Bi-weekly Seminars

August 26, 2013

Political Decentralisation And Natural Resource Governance In Nigeria

The paper discusses Natural Resource
Control and how it is affected by governance in Nigeria with focus on two
oil-producing states. It also examines sub-national accountability in the use
of natural resource revenues.

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  • Nigeria is a federal country with a tripartite administrative structure national govt. + 36 states + 774 local governments, each of which has constitutionally defined functions
  • Since 1999, political decentralisation has given subnational governments greater autonomy over their fiscal affairs
  • Low public accountability very little is known about how subnational governments are using their oil revenues.
  • In the resource-rich Niger Delta, this contradiction between power and unaccountability is most extreme
  • Oil producing states receive 13% monthly oil revenue derivation payments for territorial oil production, in addition to constitutionally entitled revenues
  • This has quadrupled the size of state budgets and expenditures


  • Academic and policy scholarship tends to focus more on centralised than decentralised political corruption in Nigeria
  • Poverty and corruption cannot be addressed without improved sub-national accountability in the use of natural resource revenues



Implementing The Fiscal Responsibility Act At The State Level In Nigeria

Fiscal responsibility acts have become increasingly common tools to enhance fiscal prudence and public expenditure transparency in many countries. In Nigeria, fiscal profligacy at the sub-national level has emerged as a major contributor to state corruption and macroeconomic instability.

Nigeria Economic Update (Issue 23)

Recent Data on Nigerias Real GDP growth rate (Year-on-Year) declined by 2.47 percentage points, from 2.11 per cent in 2015Q4 to -0.36 percent in 2016Q11. This is the lowest GDP growth rate since 2004Q2 (-0.81 percent). The Oil sector continued to contract, as -1.89 percent growth was recorded in 2016Q1. The negative growth witnessed in the oil sector was likely driven by the fall in global oil prices by $9.732 and decline in domestic crude oil production, relative to preceding quarter. Similarly, the Non-oil sector witnessed a negative growth as it declined by 3.32 percentage points from 3.14 percent in 2015 Q4 to -0.18 percent in 2016Q1. The underperformance in the non-oil sector was driven by significant contractions in financial (by 17.69 percent), manufacturing (by 8.77 percent), and real estate (by 5.48 percent) sub-sectors. Given that the present economic fundamentals point to a likely recession in 2016Q2, the government can stir economic activities by speeding up the budget implementation process to spur growth in the non-oil sector and the economy at large. More so, the domestic production shock in the oil sector needs to be addressed to effectively leverage on the present marginal rise in crude oil prices.

Portfolio Diversification Between Developed And Less Developed Economies

This study examines the hedging effectiveness of portfolio investment diversification between developed and developing economies; with focus on the Nigerian stock asset vis--vis the stock assets of the United States (US) and United Kingdom (UK). Its main contribution is in the analysis of optimal portfolio diversification using optimal portfolio weight (OPW) and optimal hedging ratio (OHR). Empirical findings show that the OPW and OHR are low, which indicates impressive potential gains from combining Nigerian stock assets in an investment portfolio with US and UK stock assets. In addition, exchange rate volatility is found to pose stern limitation on the potential benefits of this portfolio diversification arrangement. It is therefore recommended that the monetary authority in Nigeria should pursue policies towards reducing exchange rate volatility to the barest minimum. This will possibly attract more investors from developed economies who might be willing to combine Nigerian stock in their investment portfolio to minimize portfolio risk.

Net Foreign Exchange Flows Through The Nigerian Economy

Net Foreign Exchange Flows through the Nigerian Economy: The recent fall in foreign exchange earnings reflects the decline in both oil sector receipts from CBN, and non-oil sector inflows from autonom