Policy Brief & Alerts

November 17, 2011

Program Budget Analysis Of Nigeria’s Federal Government Expenditure in the Education And Health Sectors

brief aims to deepen stakeholders understanding of the sources of funding and
how money is allocated to and spent in the social sectors of health and
education, which are critical for pro-poor growth and poverty alleviation.

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This policy brief discusses how the public expenditure benefits the rich more thanthe poor. The full study analyses the incidence of public expenditures in the Nigerianeducation and health sectors revealing that more of children enrolled in primaryschools are from poor households. This is in contrast to public expenditure onsecondary and tertiary education which benefits richer households. Further analysisin the health sector show that the poorest households were the least likely to reportsickness and seek treatment, making them minority users of the government healthservices. The wealthiest households, however, are the main users of health facilities.Another analysis known as progressivity and targeting test, was carried out usingbenefit concentration curves for both sectors. The results show that Nigerias in-kindsubsidy is poorly targeted.




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.

Public Debt In A Growing Economy And Implications For The Nigerian Case

The paper analyses the impact of public debt on an economy using Nigeria as case study and identifies steady states in the model of a closed economy.