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 36)

Power sector statistics show a significant increase in power generated from August 12 to August 19, 2016. Precisely, power generated increased by 2.2 percent to 3953.6MW(a 4-month high). Increased water reserves in dams for hydro generating plants occasioned by seasonal adjustments (rainy season), led to improved power generation. Additionally, in a bid to further improve and sustain power generation, the federal government received a $100 million credit facility from India. However, consistent power supply could be jeopardized if the development is not aided by improved distribution by DISCOs.

Job Creation In Nigeria: Challenges, Opportunities And The Role Of Micro, Small And Medium Enterpris

This paper identifies the challenges of job creation in Nigeria and examines governments approach using the Micro, Small and Medium Enterprises to support Economic reforms.