Browsing by Author "Kanang Amos Akims"

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    Does the mode of financing the budget deficit matter for inflation in Nigeria
    (African Journal of Economic and Management Studies, 2025) Musa Abdullahi Sakanko; Kanang Amos Akims; Stephen Salawu Gana
    Purpose The motivation for this study is to determine whether inflation in Nigeria is driven by the Central Bank’s direct advances and Treasury bills/bonds as modes of financing the budget deficit. Hence, it examines whether the method of deficit financing significantly impacts inflation in Nigeria. Design/methodology/approach Based on the nature of the study and the availability of data in Nigeria, this study employs the ARDL bound test estimation technique to analyse annual time-series data from 1981 to 2021. Findings The ARDL bounds test approach to co-integration revealed a long-run co-integrating relationship between Central Bank advances, Treasury bills/bonds, and inflation in Nigeria. Furthermore, the ARDL results provide evidence of a negative and significant relationship between bonds and inflation in both the short and long run. In contrast, Central Bank advances exhibit a statistically significant direct effect on inflation in the short run and an indirect effect in the long run. Research limitations/implications The study focuses solely on Nigeria, limiting the applicability of the findings to other nations with differing economic structures or fiscal policies. Secondly, while the ARDL bounds testing approach is appropriate for the research context, it may not capture complex nonlinear relationships or structural breaks within the dataset. Lastly, the exclusion of additional potential determinants of inflation, such as external shocks, geopolitical factors, or exchange rate dynamics, could restrict the comprehensiveness of the analysis. Practical implications This study provides empirical evidence supporting the view that, to achieve lower inflation in Nigeria, policymakers should prioritize using bonds to finance the deficit budget, as they have been shown to have a short-and long-term deflationary effect on the economy. Originality/value The novelty of this study lies in categorizing deficit budget financing (Central Bank advances and Treasury bills) and identifying which has the greatest impact on inflation in Nigeria.
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    Monetary Policy and Nigeria’s Trade Balance, 1980-2018
    (Signifikan: Jurnal Ilmu Ekonomi, 2021) Musa Abdullahi Sakanko; Kanang Amos Akims
    Several countries have integrated monetary easement into their foreign policy to faucet the gains from trade thereby, assuring that market forces determine monetary policy instruments such as interest rate and exchange rate. It is on this note and this paper empirically evaluate the effect of monetary policy on Nigeria’s trade balance using the Autoregressive Distributed Lag Model on the time series data spanning from 1980 to 2018. The findings reveal that monetary policy tools of real interest and effective exchange rate have a longrun co-integration relationship and significant adverse effects on Nigeria’s trade balance both in the short-run and long-run. Thus, the paper concludes that monetary policy is a veritable tool through which Nigeria can maintain a favorable trade balance. Therefore, policymakers should step on measures that will maintain low-interest rates to sustain a flexible exchange rate and remove all rigidities associated with the international payment system.