in 1979 following

 

the election of Alhaji Shehu Shagari as President of the Federal Republic of Nigeria induced the fourth shift which in the perception of the initiator was characterized in “Afro centric” terms. In his foreign policy thrust, President Shehu Shagari on March 18, 1980 decried that Africa remains the corner-stone of Nigeria’s foreign policy. According to him:

My administration is committed to the cause of the total liberation of Africa and the abolition of racism in all its ramification. We shall neither relax nor relent until all Africans and all black men are free…. We want a new world, where no man and no nation is oppressed, where men as well as nations are judged by the content and quality of their human resources rather than military or economic powers (Shagari ,1980:5).

 

Since Shagari’s ouster and the subsequent military regimes of Buhari/Idiagbon and General (Ibrahim Babaginda), there has been an oscillation from an assertive nationalist posture (Buhari/Idiagbon) to a retreat from Afro-centrism or continentalism to a personalized, tightly controlled sub-regionalist posture that relies on interventionism and activist foreign policy that divert attention from the strains and stresses of the economy, society and polity. This continentalism has remained a feature of Nigeria’s foreign policy since General Sani Abacha supplanted the Interim National Government of Ernest Shonekan in a palace coup d’etat in 1993. Although economic diplomacy was popularized under the regime of Ibrahim Babaginda, the fifth shift seems to have emerged with the administration of General Abudusalami Abubakar. In his address at the annual patrons dinner of Nigerian Institute of International Affairs held on December 12, 1998, he noted as follows:

This administration accepts the proposition that a sound economy  is the bedrock of a strong and proactive foreign policy by any country. And for us, as nation at the cross roads of history the condition of our national economy will have a decisive impact not only on the sustenance of our democratic transition after 29 May, 1999, but also on our role in world affairs (Abubakar, 1998:3).

 

The above policy thrust underscores the primacy of economic issues over security matters in this era of global economic liberalization. Hence, emphasis shifted to adapting to the new competitive rules of the game. Despite all odds, Nigeria, attempts to survive and prosper economically by adjusting in line with the dictates of the new global regime rooted in capitalist hegemony.

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Feb 10

Financial system and its effect on Nigeria Economy

Financial system and its effect on Nigeria Economy

CHAPTER ONE INTRODUCTION

Background to the Study

The precise link and direction of causation between financial development and economic growth has remained at the centre of empirical debates for decades. The debate arguably gathered momentum with the empirical works of King and Levine (1993) who, in a cross country study comprising data from 77 countries over the period 1960-1989, found that the level of financial development stimulates economic growth. Deidda and Fattouh (2002) with the same data but a threshold regression confirm the positive relationship between the level of financial depth and economic growth for countries with high income per capita but no significant relationship for lower-income countries, which is consistent with the non-monotonic relationship implied in the model.

 

Again, Rousseau and Sylla (2001) in their cross-country study covering 17 countries over the period 1850-1997 also find evidence of a leading role for finance. Their result was further supported by Rousseau and Wachtel (1998) who, examining the links between the financial and real sectors for five countries that underwent rapid industrialization over the 1870-1929 period, are able to confirm that financial intermediation Granger-cause real output, especially before the Great Depression, with little evidence of feedback from output to intermediation.

 

Allesandra (2010) has argued that the strongest critique to all these studies comes from Arestis and Demetriades (1997). The authors, using King and Levine’s (1993:3) data underline that the question of causality cannot be satisfactorily addressed in a cross-section framework. More specifically, they conclude that:

 

…we have warned against the over-simplified nature of results obtained from cross-country regressions in that they may not accurately reflect individual country circumstances such as the institutional structure of the financial system, the policy regime and the degree of effective governance. The econometric evidence we have reviewed using time-series estimations on individual countries suggests that the results exhibit substantial variation

across countries, even when the same variables and estimation methods are used. Thus, the ‘average’ country for which cross-country regressions must, presumably, relate to may well not exist.(Allesandra,2010:2)

 

Some scholars have also approached the subject from the perspective of time series in a bid to find a common ground of consensus but here also, the results have been contentious. For instance, Harrison, Sussman and Zeira (1999) using a panel of data for 48 US states from 1982- 1994, find a feedback effect between the real and the financial sector that helps to explain intra- national differences in output per capita. Luintel and Khan (1999) using the VAR technique on

10 developing countries with yearly data from the 1950s to the mid-1990s find two co- integrating vectors identified as long-run financial depth and output relationship linking financial development to economic development. They also find causality between the level of financial development (depth) and growth in per capita income in all sample countries. This confirms the findings of Demetriades and Hussein (1996) who, with data on 16 developing countries, with 30 to 40 yearly observations from the 1960s, find that in most countries evidence favours bi- directional causality and in quite a few countries economic growth systematically causes financial development.

Also Shan, Morris and Sun (2001), using quarterly data from the mid-70s to 90s for 9 OECD countries, find evidence of reverse causality, namely from growth to financial development, in some countries and bi-directional causality in others, but no evidence of one-way causality from financial development to growth.

Allessandra (2010) further argued the fact that many time-series studies yield unreliable results due to the short time spans of typical data sets cannot be ignored. It was for this reason that Christopoulos and Tsionas (2004) analyze 10 developing countries but resorted to a panel context that increases the sample size. With panel unit root tests and panel  co-integration analysis the authors find a single a unique co-integrating vector, implying one-way causality from financial development to economic growth. From the foregoing, it seems that despite  works on the contrary, there is a broad consensus that financial development spurs economic growth.

 

      Statement of the Problem

Economic growth has long been considered an important goal of economic policy with a substantial body of research dedicated to explaining how this goal can be achieved. One of the earliest works on banking performance and economic growth was by Schumpeter (1959) who argued that financial (banking) services are paramount in promoting economic growth. In his view production requires credit to materialize and one can only become an entrepreneur by previously becoming a debtor. What the entrepreneur first wants is credit. The entrepreneur according to Schumpeter, is the typical debtor in a capitalist society.

Based on this strong background laid by Schumpeter, a lot of empirical works have been conducted especially in advanced economies to ascertain the relationship between banking sector performance and economic growth. Most of these empirical studies focused on explanatory variables selected on the basis of their relevance to policymakers or because of other theoretical predictions (see for instance, Barro, 1991; Levine and Renelt, 1992). Indeed, it could be said that empirical literature/works on the purported relationship between banking sector performance and economic growth is broad in advanced economies; transition economies of Central and Eastern Europe and the Baltics.

In Nigeria, empirical works that focused explicitly on banking sector performance and economic growth have yielded mixed results. Some of these works suggest that banking sector performance has impacted positively and significantly on economic growth (see;  Adelakun,2010) while others reported an insignificant relationship between banking sector performance and economic growth (see. Ekpeyong & Acha,2011; Odeniran & Udeaja,2010 ). A major problem in these works are the authors’ selection of explanatory variables that do not explicitly underpin banking sector performance. An example is Balogun’s (2007) work on banking industry performance and the Nigerian economy where bank branches were used as one of the explanatory variables in his modelling. Given multiple channels of accessing banking services such as internet banking; telephone banking; mobile banking; and use of automated teller machines and point of sale machines; the relevance of the number of bank branches as a determinant of economic growth is clearly uncertain. Therefore, a case can be made for a more robust empirical modeling with variables that are more broad based and that underpin actual banking performance.

 

Ayadi et., al. (2013) also suggest that financial development has been intensively studied in developed countries, with result indicating a strong and positive relationship between growth and financial sector development. They also affirm that studies in developing countries are sparse and where they exist, tend to support a negative and insignificant relationship between banking sector performance and economic growth. Given the foregoing, there still exist a research gap for an empirical evaluation of the impact of banking sector performance on economic growth using more robust and broad based explanatory variables.

 

      Objectives of the Study

The overall objective of this study is to investigate Financial system and its effect on Nigeria Economy. The study strives to accomplish the following specific objectives:

 

  1. To evaluate the impact of bank credit on economic growth in

 

  1. To appraise the impact of growth in liquid liabilities (M2) of banks on economic growth in
  2. To ascertain the impact of Net Interest Margin in banks on economic growth in

1.4. Research Questions

The following questions will aid the research objectives:

 

  1. How far does bank credit advancing have effect on economic growth in Nigeria?

 

  1. To what extent does growth in liquid liabilities of banks have effect on economic growth in Nigeria?
  2. How does Net Interest Margin in banks affect economic growth in Nigeria?

 

      Research Hypotheses

Based on these objectives, the following hypotheses were formulated:

 

  1. Bank credit does not exert positive and significant impact on economic growth in Nigeria.

 

  1. Growth in liquid liabilities of banks does not exert positive and significant impact on economic growth in
  2. Net Interest Margin of banks does not exert positive and significant impact on economic growth in
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Sep 19

ASSESSMENT OF NPOWER IN REDUCING UNEMPLOYMENT IN NIGERIA

ABSTRACT:

The study examined the assessment of N-power in reducing unemployment in Nigeria. Rivers State were carefully selected to represent the entire population of Nigeria . Survey design was used in this study to generate data. A sample of 400 respondent youths was studied. After going through them 381 copies (i.e. 95.25% response rate) were found useful for the data analysis. Descriptive and inferential statistics were used to analyse data in this study. Pearson’s Product Moment Correlation Co-efficient (r) was used to test the hypotheses. The study found that the major N-Power programmes used towards unemployment alleviation in Rivers State included: N-Power Teach, N-Power Build, N-Power Creative, N-Power Agro, N-Power Tech Software N-Power Tax, N-Power Health and N-Power Tech Hardware. The study revealed that N-Power Programmes’ beneficiaries were mainly university and polytechnic graduates. The study found that the major factors that affected the implementation of N-Power programmes included: Insufficient information, non-payment of stipend to participants as at when due, bribery and corruption, wrong bank verification number (BVN), overbearing hands of politicians in the programme etc. It is evident and conclusive that: There is significant relationship between N-Power programmes and unemployment alleviation in Rivers State and there is significant relationship between N-Power programmes and empowerment of the youths in Rivers State. The study therefore recommends that the authorities concerned should promote rural development through N-Power programmes. Also, government at all levels should reactivate moribund industries and enterprises and expand the horizon of N-Power programmes in that direction.

CHAPTER ONE

INTRODUCTION

Background to the Study

Indeed, the N-Power programme has become a household name and has continued to generate some controversy, although the government is living up to its billing in addressing concerns raised in association with the programme. Explaining the rationale behind the programme, a highly placed government official says, the N-Power Programme of the Federal Government is a job creation and empowerment initiative of the Social Investment Programme, designed to drastically reduce youth unemployment in Nigeria (Obadan, 2017). The focus is to provide our young graduates and non-graduates with the skills, tools and livelihood to enable them advance from empowerment to empowerment, entrepreneurship and innovation.

 

Perhaps to further demonstrate the fact that it was aimed at addressing the challenges of empowerment, it forerunners categorized it into Graduate Teachers Corps which targeted 500,000 graduates recruitment, N-Power Knowledge targeting 25,000 non-graduates recruitment and N- Power Build which targets 75,000 nongraduates’ recruitment. It was gathered that the 500,000 graduates under the N-Power Corps programme will get computing devices that will contain information necessary for their specific engagement, as well as information for their continuous training and development. Participants are to provide teaching, instructional, and advisory solutions in 4 key areas namely agriculture, health, power tech and community education (Obadan, 2017).

 

The N-Power Agro volunteers are meant to function as intermediaries between research and farmers. They operate as facilitators and communicators, helping farmers in their decision-making and ensuring that appropriate knowledge is implemented to obtain the best results on farms. Through the N-Power Health programme, young graduates who form part of the 500,000 N-Power Corps members are trained to work as public health assistants.They teach preventive health to community members including pregnant women, children, families and individuals. They are also trained to provide basic diagnostic services (Aderonmu, 2017).The N-Power Teach programme engages qualified graduates for the benefit of basic education delivery in Nigeria. They are deployed as teaching assistants in primary and secondary schools across Nigeria. They are not to replace the current teachers, but are to work as support teachers, assisting with teaching, school management and other functions within the schools. They assist in taking basic education to children in marginalized communities (Aderonmu, 2017).

 

There is also the N-Power Knowledge programme which is the Federal Government’s first step towards diversifying to a knowledge economy. This programme works alongside the planned eight innovation hubs across the country to provide incubation and acceleration of the technology and creative industries. The programme is a ‘Training to Jobs’ initiative, essentially ensuring that participants can get engaged in the marketplace in an outsourcing capacity, as freelancers, as employees and as entrepreneurs (Federal Ministry of Youth Development, 2009).Indeed, the programme is carefully designed in such a manner that if well implemented, can help in further addressing the challenges of empowerment and subsequently, reduce poverty among the youths. But then of course, there appears to be some confusion of some sort in the way and manner the programme is being handled. The programme could not kick off in most states as scheduled. Some of the controversies included the fact that the names released so far are reportedly fraught with ‘ghost names’ (Bennel, 2017).

 

Poverty alleviation remains a major challenge of modern economies around the world today, Nigeria is no exception. Resulting from poor enterprise culture, the poverty alleviation programme in Nigeria is now a major driver of poverty and social vices. The poverty alleviation programmes in Nigeria have assumed multi-dimensional phenomena cutting across all facets of age group, educational strata and geographies. Poverty alleviation programmes are unevenly distributed across the age groups with youth between the ages of 18-35 being the greatest beneficiaries. More disturbing today, is the ever-rising trend of youth unemployment programmes in the country. The effective implementation of the programmes will discourage them from engaging in social vices which constrain in Rivers State. This study therefore seeks to assess  Npower in reducing unemployment

 

Statement of the Problem

 

Some systemic hiccups, including insufficient information and wrong Bank Verification Number (BVN) have been identified as factors threatening to wreck the N-Power programme, introduced by the Federal Government, as a social safety net to reduce the rate of graduate unemployment plaguing the country. Specifically, the programme, which took off in December 2016 year is designed to provide a stopgap for 500,000 unemployed graduates of tertiary institutions over the next two years (Bennel, 2017).While the Federal Government is responsible for their monthly stipends, it is in partnership with state governments to verify selected unemployed graduates and deploy them to their places of primary assignment. Volunteer graduates are expected to serve in the communities where they are resident.

 

Under the programme, the first batch of 200,000 participants are to be paid N30, 000 a month and deployed by the respective state governments and the Federal Capital Territory (FCT) to their different places of assignment, including classrooms as teachers (Federal Ministry of Youth Development, 2009). But some months into the programme has started facing different challenges, with about 13,000 participants alleging that they have not been paid their monthly stipend (Aderonmu, 2017).For instance, the Nigeria Interbank Systems (NIBSS), which provides the technical support for the programme has identified sundry challenges, including failure on the part of the beneficiaries to input correct Bank Verification Numbers (BVN) and other details to match the information initially provided for processing. Funmi Olowosulu, a participant who was posted to LGEA Primary School, Lokoguma, Kogi State, where she teaches, is yet to receive her monthly stipend of N30, 000 three months after enrolling in the programme, because of inconsistency in her personal details, as well as her Bank Verification Number (BVN) (Bennel, 2017).

 

Another beneficiary, Umar Abdulrasheed, who spends N80 daily on transportation to work, has also not received his stipend for the same number of months. Additionally, he is indebted to his neighbours who usually bail him out of financial difficulties in the hope that he would defray same once his stipends are paid. The situation is not different in Rivers, Edo, Enugu and Kaduna states, where participants have protested and called on the Federal Government to come to their aid by addressing the numerous challenges facing the smooth operation of the programme. A good number of participants in the programme are frustrated because their expectations were yet to be met, three months after the programme kicked off (Aderonmu, 2017). Besides, some of the participants are disqualified for various reasons, ranging from being over-age, to falsification of information and being currently gainfully employed. Already, Rivers State government, in collaboration with the Federal Government has embarked on another verification exercise in order to afford those that missed out in the first phase come on board. The efforts on the part of the government in alleviating and eradicating poverty among the youth in Rivers State have paradoxically led to more problems for the youth in the state.

 

Purpose of the Study

 

The purpose of this study is on “assessment of  N-power in reducing unemployment Alleviation in Nigeria”  A study of Rivers State.

 

Specific objectives of the study therefore, are:

  1. To ascertain the activities of N-Power Agency towards unemployment alleviation in Rivers State
  2. To determine the extent to which N-Power programmes generate empowerment for the youths in Rivers
  3. To ascertain how N-Power Programmes alleviate poverty in Rivers
  4. To identify the problems affecting N-Power Agency/programmes

 

Research Questions

 

The following are the research questions of the study which would elicit answers:

  1. What are the activities of N-Power Agency towards employment?
  2. To what extent do N-Power programmes generate empowerment for the youth in Rivers State?
  3. How would N-Power Programmes alleviate poverty in Rivers State?
  4. What are some of problems affecting N-Power programmes towards poverty alleviation in Rivers State?

 

Research Hypotheses

The following hypotheses have been formulated in this study for testing:

H01:     There is no significant relationship between the activities of N-Power Agency/programmes and employement alleviation in Rivers State.

H02:     There is no significant relationship between N-Power programmes and empowerment of the youths in Rivers State.

 

Significance of  the Study

 This study will be of benefit to university lecturers, students, government and the university management. The study will show to them the causes, the effects of unemployment and the need for entrepreneurship education e.g N-power in solving the problem of youth unemployment in Nigeria.

 

To university lecturers, the study will unveil to them the areas to concentrate in the school syllabus in order to develop entrepreneurial minds of students for creative employment and also help the show the need for introducing entrepreneurship education into the school curriculum in Nigeria.

To the parents, the study of their children during child birth and training cannot be determined towards the course of study in higher institution. Lastly, the findings from the study will show to the government the role of entrepreneurship education in solving the problem of youth unemployment in Nigeria.

Definition of Terms

  1. Skills

According to Speelman [2005], a skill is seen as ability to do something well, usually gained through training or experience. Skills are often acquired after a training session or after a practical.

  1. Skills acquisition

Skills acquisition is the ability to learn or acquire skills. It involves the development of a new skill, practice of a way of doing things usually gained through training or experience Speelman [2005].

iii. Unemployment

Unemployment or joblessness, as defined by the International Labour Organization (1982) occurs when people are without jobs and they have actively sought work within the past five weeks. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a%age by dividing the number of unemployed individuals by all individuals currently in the labour force. According to the National Bureau of Statistics (2011), unemployment rate is the proportion of those who are looking for work but could not find work for at least 40 hours during the reference period to the total currently active (labour force) population.

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