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.
Globally, advanced economies showed strong signs of recovery during 2014H1 despite the adverse effect of the severe winter (especially on the United States economy) while economic activities slowed and growth was below projection in emerging and developing economies.
OPEC weekly basket price increased marginally from $45.09 on June 17, 2016 to $45.95 on June 24, 2016, while Nigerias bonny light increased from $47.61 to $48.90 (with a peak of $49.2 on June 23, 2016)within the same period. The rise in oil price, amidst downward pressures, was likely driven by expectations that the UK would remain in the EU. However, price fell (to $47.61) on June 24, 2016 following the outcome of the UK referendum (on June 23, 2016) to leave the EU. This was driven by concerns over a possible contagion effect of further disintegration on the EU (a major oil consumer) which could drive down oil demand in the longer term. In the medium term, oil prices could face further pressure as a result of rising crude oil output and attenuating production disruptions in Canada and Nigeria. Although, the recent rise in oil prices seem transient, Nigeria can benefit from the marginal rise if disruptions in oil production is quickly resolved