CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
Globalization and international trade has made world economies to be interwoven. This has both positive as well as negative implications to economies both developed, developing and/or underdeveloped. It becomes imperative therefore, for the external sector to function optimally to guarantee macroeconomic stability of any economy. The external sector encapsulates a country’s economic transactions or activities with other countries of the world (trading partners). It is a measurement of the economic transactions between the residents of an economy and the rest of the world. An economy is seen to be economically stable when it has a fairly constant and/or steady growth in output, combined with low and stable inflation regimes. This is in consonance with Gbosi (2015) who opine that economic stability is usually seen as a desirable state for a developed and developing countries. The achievement of macroeconomic goals namely full employment, stability of price level, high and sustainable economic growth, and external balance, that has existed for longer , has been a policy priority of every economy whether developed or developing given the susceptibility of macroeconomic variables to fluctuations in the economy. The realization of these goals undoubtedly is not automatic but requires policy guidance. This policy guidance represents the objective of economic policy. Fiscal and monetary policy instruments are the main instruments of achieving the macroeconomic targets. There exists a consensus in the literature that an adequate and effective macroeconomic policy is critical to any successful development process aimed at achieving high employment, sustainable economic growth, price stability, long–viability of the balance of payments and external equilibrium (Omitogun and Ayinla, 2007). This, therefore, suggests that the significance of stabilization policy (fiscal and monetary policies) cannot be overemphasized in any growth oriented economy. The numerous global economic crises of the 20th century have made macroeconomic volatility a key issue in analysing the determinants of economic growth. The multiplicity of ways in which it affects the long-term growth potential of economies, its diverse causes and the array of methods by which it is measured, make economic volatility a complex and multidimensional phenomenon. We therefore consider the term “volatility” as a generic term, combining all the techniques available for measuring economic fluctuations. In a country like Nigeria, where among scores of natural resources only one – crude oil accounts for over 90 percent of its total export trade, there is no other route to achieving a national sustainable economic growth other than to find the appropriate ways to diversify the export base. With regards to every commodity exportable, emphasis on exports of non-oil products is not going to be only on the agricultural and mineral resources but in shipping products from across all economic sectors. The President Buhari’s administration is being asked by many to boost the government revenue through taxes and tariffs. Exporting all exportable products is the only way to improve the government revenue. The article will highlight the export revenue structure and behaviour of macro- economic indicators in Nigeria.
1.2 STATEMENT OF PROBLEM
In an open economy, economic stability is a function of the interplay of various factors and sectors in an economy, one of which is the external sector. The external sector can be in a state of stability or in instability (in deficit or surplus). A stable and balanced state or equilibrium ensues when receipts (inward payments) from economic activities in the external sector are exactly enough and equal to out-payments. A deficit state represents a situation where receipts are insufficient to billet out-payments, while a surplus position arises when receipts are in excess of out-payments. While a country may desire a surplus, especially in the short-run, an ideal state of the external sector is one that is stable and in equilibrium overtime, as this situation would suggest stability in both inflation and economic growth of the referenced country.
1.3 AIMS OF THE STUDY
The major purpose of this study is to examine export revenue structure and behaviour of macroeconomic indicators in Nigeria. Other general objectives of the study are:
1. To determine the performance of macroeconomic indicators on export revenue structure in Nigeria.
2. To examine the impact of export revenue structure on the macroeconomic stability in Nigeria.
3. To examine how macroeconomic indicators influences export revenue structure in Nigeria.
4. To examine the economic growth of Nigeria.
5. To determine the relationship between export revenue structure and behaviour of macroeconomic indicators in Nigeria.
6. To suggest ways in which macroeconomic indicators can help increase economic growth in Nigeria.
1.4 RESEARCH QUESTIONS
1. How are the performances of macroeconomic indicators on export revenue structure in Nigeria?
2. What are the impacts of export revenue structure on the macroeconomic stability in Nigeria?
3. How does a macroeconomic indicators influence export revenue structure in Nigeria?
4. How is the economic growth of Nigeria?
5. What is the relationship between export revenue structure and behaviour of macroeconomic indicators in Nigeria?
6. What are the ways in which macroeconomic indicators can help increase economic growth in Nigeria?
1.5 RESEARCH HYPOTHESIS
Hypothesis 1
H0: There is no effect of export revenue structure and behaviour of macroeconomic indicators in Nigeria.
H1: There is a significant effect of export revenue structure and behaviour of macroeconomic indicators in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The study findings will provide pertinent information on how macroeconomic factors affect the export revenue structure. The study findings will be of interest to the government of Nigeria, shareholders, as well as scholars and academicians. The study will benefit scholars and academicians who would wish to undertake further studies and increase the body of knowledge on the export revenue structure and the behaviour of macroeconomic indicators in Nigeria. It will increase knowledge on the relationship between macroeconomic indicators and export revenue structure. It will also suggest areas where gap in literature exist and where further research studies are required so that scholars in the field of finance and economics can do further studies in them. The government will understand the forces of economic growth and try to develop a mixture of policies that will be suitable for curing such variables like unemployment, inflation, interest rate and exchange rate fluctuations. Corporate bodies will benefit from the study by getting information on how macro-economic indicators affect the Nigerian economy thus they will provide data and information on better strategies that can be used to deal with macro-economic indicators, improve efficiency and growth in the country.
1.7 SCOPE OF THE STUDY
The study is based on export revenue structure and behaviour of macroeconomic indicators in Nigeria.
1.8 LIMITATION OF STUDY
Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8 DEFINITION OF TERMS
Export: It means sending of goods or services produced in one country to another country. The seller of such goods and services is referred to as an exporter; the foreign buyer is referred to as an importer. Export of goods often requires involvement of customs authorities. An export’s counterpart is an import.
Revenue: Is income received by an organization in the form of cash or cash equivalents. Sales revenue or revenues is income received from selling goods or services over a period of time. Tax revenue is income that a government receives from taxpayers.
Macroeconomic: Macroeconomics is the branch of economics that studies the behaviour and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation.
