Department of economics and development studies, federal university oyeekiti, nigeria and department of economics college of education, ikereekiti, nigeria abstract. In this research work on the effect of sustainable infrastructural development on economic development of nigeria. Mba 2011, foreign private investment, capital formation and economic growth in nigeria. Strategies for enhancing and promoting capital formation. Some literature pahlavani et al 2006 carried out some research works on the role of capital formation and savings in promoting economic growth in iran. Structural transformation and capital formation in nigeria. Human capital development african development bank. This study concentrates on capital flight and external debt in nigeria. In addition, the regulatory process must be carried. The objective of the study is to determine the impact of the capital market on real sector growth in nigerian economy. Impact of capital formation on the economic development of. Human capital development and its impact on firm performance. The rate of capital formation is reduced by capital flight and this adversely affects the countrys current and future prospects.
An examination of cbn reports shows that nigerias gross fixed capital formation was 11. Nigeria gross fixed capital formation 20072019 data 2020. They showed that gdp, population, inflation and foreign direct investment are significant determinants of. Pdf the study investigates the influence of capital accumulation on economic growth in nigeria. Accepted 18 september, 2017 abstract this study explores the relative impact of human capital formation on economic growth in nigeria from 1981. Savings, gross capital formation and economic growth nexus in. State formation is the process of the development of a centralized government structure in a situation where one did not exist prior to its development. Capital in growththeoretic models and growth regressions. Determinants of the rate of unemployment in nigeria. Adf test was applied to determine the stationarity of the variables and all the variables were integrated at order one i1. These questions have been at the centre stage of a debate sparked off in the late 1980s. Capital formation does not have a significant impact on real sector growth in nigeria. The central objective of the study is to empirically investigate the role of nigerian banks in capital formation and economic growth. In other words, capital formation involves making of more capital goods such as machines, tools, factories, transport equipment, materials, electricity, etc.
Umuedafe department of agricultural economics, delta state university, asaba campus, nigeria abstract. The role of banks in capital formation and economic growth. Learn how the world bank group is helping countries with covid19 coronavirus. View enhanced pdf access article on wiley online library html view download pdf for offline viewing. These are not simply costs but investment with valuable returns that can be calculated. The paper applied harrod domar model to nigerian economic development model and tested if it has a significant relationship with nigerian economy.
Developing nigeria s human capital is critical especially now that the country is aspiring to be among the 20 leading economies in the world by the year 2020. This pdf is a selection from an outofprint volume from the national bureau of economic research. After the british government assumed direct control of the royal niger companys territories, the northern areas were renamed the protectorate of northern nigeria, and the land in the niger delta and along the lower reaches of the river was added to the niger coast protectorate, which was renamed the protectorate of southern nigeria. Capital formation is the process of building up the capital stock of a country through investing in productive plants and equipments. They were called eastern region, western region and northern region. Capital formation, in other words, involves the increasing of capital assets by efficient utilization of the available and human resources of the country. With a population bigger than any other continents, africa has a huge asset and a strong competitive advantage. Bakare 2011 using data spanning from 1979 2009 found the presence of a significant relationship between capital formation and economic growth in nigeria. The model was subjected to cointegration test to determine the long run relationship between capital formation, and economic growth in nigeria for the period of 19802016. The economies of all marketoriented nations denend o. Capital formation in indian agriculture economic and. It was ascertained that in the short run, gross fixed.
It is a specific statistical concept, also known as net investment, used in national accounts statistics, econometrics and macroeconomics. This paper revisits this debate by dissecting different components of capital formation, by digging into the very concept and estimation procedures followed in the indian system of. The determinants of secular trends and of persistent international differences in the level of capital formation, therefore, became he specific subject of the meeting. Capital formation is a concept used in macroeconomics, national accounts and financial economics. The impact of infrastructural development on the gross fixed capital formation gfcf of nigeria. Jul 01, 2019 capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country, and the term refers to additions of capital stock, such as.
The impact of foreign direct investment on capital formation. Abstract the impact of capital formation on the economic growth of nigeria was studied using multiple regressions technique. Farmers cooperatives and agricultural development in kwali. Capital formation in the nigerian capital market and its effect on economic growth. Infrastructure development and economic growth nexus in. This study explores the relative impact of human capital formation on economic growth in nigeria from 1981 to 2014 using time series data of thirty four 34.
The researcher examined the effect of sustainable infrastructure on the gross domestic product gdpof nigeria. Effect of sustainable infrastructural development on economic. Infrastructure development and economic growth nexus in nigeria. Pdf effect of capital formation on economic growth in. Monetary policy and capital formation jaihoon yang the year 1776 gave birth not only to a great nation but also to a great book which shaped our science. Pdf capital formation and economic growth in nigeria. Domestic investment, capital formation and population. The data were collected from central bank of nigeria cbn.
Pdf on jan 10, 2017, nweke onyinye and others published effect of capital formation on economic growth in nigeria find, read and cite all the research you need on researchgate. Africa, nigeria s external debt stock follows an upward pattern over the years while the former is relatively stabilized ayad and ayadi, 2008. But this aspiration will be a venture in futility so long as human capital formation is not accorded high priority. Real sector, gross fixed capital formation and the nigerian. This paper revisits this debate by dissecting different components of capital formation, by digging into the very concept and estimation procedures followed in the. The impact of foreign direct investment on capital. Time series data were sourced from central bank of nigeria.
Real sector, gross fixed capital formation and the. The african development banks human capital strategy aims to harness the potential of 1 billion africans through skills development and investments in new technologies to promote quality jobs and workforce competitiveness. The analysis discovered that there is a significant positive relationship between capital formation and economic growth in nigeria both in the shortrun and longrun. Capital formation meaning and definition sources of. Banks are an indispensable element in these system. To analyze the impact of banks deposit mobilization on capital formation and economic growth in nigeria. Owing to the creation of these two states, nigeria was, therefore, made up of twentyone states in the year 1987. The impact of monetary policy on private capital formation in. The data were collected from central bank of nigeria cbn statistical bulletin 2011. Investm has not translated into capital formation and has not aided growth in nigeria. The data was generated from cbn statistical bulletin, ols method of estimation was adopted for the analysis of the data generated. In his wealth of nations, adam smith made growth in income the central explanandum of his inquiry and identified capital formation as the prime mover of growth in income. This paper investigated the relationship among savings, gross capital formation and economic.
Pdf the paper investigated the impact of capital formation on economic growth in nigeria. Nigeria gross fixed capital formation 20072019 data. Nigeria is the most populous country in africa and accounts for over half of west africas population. May 19, 2001 is capital formation in indian agriculture really declining.
International accounting and taxation research group, faculty of. State formation has been a study of many disciplines of the social sciences for a number of years, so much so that jonathan haas writes that one of the favorite pastimes of social scientists over the course of the past century has been to. Aim and objectives of the study the aim of this study is to assess the effects of farmers cooperatives on agricultural development in kwali area council, federal capital territory abuja, nigeria. The result of the granger causality test shows that a bidirectional granger causality exists between foreign aid and gross fixed capital formation gfcf.
In this work, we investigated the impact of fdi on capital accumulation in nigeria for the period of 19862012. According to bakare 2011, capital formation refers to the proportion of present income saved and invested in order to augment future output and income. Unfortunately, successive governments in nigeria have continued to pay lip services to the issue of investment in education. How and to what extent has it affected growth in agriculture. The impact of cooperative society on capital formation.
Occasionally it is also used in corporate accounts. Pdf the role of banks in capital formation and economic. The results corroborated with the harroddomar model which proved that the growth rate of national income will directly be related to saving ratio andor capital formation i. Since the rate of growth of labor is constrained by the rate of growth of population, it is seldom, especially for industrialized countries, higher than two percent per annum, even with. Africa, nigerias external debt stock follows an upward pattern over the years while the former is relatively stabilized ayad and ayadi, 2008. Savings, gross capital formation and economic growth.
Central bank of nigeria ezema, charles chibundu, phd monetary policy department, central bank of nigeria african institute of applied economics aiae. The act is the guidelines for the formation of any types of companies in nigeria and other ancillary matters. The results corroborated with the harroddomar model which. Gross fixed capital formation in nigeria averaged 1849521. On august 27, 1991, the number of nigeria states would increase to thirty as gen. Capital formation is a term used to describe the net capital accumulation during an accounting period for a particular country, and the term refers to additions of capital stock, such as. The impact of cooperative society on capital formation a case study of temidere co operative and thrift society, ijebu ode, ogun state, nigeria. Between 1960 and 1963, nigeria was only divided into 3 regions.
Is capital formation in indian agriculture really declining. Monthly seminar, august 2009 the views expressed in this paper are entirely that of the author and do not in any way reflect the official position of the central bank of nigeria. In that sense, it refers to a measure of the net additions to the. The study investigates the influence of capital accumulation on economic growth in nigeria. The central focus of this study was to find out whether monetary policy in nigeria has brought about significant capital for private investment that spurs economic growth. It is also observed that investment rates of the country have fluctuated wildly. This is how the 36 states were created pulse nigeria. In addition, the tudy sought to evaluate ipso hcto the pattern of responses of private investment to shocks on macroecononlic policies. The main thrust of this study is the evaluation of the impact of cbn monetary policy on the development of the nigerian economy. Human capital formation and economic growth in nigeria eric.
Unlike the united states of america where each state has its own company registry and can. The impact of capital formation on the growth of nigerian economy. The researchers employed trend analysis and advanced econometrics tests to ascertain the impact of capital formation and economic growth in nigeria. The objective was to test jhingan s propositions for sources of capital formation in nigeria. Pdf capital formation and economic growth in nigeria godwin. The memorandum also states the number of shares to be issued. Foreign direct investment fdi is an integral part of an open and effective.
A time bound testing approach 19812014 matthew babatope ogunniyi department of economics, faculty of social sciences, university of lagos, nigeria. An examination of cbn reports shows that nigerian gross fixed capital formation was 11. The study recommends an industrial road map focused on both the industrialisation of agriculture and the creation of capital intensive industries to drive sustained fixed capital accumulation. Meaning of capital formation capital formation means increasing the stock of real capital in a country. Evidence from developmental economics 267 concept as traditionally defined to say that expenditures on education, training, and medical care, etc. It borders the gulf of guinea, and is located between benin and cameroon. It also discovered that the rate of savings is not significant to enhance economic growth. Capital formation in the nigerian capital market and its. Analysis of capital formation and foreign aid nexus in nigeria.
This is in the understanding that capital formation has been recognized as an important factor that determines the growth of nigerian economy. The broad objective of this study is to examine the relationship among economic growth, gross capital formation and savings in nigeria between 1975 and 2008 ii. This study examined the impact of monetary policy on private capital formation in nigeria. The nigerian economy is characterized by capacity utilization in the real sector, poor performance of major inftastructural facilities, large budget deficits, rising level of. Enhanced capital, labor, and technical progress are the three principal sources of the economic growth of nations.
The impact of capital formation on the growth of nigerian. Capital market does not have a significant impact on real sector growth and development in nigeria. Human capital development is therefore a prerequisite for economic growth and development, as well as a necessary and sufficient condition for poverty reduction in nigeria. Actually, nigeria has 36 states and one federal capital territory. The paper investigated the impact of capital formation on economic growth in nigeria. Human capital formation and economic growth in nigeria. Its southern coast is on the gulf of guinea in the atlantic ocean. Gross capital formation % of gdp from the world bank. Ike department of agricultural economics, delta state university, asaba campus, nigeria d.
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