Supply Side Liberalization and Foreign Exchange Management in Nigeria

J. Orji
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Abstract

The daunting challenge of foreign exchange control in Nigeria has remained a burdensome economic issue to deal with economic management. Virtually in every socio-political debate, the exchange rate management is yet to be a resolved paradigm. This study empirically examined the supply side liberalization as proxy of personal diaspora remittance and exchange rate management in Nigeria. Technique of Vector Autoregression (VAR) was employed to examine the direction of shocks arising from the exchange movement with respect to diaspora remittances (REMIT), and foreign direct investment (FDI). The findings showed that, growth of remittance results in exchange rate appreciation when pass through official channel, and vice versa. While, controlling for FDI, exchange rate movement improves with growth of FDI in the short run, and decreases due to improper capital control mechanism. Policy recommendation has it that: The Nigerian Monetary Authority should harmonize the dual exchange rate aimed at maximizing the gains of capital control and achieve domestic monetary policy success; Government should implement friendly tax policies, zero charges and lowered administrative bottlenecks to clearing personal diaspora remittance inflow aimed at minimizing diversion of foreign capital into unofficial route.
尼日利亚的供给侧自由化和外汇管理
尼日利亚外汇管制的艰巨挑战仍然是处理经济管理的一个繁重的经济问题。实际上,在每一场社会政治辩论中,汇率管理都有待解决。本研究实证考察了供给侧自由化对尼日利亚个人散居汇款和汇率管理的影响。采用向量自回归(VAR)技术来检验汇率变动对海外侨汇(REMIT)和外国直接投资(FDI)产生的冲击方向。研究结果表明,通过官方渠道汇款的增长导致汇率升值,反之亦然。而在控制FDI的情况下,汇率变动在短期内随着FDI的增长而改善,而由于资本管制机制不健全而下降。政策建议是:尼日利亚金融管理局应协调双重汇率,旨在使资本管制的收益最大化,实现国内货币政策的成功;政府应实施友好的税收政策、零收费和降低行政瓶颈,以清除个人散居侨民汇款流入,尽量减少外国资本流入非官方途径。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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