IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 5 NO. 4 2019

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International Credit Institutions and Real Sector Performance in Nigeria (1986-2018): Auto Regressive Distributed Lagged (ARDL) Technique

PAAGO, J. Kirikor and Dr. Ewubare. D.B

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Abstract

This study empirically examined international credit institutions and real sector performance in Nigeria within1986-2018. The specific objectives of the study examined the impact of African Development Bank (ADB), International Finance Corporation (IFC), and International Fund for Agricultural Development (IFAD) and International Development Association (IDA) credit financing on the output growth rate of manufacturing (MSO) and building and construction (BCO), sectors respectively. Time series data on each of the variables were collected from secondary sources, such as World Bank Financial Development Data Base, CBN Statistical Bulletin (various issues),Debt Management Office (DMO) annual reports. Quasi experimental design was adopted for the study with Johansen and Julius (1990) econometric model and ARDL as techniques for data analysis. ADF unit root test was conducted in determining stationarity of the variables. Results obtained showed that the series are mixed integrated and ranging from level 1(0) to and at first difference 1(1). The cointegration regression results showed that all the financing variables have positive significant impacts on output growth rate and fully integrated at the first difference 1(1) except IFC which integrated at level 1(0) ARDL regression results indicates that explanatory variables determine 73.3% of charges in AGO and the F statistic of 6.49 and P. value of 0.0003 revealed the model at good fit at 5% level of significance. Similar result of good fit and statistically significant applies to MSO where 78.5% of changes occurred and the F-statistic of 8.28 and P-value of 0.001 revealed that the model has a good fit at 5% level of significance and equally applied to BCO 84.4% changes, F-statistics 11.78 and P-value of 0.000.On the basis of the findings, it is recommended that international credit institutions particularly IFC, IDA should increase the funding of the real sector to sustain output growth rate increase

keywords:

International Credit Institutions, Real Sector, Performance

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