January 22, 2016

Trade And Foreign Direct Investment Nexus In West Africa: Does Export Category Matter?

This paper examines the effect of inward FDI in
West Africa on exports to EU countries. It investigates from a host country
perspective, the impact of FDI on different export categories: primary,
intermediate, and final goods.

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Trade and Foreign Direct Investments are the key
divers of economic integration and the globalization process. The widely held
view is that both trade and FDI are beneficial, as the former can stimulate
innovation, productivity, competitiveness, and diversification; and the latter
increases the capital stock, provides new job opportunities, and promotes the
transfer of technology. Thus there have been profound calls within
international organizations for developing countries to encourage both trade
and FDI in order achieve robust economic growth and development. However, critics argue that trade, particularly imports, can
create undue competition and stifle indigenous manufacturing; and inward FDI
can also displace domestic firms. Similarly, from a source country perspective,
outward FDI can lead to loss of jobs as multinationals move job opportunities



Nigeria Economic Update (Issue 51)

Recently released data by the National Bureau of Statistics (NBS) shows that there was significant increase in Nigerias total merchandise trade for 2016Q3. Basically, the total merchandise trade increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil exports increased by 31 percent to N1, 943 billion, while non-oil exports increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria recorded yet another trade deficit of N104 billion, indicating continuous higher imports relative to exports. Overall, though there is improvement in the performance of non-oil sector, however, this is insufficient to effectively complement the loss in oil trade sustained since the beginning of oil price crash. This suggests that diversification into non-oil sector may not be able to rescue the economy in the short term. However, while the diversification efforts should be sustained, eliminating hurdles in oil production may be instrumental to higher exports, especially as oil price increase is gaining momentum.

Re-examining The Determinants Of Current Account Balance In An Oil-Rich Exporting Country

The paper examines the determinants of current accounts balance in Nigeria with emphasis on oil-related variables.