Publications

The Monetary Policy Committee of the Central Bank of Nigeria (CBN) retained the Monetary Poli-cy Rate (MPR) at 11.5 percent, as well as all other monetary parameters, at the first meeting of the Central Bank of Nigeria (CBN) for 2022, held on the 24th and 25th of January. Specifically, the Cash Reserve Ratio (CRR) was retained at 27.5 percent, the Liquidity Ratio was retained at 30 percent, and the asymmetric corridor of +100/-700 basis points around the MPR was also retained. The de-cision to retain all the parameters was aimed at supporting the existing economic growth recovery and curbing the increase in prices. However, inflation persistence in the country has continued to emanate from supply-side constraints which monetary policy may be unable to mitigate. It there-fore becomes necessary for the government to leverage fiscal policy in order to improve the ease of doing business and boost aggregate supply. Unconventional monetary policies should also be scaled up to enhance productivity in both the agricultural and manufacturing sectors. This in turn would ease the pressure on the exchange rate, which would further dampen price levels.

On behalf of the Federal Government, the Debt Management Office (DMO) issued a N250 billion sovereign sukuk bond between the 16th and 23rd of December 2021, with a 346 percent subscription rate worth over N865 billion.¹ The sovereign sukuk bond has a tenor of ten (10) years at a rental income of 12.80 percent per annum to be paid semi-annually.  An analysis of the subscription data showed more diverse participation by investors, with high levels of subscription from banks and fund managers (including pension funds), as well as non-interest financial institutions, ethical funds, cooperative societies, and retail investors. This reveals that the DMO’s objectives of issuing sovereign sukuk bonds to grow the domestic investor base and promote financial inclusion is being achieved. The agency has reaffirmed that the proceeds of the N250 billion sovereign sukuk bond will be used to continue financing the rehabilitation and reconstruction of critical economic road projects across the six (6) geopolitical zones and the Federal Capital Territory. Given its observable impact on road infrastructure in terms of job creation, travel time, safety, and movement of goods, the sukuk bond has proven to be a beneficial instrument for financing economic growth and development. If duly implemented, the projects would reduce the cost of transportation, create more access to markets, lower commodity (especially food) prices, and also improve the country’s overall business environment. 

According to the National Bureau of Statistics (NBS), Nigeria's headline inflation rate increased on a month-on-month basis, from 15.40 percent in November 2021 to 15.63 percent in December 2021¹. This represents a 1.8 percent increase, breaking an eight-month streak of headline inflation declines since April 2021. However, on a year-on-year comparison, the headline inflation rate decreased by 0.13 percent from 15.75 percent recorded in December 2020. The in-creased rate of inflation recorded in December is largely attributed to the increase in aggregate demand as a result of the festive season. Expectations are that the rate of inflation for January would decline due to lower demand levels. However, a double-digit inflation rate translates to lower purchasing power, which also translates to a lower quality of life. It is, therefore, important that policies aimed at improving aggregate supply be prioritized. This can be achieved by leveraging and scaling up the real sector intervention programs of the Central Bank of Nigeria (CBN), improving economic infrastructure to boost productivity, and improving national security to address the sub-optimality in agricultural productivity.

This study examines the relationship between income diversification and agricultural intensification of rural households in Nigeria, using panel data models. We use the Inverse Herfindahl Index (IHI) to measure the income diversification options, while the relationship with agricultural intensification was measured using random effect instrumental variable regression. A control function approach was used to control for the potential endogeneity of the covariates. Empirical findings of this study indicate that income diversification is increasing among Nigerian rural households. This study finds that among other factors, off-farm income has a positive relationship with agricultural intensification. This study recommends, as a policy measure, that households should not only be encouraged to diversify their income, but should also transmit productivity gains from such diversification into agricultural intensification for the betterment of the rural economy.

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Social media platforms are increasingly shaping many aspects of our cultural, political, and economic decisions, including entrepreneurship, migration, trade, fashionomics, investment, mobility, education, and health. Most enterprises categorize their social media efforts and performance as a form of public relations due its level of brands and consumer interactions. Thus, the unique nature of social media disallows the lag time of old-fashion and conventional media, thereby allowing for immediate response and interaction with public which in turn enhance brand. Consequently, individuals’ profiles with large followings have been used as endorsers, influencers, and brand ambassadors.
Based on this background, the study examines the entrepreneurial engagement of selected African influencers’ followers, then analyze the content with the most engagements with focus on food choices and food systems. This research will deploy both deidentified individual-level data and publicly available aggregated entrepreneurship data on social media among African countries. The findings from this study will inform African governments and policy makers on effective strategies for optimizing social media platforms for understanding followers’ food choices and digital entrepreneurship and among women in the COVID-19 pandemic era.

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The Nigerian National Petroleum Company (NNPC) Limited remitted N511.7 billion to the federation account between January and October 2021, against the projected sum of N2.09 trillion, resulting in a shortfall of N1.58 trillion.³ This is according to data obtained from the NNPC. The shortfall can be attributed to two main factors: low revenue generation by NNPC limited and huge deductions. From the data, the projected revenue from January to October was N4.15 trillion whereas revenue generated was N2.77 trillion, indicating revenue shortfall of about 33.3 percent. Remittance to the federation account was plunged by deductions, which was N2.26 trillion, and represented 81.6 percent of gross revenue. The highest deduction was under-recovery of PMS/Value shortfall (subsidy), which was N1.03 trillion, and contributed about 37.2 percent of total deductions. Given the importance of NNPC limited remittance to federal account, the shortfall signals a potential crisis as most states are highly dependent on the monthly allocation from the FAAC. The situation suggests that states need to implement strategies that would boost their internally generated revenue to cover growing fiscal obligations. At the federal government level, the government should leverage on the petroleum industry act, which stipulate that petroleum subsidy ends by February 2022. With less than three months to go, the government is expected to intensify engagements with relevant stakeholders on the economic impact of petroleum subsidies and to specify how the saved funds will be used. Also, given that the subsidy removal would hurt the poor through increased transportation cost, the government is expected to design framework on how the proposed social interventions would mitigate potential welfare losses associated with subsidy removal. These interventions are expected to improve revenue available to the government for productive investments, which in turn, would bolster the rate of economy recovery from the pandemic.

The Nigerian National Petroleum Company (NNPC) Limited remitted N511.7 billion to the federation account between January and October 2021, against the projected sum of N2.09 trillion, resulting in a shortfall of N1.58 trillion.³ This is according to data obtained from the NNPC. The shortfall can be attributed to two main factors: low revenue generation by NNPC limited and huge deductions. From the data, the projected revenue from January to October was N4.15 trillion whereas revenue generated was N2.77 trillion, indicating revenue shortfall of about 33.3 percent. Remittance to the federation account was plunged by deductions, which was N2.26 trillion, and represented 81.6 percent of gross revenue. The highest deduction was under-recovery of PMS/Value shortfall (subsidy), which was N1.03 trillion, and contributed about 37.2 percent of total deductions. Given the importance of NNPC limited remittance to federal account, the shortfall signals a potential crisis as most states are highly dependent on the monthly allocation from the FAAC. The situation suggests that states need to implement strategies that would boost their internally generated revenue to cover growing fiscal obligations. At the federal government level, the government should leverage on the petroleum industry act, which stipulate that petroleum subsidy ends by February 2022. With less than three months to go, the government is expected to intensify engagements with relevant stakeholders on the economic impact of petroleum subsidies and to specify how the saved funds will be used. Also, given that the subsidy removal would hurt the poor through increased transportation cost, the government is expected to design framework on how the proposed social interventions would mitigate potential welfare losses associated with subsidy removal. These interventions are expected to improve revenue available to the government for productive investments, which in turn, would bolster the rate of economy recovery from the pandemic.

According to the National Bureau of Statistics (NBS) latest report on Value-Added Tax (VAT), there was a 17.8 percent year-on-year increase in VAT revenue in Q3 2021. However, on a quarter-on-quarter basis, there was a 2.3 percent decrease.¹ VAT collected in Q3 2021 was N500.4 billion. This was lower than the VAT revenue generated in Q2 2021 which stood at N512.3 billion. In Q3 2020, VAT was N424.7 billion. The quarter-on-quarter decline in VAT collection was mainly caused by the sharp decline in non-import (foreign) VAT, which contracted by 60.9 percent, thereby eroding the increase recorded in non-import (local) VAT and Nigeria Customs Service (NCS) Import VAT, which both grew by 57.6 percent and 5.7 percent, respectively. The increase in the non-import (local) VAT indicates that the recent debate on who has the constitutional right to collect VAT has minimal impact on total VAT collection. Further, the year-on-year increase in VAT also reflect a growth in economic activities. The current fiscal position of the government suggests that all available revenue sources are maximized. Therefore, in order to optimize revenue generated from VAT, it becomes imperative that the coordination issue associated with VAT collection is addressed.

There is a growing literature trying to explain differences in African citizens’ preferences towards democratic and non-democratic political institutions. Diamond et al. (1999), Evans and Whitefield (1995), and Kitschelt (1992) argue that satisfaction with government’s effectiveness and economic performance (Individual and national economic situations) are the main determinants of the observed differences. Krieckhaus et al. (2014) propose that the current understanding of support for democratic institutions would benefit from incorporating national economic inequality as a key driver since it can generate disillusion with electoral politics leading to less trust in democratic institutions (Karl, 2000; and McClintock, 1999). Moreover, wealthier citizens often support democratic institutions because they possess the economic and cognitive resources to pursue the “luxury goods” of democratic governance and can benefit
from State capture more than the poor (Bratton, Mattes, and Gyimah-Boadi, 2005; and Welzel and Inglehart, 2008).

A strand of theoretical literature suggests that in a country with high ethnic inequality, the population of the lower income quintile will support democracy as a mechanism for redistribution1. However, the existing literature does not empirically analyze how ethnic inequalities influence support and consolidation of democratic institutions. This paper improves on existing literature in two ways. First, we empirically show that individuals support for democracy is affected by levels of ethnic inequality. Second, by considering both Between ethnic group inequality (BGI) and Within ethnic group inequality (WGI), we explore how their interaction affects individual preferences for democratic institutions. The rest of the paper is organized as follows. Section 2 provides a literature review on ethnic inequalities in political science. Section 3 provides data description and the empirical framework. Section 4 focuses on the results,
while section 5 provides the conclusions drawn from the study.

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