Access to finance has been considered to be one of the important factors in influencing firms’ real activities and in promoting aggregates. However, literature on the relationship between finance and firm-level productivity is almost non-existent for African countries. This paper fills this gap by using cross-sectional firm-level data to estimate the effect of access to finance on labour productivity, total factor productivity (TFP), and the stochastic frontier trans-log model. This study also estimates an instrumental variable model – two-stage least square estimator to address potential endogeneity bias between access to credit and firms’ productivity. The results obtained show that the lack of access to finance, especially overdraft facilities negatively affects the productivity of firms in Africa. Also, smaller firms and sole-proprietorships are mostly affected because they have less access to finance. This study suggests that the development of a balanced financial system should be of topmost priority to policy makers. This ensures that more finance is channelled towards those firms whose productivity depends heavily on the availability of finance irrespective of their characteristics. This would result in firms increasing their investments in productivity-enhancing activities, which would benefit long-term economic growth.
Recent Data released by the Nigeria Bureau of Statistics reveals an increase in total public debt stock between 2015 and 2016. Foreign and domestic debt stock stood at $11.4 billion and N14.0 trillion respectively as at December 2016, from $10.7 billion and N10.5 trillionrecorded as at December 2015. Disaggregated data shows that foreign debt sources comprised Multilateral ($8.0 billion), Bilateral ($0.2 billion) and Exim bank of China ($3.2 billion); domestic sources included government bonds, treasury bills and bonds. The federal government and states accounted for 68.7% and 31.3% respectively of foreign debt stock; 78.9% and 21.1% respectively of domestic debt stock. This maybe particularly at the backdrop of government borrowings in 2016 to finance its expenditure (mostly recurrent).
The falling tide in the international value of Naira experienced a reversal in the review week with naira appreciating significantly by 11 percent from N516/$ on February 17, 2017 to N460/$ on February 24, 2017 at the parallel market the first appreciation since December 2016. The recent rise in naira value was driven by forex supply-demand gap closure, sequel to improvements in dollar liquidity. The recent CBN Special intervention (e.g. the auction and sale of $370 million and $1.5 million respectively, by the apex bank during the week) and its revised forex policy guidelinescontributed in dousing speculations in the parallel market, thus gradually narrowing the margin between the interbank and parallel market rates. Given that the sustainability of naira appreciation is strongly hinged on the improvement in foreign reserve which is largely dependent on crude oil sales, the government should continue its efforts at calming tensions in the Niger Delta region.
Capital Importation And Gross Domestic Product Growth Rate And Contribution To GDP (Construction Sector)
Capital Importation: Capital expenditure into the construction sector remained above 10 percent since 2005 until 2015. Similar to the manufacturing sector, overall capital imported into the constructi