Department of Economics

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Author: search.filters.author.Covenant University DissertationStart date: 2025

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    EFFECT OF FINANCIAL CONDITIONS INDEX ON MONETARY POLICY EFFECTIVENESS IN NIGERIA
    (Covenant University, Ota, 2026-08) EGBE, IWASAM EJA; Covenant University Dissertation
    This study evaluated the impact of the Financial Conditions Index (FCI) on the effectiveness of monetary policy in Nigeria. Existing studies on Nigeria's FCI suffer from an outdated scope, exclusion of critical financial variables, and limited representation of the country's inflationary and growth dynamics. This study, therefore, aimed to construct a comprehensive FCI and assess its usefulness as a diagnostic and predictive tool for monetary policy in Nigeria. Specifically, the study examined the financial variables most suitable for constructing a robust FCI for Nigeria, analysed the dynamic response of the constructed FCI to monetary shocks and evaluated its predictive capacity for real GDP growth and inflation. A quantitative research design was employed for this study, using quarterly data from the Central Bank of Nigeria Statistical Bulletin, covering the period 2010Q1 to 2024Q4. Two FCI construction methodologies were adopted: Principal Component Analysis (PCA) and the Weighted-Sum Vector Autoregression (VAR) method. Impulse Response Functions, Pairwise Granger Causality tests, and out-of-sample Root Mean Squared Error (RMSE) evaluations were used to assess the index's responsiveness and predictive power. The findings revealed that the selected financial variables significantly contributed to FCI construction, with the first three principal components capturing about 93.05% of the total variance. Both FCIs responded significantly to monetary policy shocks primarily through the interest rate and exchange rate channels. The PCA-FCI demonstrated superior predictive power for real GDP growth, while inflation was found to Granger-cause both indices, indicating reverse causality. The study concludes that monetary policy effectiveness in Nigeria is better assessed through a composite financial conditions framework than through isolated policy rate indicators. It is therefore recommended that the Central Bank of Nigeria formally incorporate the PCA-based FCI into its policy diagnostic toolbox and place greater emphasis on price-based transmission instruments over credit volume controls.
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    ASSESSMENT OF GREEN FINANCE ON ECONOMIC GROWTH AND INCOME INEQUALITY IN NIGERIA
    (Covenant University, Ota, 2026-05) Ojo, Abigail Victory; Covenant University Dissertation
    This study examines the impact of green finance on economic growth and income inequality in Nigeria over the period 1990-2024. The motivation for the study arises from the increasing global emphasis on green finance as a tool to curb the effects of climate change and promotion of economic growth that is beneficial to all and this raises the need to understand its macroeconomic and distributional implications in a developing economy like Nigeria. Specifically, the study investigates the effect of green finance on economic growth and income inequality while incorporating key control variables such as inflation, unemployment, foreign direct investment, labour force participation, and Trade openness. The study employs annual time-series data and adopts the Autoregressive Distributed Lag (ARDL) bounds testing approach and a robustness test to confirm results. The empirical findings reveal that green finance has a significant but negative impact on economic growth in the short and long-run and also a positive and statistically significant effect on income inequality in both the short run and long run. The robustness test revealed that a higher level of renewable energy consumption reduces income inequality in Nigeria. Overall, the study suggests that the green finance sector in Nigeria is still at a developmental stage and may involve transitional costs, inefficiencies, and delayed returns. Additionally, the results indicate that macro-economic indicators have mixed effects on economic growth and income inequality, It recommends the promotion of inclusive green finance policies, strengthening of regulatory frameworks, and improved access to green funding for small and medium enterprises and low-income groups to ensure that green finance contributes to both economic growth and equitable income distribution.
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    ASSESSMENT OF INTRNATIONAL TRADE ON SELECTED SECTORAL PERFORMANCE IN ECOWAS COUNTRIES: A MEDIATING ROLE OF INDUSTRIALISATION
    (Covenant University, Ota, 2026-08) Kayode, Maria Oluwabukola; Covenant University Dissertation
    This study investigates the impact of international trade on sectoral performance across the agricultural, manufacturing, and services sectors in fifteen Economic Community of West African States (ECOWAS) member countries, with a emphasis on the mediating role of industrialisation. Using panel dataset covering the period 2005–2024., sourced from World Development Indicators (WDI) and International Financial Statistics (IMF Data Portal). The study employs the Panel Autoregressive Distributed Lag (P-ARDL) model estimated through the Pooled Mean Group (PMG) approach to capture both short-run dynamics and long-run equilibrium relationships. Pre-estimation diagnostics confirmed the absence of significant cross-sectional dependence and mixed orders of integration among variables, validating the suitability of PMG-ARDL framework. The empirical findings reveal heterogeneous relationships across sectors. International trade proxied by Merchandise export significantly affects sectoral performance in the long run.Trade positively affects the agricultural sector, reflecting the dominance of primary commodity exports in ECOWAS economies. However, it negatively affects the manufacturing and services sectors, indicating weak spillover effects and limited structural transformation within the region. No significant short-run effects of trade were observed across the three sectors. The mediation analysis further reveals that industrialisation does not significantly mediate the relationship between trade and services sector performance. However, industrialisation partially mediates the relationship between trade and agricultural performance by transforming trade’s initial negative direct effect into a positive overall effect. In the manufacturing sector, industrialisation exhibits a suppression effect by intensifying the adverse impact of trade on manufacturing performance. The study concludes that although international trade significantly influences sectoral performance and promotes industrial development, the mediating role of industrialisation remains constrained by persistent dependence on primary commodity exports and weak industrial linkages across ECOWAS countries. The study therefore recommends policies aimed at export diversification toward higher value-added manufactured products, alongside increased investment in agro-industrialisation to strengthen productive capacity, enhance inter-sectoral linkages, and improve sectoral performance within the region.
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    EFFECT OF DIGITAL INFRASTRUCTURE AND GREEN INNOVATION ON ENVIRONMENTAL OUTCOMES IN SUB-SAHARAN AFRICA
    (Covenant University, Ota, 2026-08) Obi, Chibuzor Happiness; Covenant University Dissertation
    Digital infrastructure has been seen as a force of change for sustainable development, but in Sub-Saharan Africa, the environmental impact of digital infrastructure is poorly understood. This study investigates the impact of digital infrastructure on environmental outcomes in Sub-Saharan Africa, focusing on the potential intermediate path of green innovation, but also identifying threshold conditions where digital growth can foster emissions reductions. The study employs a balanced panel of 40 Sub-Saharan African countries from 2001 to 2022 and uses a dynamic panel-data framework to examine how digital infrastructure is linked to carbon dioxide emissions. It also applies mediation analysis to test whether green innovation mediates the impact of digital infrastructures on environmental outcomes, and threshold analysis to see if such impact is different after a specific level of connectivity is attained. The composite index of key information and communication technology indicators is used to measure digital infrastructure. The main environmental indicator is CO2 emissions per capita, with wider environmental indicators also checked. Renewable energy use as a percentage of total final energy use serves as a proxy for green innovation, as well as renewable electricity output as a percentage of total electricity generation. The study demonstrates that digital infrastructure can have a positive impact on environmental effects, but its effectiveness is conditioned on the quality of connectivity, how much digital infrastructure expansion can foster green innovation, and the availability of cleaner energy systems. An important point to emphasize, however, is the need for suitable green innovation indicators in low-income settings, as traditional use of biomass does not necessarily indicate modern use of clean energy. The study adds to the literature by bringing together direct, mediation and threshold approaches under one umbrella and offers policy recommendations for digital economy planning, climate finance, clean energy investment and sustainability measurement in Sub-Saharan Africa
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    DIGITAL TECHNOLOGY EXPOSURE AND FEMALE YOUTHS’ LABOUR FORCE PARTICIPATION IN NIGERIA
    (Covenant University Ota, 2025-08) BABALOLA, Charity Ifelolorun; Covenant University Dissertation
    Amidst the growing global attention on the role of technology in driving economic inclusion, it is important to understand the impact of digital technology exposure on young women in developing countries like Nigeria which is paramount for policy and development outcomes in transforming in human capital and the economy of the country. This study explores the effect of digital technology exposure on labour force participation among female youths in Nigeria, within the broader context of socioeconomic and regional inequality that exists in female employment and access to digital technology. The data for the study is from the 2018 Nigeria Demographic and Health Survey (NDHS), focusing on females between age 15 and 30. Three kind of analysis was conducted: univariate, bivariate (cross tabulation and chi-square), and multivariate (binary logistic regression analysis) to examine the effects of background factors (age, highest level of education, marital status, wealth, residence and Religion), contextual factors (region, and mass media exposure) and digital technology exposure (Use of internet, frequency of use, mobile phone ownership and use of mobile phone for financial transaction) on labour force participation. The key findings of this study revealed that digital technology exposure is a significant predictor of employment among female youths. However, disparities persist across regions, education levels, and socioeconomic groups in access to digital technology and labour force participation. Media exposure was also found to positively influence both digital access and labour participation. The study also revealed that access to and the use of digital tools such as mobile phones and mobile financial tools are strong predictors of female labour force participation. These results emphasise the need for targeted interventions to promote digital inclusion and economic opportunities for young women in Nigeria.
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    IMPACT OF FINANCIAL INCLUSION AND ENERGY CONSUMPTION ON ENVIRONMENTAL QUALITY IN SELECTED SUB-SAHARAN AFRICAN COUNTRIES
    (Covenant University Ota, 2025-08) OLAOYE, Olugbenga Olaposi; Covenant University Dissertation
    Sub-Saharan Africa (SSA) faces a pressing development dilemma: rising energy demand, weak financial inclusion, and worsening environmental degradation. The region’s reliance on fossil fuels such as coal, gas, and oil has intensified carbon emissions and undermined environmental sustainability, while the exclusion of a significant share of the population from formal financial systems constrains their ability to invest in clean energy and sustainable practices. Despite growing global advocacy for inclusive finance and clean energy adoption, existing research provides limited evidence on how financial inclusion moderates the energy–environment nexus, particularly within SSA. Furthermore, the potential influence of structural breaks—such as global financial crises, international climate agreements, and pandemics—on this relationship remains underexplored. These gaps informed the motivation for this study. This research examined the impact of financial inclusion on the relationship between energy consumption and environmental quality across 38 low- and middle-income SSA countries between 1991 and 2022. Anchored on the Environmental Kuznets Curve (EKC) hypothesis, the study employed annual secondary data sourced from the World Bank’s World Development Indicators. The Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) model was the principal estimation technique, as it accounts for cross-sectional dependence and heterogeneity while capturing both short- and longrun dynamics. To ensure robustness, the Pooled Mean Group (PMG) estimator was also applied. The empirical results show that energy consumption significantly worsens environmental quality across the region, with middle-income countries exhibiting a stronger positive association between energy use, capital investment, and carbon emissions. Real GDP and gross capital investment further contributed to emissions, reflecting the industrial expansion of African economies. In contrast, the quality of environmental regulation was negatively associated with emissions, indicating its mitigating role, though implementation remains uneven across countries. Financial inclusion was found to be a critical determinant of environmental outcomes: in middle-income economies, greater inclusion significantly reduced emissions by enabling access to credit, green finance, and adoption of cleaner technologies. However, in low-income countries, the short-term effects of financial inclusion on environmental quality were positive but statistically insignificant, reflecting structural constraints in their financial systems. The study concludes that financial inclusion can serve as a viable policy instrument for environmental sustainability in SSA. Expanding inclusive finance, strengthening regulatory enforcement, and aligning financial innovations with Nationally Determined Contributions (NDCs), the Sustainable Development Goals (SDGs), and Africa’s Agenda 2063 are vital for promoting clean energy adoption and building climate-resilient economies.
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    EFFCTS OF DIGITAL PAYMENT AND FINANCIAL INCLUSION ON ECONOMIC GROWTH IN SELECTED WEST AFRICAN COUNTRIES
    (Covenant University Ota, 2025-04) ADEKOYA, Oluwasegun Ayomide; Covenant University Dissertation
    This study examined the effect of digital payment and financial inclusion on economic growth in selected West African countries. The financial sector remains a key driver of economic growth globally, especially as countries employ more technology-driven systems; this shift has profound effects across all sectors, including the financial sector. Meanwhile, despite the ongoing policy efforts to promote digital transactions, West Africa still lags behind in financial inclusion as compared to the global standards. Hence, the study examined the interactive effect of digital payment and financial inclusion on economic growth in selected West African countries. This study employed the Pooled Ordinary Least Squares (POLS) estimation technique to analyse data for ten (10) West African countries from 2014 to 2022. The data was sourced from the World Bank’s World Development Indicators. The explanatory variables used in the model were; mobile transfer payment, mobile money, account ownership at a financial institution or with a mobile-moneyservice provider, labour force and gross fixed capital formation, the dependent variable was real gross domestic product. The findings of the study revealed that both digital payments and financial inclusion independently contribute positively and significantly to economic growth. However, the interaction of digital payments (proxied by mobile transfers) and financial inclusion had a negative and statistically significant impact on economic growth. In contrast, the interaction of mobile money and financial inclusion showed a positive and significant effect on economic growth. The study concludes thus, that the interactive effect between digital payment and financial inclusion has a positive impact on economic growth in the selected West African countries. Based on the findings, this study recommended that mobile money offers a stronger economic potential, and should therefore, be used more as a preferred digital payment channel to enhance financial inclusion and economic expansion in West Africa. The study concluded that economic growth will be boosted if digital payments is strengthened more in financial inclusivity