Publications

December 10, 2010

Foreign Aid And The Real Exchange Rate In The West African Economic And Monetary Union

This paper examines the relationship between foreign aid and the real
exchange rate to determine how the competitiveness of the West African Economic
and Monetary Union (WAEMU) is affected by foreign aid.

Download Label
March 13, 2018 - 4:00 am
application/pdf
1.35 MB
v.1.7 (stable)
Read →


Author:Eberechukwu Uneze

Publication Date: September, 2010

JEL Classification: C23, F31, F35

Key words: Foreign Aid; Real Exchange Rate; Pooled Mean Group

Document Size: 38 pages


The aim of this paper is to re-examine the relationship between foreign aid andthe real exchange rate, using the recent econometric methods developed for nonstationarydynamic panels and an estimator that imposes a weaker homogeneityassumption on the slope coefficients. The investigation shows that foreign aid ledto an appreciation of the real exchange over the period 1975-2005. In addition,the paper finds that other variables, such as labour productivity (a proxy forBalassa-Samuelson effect), terms of trade improvement, and governmentconsumption of non-tradable goods are also associated with an appreciation ofthe real exchange rate. To avoid an appreciation of the real exchange rate and adecline in competiveness, we recommend that WAEMU countries use foreignexchange from aid inflows to import capital goods, which will not only lead toexport expansion, but also to faster economic growth.




Related

 

Nigeria Economic Update (Issue 22)

Available data from Nigeria Bureau of Statistics shows a decline in the Nigeria Aviation sub-sector (Transport Sector) real growth rate in 2017Q1. Compared to the preceding quarter, the sub-sector declined significantly by 9.6 percent, due to decline in the number of passengers and movement of aircrafts this may be connected to the closure of the Abuja airport for infrastructural development during the period. To ensure a near-optimal performance of the aviation sector, the government should also make efforts to improve aviation safety and security, establish a national carrier, and improve aircraft maintenance to world class standards.  

Public Spending On Education And Health In Nigeria

The paper conducts a Benefit Incidence Analysis to determine if public expenditure in education and health sector in Nigeria is pro-poor or pro-rich.

Nigeria Economic Update (Issue 40)

Global crude prices settled lower in the review week (September 29 to October 6, 2017). Precisely, a barrel of Brent crude sold for about $56, showing a 6.3 percent decrease. Nigerias Bonny light exchanged at $56.76 per barrel as at October 6, 2017. The draw down in price may be attributable to indications of higher output, as revealed by the addition of more production rigs by the U.S, rise in Iraqs crude exports and survey showing OPECs overall boosted supply.