Posted by Unknown |

THE BENEFITS AND COSTS OF NAIRA CONVERTIBILITY - Prof. Milton A. Iyoha

Professor M.A Iyoha.


AN ECONOMETRIC ESTIMATE OF THE BENEFITS AND COSTS OF NAIRA     CONVERTIBILITY



                                                          Milton A. Iyoha, Ph. D.
                                                           Professor of Economics
                                              Department of Economics and Statistics
                                                              University of Benin
                                                                     Benin City


A previous version of this paper was presented at a Workshop organized by the Nigerian Economic 
Society.


                                                                             





                     AN EMPIRICAL ESTIMATION OF THE BENEFITS AND COSTS
                                                   OF NAIRA CONVERTIBILITY

                                                                            by

                                                            Professor M. A. Iyoha
                                                              University of Benin


I.          Introduction
            In general, currency convertibility implies absence of exchange controls on payments and receipts, hence the ability of non-residents and even residents to exchange domestic currency for any foreign currency of choice without limit and hindrance. Thus, according to Gilman (1990, p. 32), currency convertibility essentially means "the unrestricted use of a country's currency for international transactions, allowing it to be freely exchanged for foreign currencies - as part of the process of integration into the world market economy".
            Restrictions on the use of a national currency, i.e., currency inconvertibility, is most often achieved by the imposition of exchange controls using the instrumentality of multiple currency practices. Thus, perhaps the most commonly used concept of currency convertibility is that of the International Monetary Fund (IMF) which proscribes multiple currency practices and indeed outlaws restrictions on current international payments. This is contained in Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement, Tew (1971), IMF (1997). Consider the following:

"... no member shall, without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions".

Note that in this sense, currency convertibility is limited to freedom of payments and transfers for current international transactions only. In particular, it excludes freedom of international capital transfers. This is why countries who notify the IMF that they accept the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement are deemed to have convertible currencies. Formally, they are said to have "assumed Article VIII status". As at December 1996, a total of 137 member countries of the IMF had assumed Article VIII status IMF Survey (Feb. 10, 1997, p. 45). According to the IMF,
            By accepting the obligations of Article VIII, member countries assure the  international community that they will pursue sound economic policies that will obviate the need to use restrictions on making payments and transfers for current international transactions, and thereby contribute to a multilateral payments system free of restrictions, IMF Survey (July 15, 1996, p. 240).
Current account convertibility exposes domestic producers to foreign competition particularly under conditions of trade liberalization (low tariffs and quotas). It essentially introduces the structure of world prices into the domestic economy. According to Hanke and Schuler (1994, p. 21),
            World prices are signals that help people determine which areas of production to specialize in. By specializing in the goods they produce most efficiently and then trading those goods for other goods, wealth increases globally.
Thus, undeniably, current account convertibility promotes world trade and enhances efficiency through the elimination of price distortions.
            The main purpose of this paper is to obtain a quantitative estimate of the benefits and costs of Naira convertibility. Both econometric and simulation techniques will be utilized to obtain a quantitative estimate of the net benefit of Naira convertibility during the 1997-2010 period. In addition to this introductory section, the current paper has three other sections. In section II, we present an economic analysis of the benefits and costs of Naira convertibility.  Section III presents a quantitative estimate of the net benefits of Naira convertibility in the years ahead using econometric and simulation techniques. In particular, we estimate Nigeria's real GDP for the 1997-2010 period assuming Naira convertibility. This series is compared with estimates of what the real GDP would be without Naira convertibility. The difference obviously gives an estimate of the net benefits of Naira convertibility. The last section contains a summary of the paper and some concluding remarks.

II. The Benefits and Costs of Convertibility
2.0       Preface
            Countries strive to have convertible currencies because of the potential gains and benefits of currency convertibility. However, there are also potential costs and dangers, particularly for developing countries. Logically, a rational decision can only be made after weighing the benefits and costs of convertibility. However, what should be borne in mind right from the beginning is that while the costs are short-term in nature, the benefits are long-term. Thus, in the long run, currency convertibility is almost certain to be beneficial to any contemporary economy -- particularly in this era of economic and financial globalization.  
2.1       Benefits of Convertibility
            The major benefits of currency convertibility arise from the economic effects of removing exchange restrictions. The greatest benefits no doubt arise from adoption of full convertibility as the country then reaps the effects of both increased trade and significant expansion in foreign investment flows. However, even current-account convertibility confers enough benefits to make the effort worthwhile. The main benefits of currency convertibility include:
                        (i)elimination of distortions associated with foreign exchange rationing;

                        (ii)promotion of optimal decision making by consumers and producers whose decisions will now be based on correct price signals;

                        (iii)increase in foreign competition by the removal of protection fostered by exchange controls, thus increasing domestic productivity;

                        (iv)promoting a positive environment for increases in investment by both domestic and foreign investors, thereby contributing to rapid economic growth;

                        (v)reduction of capital flight with benefits for increased capital accumulation and growth;

                        (vi)rise in R & D and increased adoption of foreign technology and management techniques resulting in rising productivity;

                        (vii)Expansion of trade leading to growth; and

                        (viii)improved international credibility.
Note that the benefits of currency convertibility, which are dynamic and long-run in nature, arise from greater exploitation of the principle of comparative advantage. Currency convertibility permits greater integration into the global economy with consequences for improved competition, increased investment, greater exploitation of scale economies, and enhanced growth over time.

2.2       Costs of Convertibility
            The costs of convertibility are adjustment costs and are short run in character. These costs are greater the more highly protected the economy is before the adoption of currency convertibility. This is because the more pervasive protectionism is, the more the distortion of prices and costs. Shifting from a regime of high protection to a free one inevitably involves significant transitional or adjustment costs both for individuals and firms and even entire sectors of the economy.
            The main costs of currency convertibility may therefore be summarized thus:

                        (i)possible dislocation of firms, industries and even entire economic sectors resulting in high social costs including unemployment;

                        (ii)increases in foreign competition which could lead to the restructuring of domestic production and result in a temporary fall in output; and

                        (iii)adoption of full convertibility could lead to capital outflows if macroeconomic policies are not perceived as credible, transparent, and consistent or if the domestic financial environment is considered unstable.

III.       The Net Benefits of Naira Convertibility: Econometric    Estimation and Simulation Results
3.1       "Openness" and the Net Benefits of Naira Convertibility
            Since convertibility facilitates the inflow of foreign private capital, it would undoubtedly promote investment-led growth. However, apart from this, the greatest potential source of gains from convertibility will probably arise from the dynamic effects of openness1 on economic growth. The idea is that increased openness in an economy may release dynamic forces which will accelerate its economic growth. One channel of transmission is that increased openness will accelerate growth by making realizable vast internal and external economies of scale. Increased economic openness implies that the country's potential market is now the entire world. Thus, by vastly expanding the market size, increased openness will enhance the chances of reaping these economies of scale. The induced increase in the market size will widen the scope of gains arising from the interplay of sectoral developments. Also, the increase in the size of the market will encourage diversification and creative experimentation. Investment in Research and Development will increase leading to innovation which is critical to growth. This is why Ghura (1995, p.763) has asserted that "Outward-oriented trade strategies promote external competitiveness, which, in turn, is conducive to export expansion and is beneficial to growth". This conclusion agrees with the results obtained in the endogenous growth models developed by G.M. Grossman and E. Helpman (1989), namely, that openness to international trade accelerates technological advancements and growth because of increased access to goods and services with embodied technology. A similar conclusion was reached by Romer (1986), namely, that increased openness is beneficial to growth because of enlarged availability of technologies and the accompanying knowledge spillovers.   
            Finch and Michaelopoulos (1988) have provided a useful and important insight into the nature of the link of external trade to development2.  According to them,
           
            It is not solely, or perhaps even mainly, a demand-driven link, whereby export growth stimulates incomes and output in the rest of the economy.  Rather, effective participation in international trade permits economies of scale not open to small protected economies.  By introducing greater market competition, it encourages a more efficient utilization of resources and greater growth in productivity in the whole economy.  Moreover, open trading policies permit quicker adaptation to new technologies and greater flexibility in responding to international economic developments.

3.2       Econometric Estimation of Net Benefits of Naira Convertibility
            In this section, an attempt is made to estimate the "net benefits", i.e., benefits less costs, of Naira convertibility. It is assumed that the principal channel through which convertibility impacts on the economy is through increased openness. It is further assumed that increased openness affects the economy by raising aggregate investment. A second channel through which convertibility affects the economy is through reduction of domestic macroeconomic distortions which results in enhanced allocative efficiency and improved productivity.

3.2.1 A Model of Openness, Investment and Economic Growth in Nigeria
            This section presents a small macroeconometric model which permits estimation and simulation of the effects of increased economic openness on economic growth in Nigeria. The macroeconometric simulation model consists of 2 simultaneous equations consisting of an investment demand equation incorporating an openness variable and a parallel market premium variable, and an output equation which depends critically on investment.

Investment Equation
            In Nigeria, real GDP growth was negative in the early and mid-1980s. This was due to a host of factors including the collapse of investment. In fact, the investment-income ratio fell below 10 percent in the mid-1980s. See Table 1. The depressed level of investment in turn can be ascribed to many factors including falling savings and income, the escalating external debt, and crippling trade distortions.  

TABLE 1: INVESTMENT/GROSS DOMESTIC PRODUCT RATIO

     Year   Percent      Year   Percent      Year   Percent

            1970            14.84                   1980            22.24                   1990            16.01
            1971            18.68                   1981            23.29                   1991            17.03
            1972            21.12                   1982            20.09                   1992            17.52
            1973            22.44                   1983            14.75                   1993            15.00
            1974            16.98                   1984            12.33                   1994            10.00
            1975            25.20                   1985            12.07                  
            1976            31.50                   1986            15.07
            1977            29.04                   1987            13.69
            1978            27.56                   1988            13.47
            1979            21.97                   1989            14.42

Source: (i) CBN. Statistical Bulletin, various issues; (ii) World
        Bank. World Debt Tables, various issues; (iii) World Bank.
        (1994).
Starting from the early 1980s, the Nigerian economy faced a major economic crisis largely as a result of falling oil export revenues consequent on the collapse of world oil prices.  With oil revenues accounting for over 90 percent of total foreign exchange earnings, the collapse of oil prices had a devastating effect on the Nigerian economy. Import compression, using restrictions on trade and payments, was one of the key policy responses to the crisis. In retrospect, it seems clear that such a strategy could, in the long run, only serve to aggravate the crisis and exacerbate Nigeria's development problemmatique.  
            Following Sachs (1988), Krugman (1988), Borensztein (1991), Chhibber and Pahwa (1994), Ghura (1995), Iyoha (1997a) and Iyoha (1997b), we specify an investment demand function which has its roots in neoclassical optimization theory. We also make allowance for a potential role for trade openness and a method of measuring the impact of domestic macroeconomic policy distortions on investment. In the final specification, the investment-income ratio is hypothesized to depend negatively on domestic interest rate, positively on the marginal product of capital, negatively on the foreign exchange premium, and positively on trade openness. Thus, the basic specification of the investment demand function is given
by
                                  1                             (1)
b1 < 0,  b2 > 0,  b3 < 0,  b4 > 0,
where I/GDP is the ratio of investment to GDP, r = interest rate (commercial lending rate), MPK = marginal product of capital,  FXP = foreign exchange premium (measured by the ratio of parallel market foreign exchange rate) which is designed to capture the effects of trade distortions on the economy, M/Y is the ratio of imports to income which is expected to measure the effect of trade openness and u is a stochastic error term assumed to be Gaussian white noise.
            From preliminary ordinary least squares regression calculations, it was found that the one-period lagged value of interest rate gave better and more consistent results than its contemporaneous value. It was therefore decided to use rt-1 in place of rt. The amended equation was then estimated by the OLS technique and the following results obtained:

                                 2                            (2) 
R2 = 0.871          = 0.81         F(4, 9) = 15.2
see = 1.7
Mean of dependent variable = 14.9
D-W statistic = 2.06
In equation (2), t-values are given in parentheses below each coefficient. With an R2 of .871, it is clear that we are able to explain over 87 percent of the systematic variations in Nigeria's investment-income ratio by the four independent variables. Three of the independent variables, viz., the interest rate, the foreign exchange premium, and the openness ratio are correctly signed and significantly different from zero. The interest rate and the openness ratio pass the two-tailed significance test at the 1 percent level. However, the parallel market premium only passes the significance test at the 4 percent level. The fourth variable, MPK, is incorrectly signed and not significantly different from zero. The Durbin-Watson statistic used to test the existence of first order serial correlation is 2.06.  This  suggests the absence of serial correlation. The F-statistic of 15.2 is significant at the 1 percent level. Thus, the hypothesis of a significant linear relationship between the investment-income ratio and the four independent variables is validated.
            From the results, it can be concluded that economic distortions and trade policy inadequacies, as proxied by the parallel market premium, have had a dampening effect on investment. The elasticity3 of investment with respect to the parallel market premium is -.24. Thus, a 10 percent decrease in the ratio of parallel market exchange rate to official market exchange rate would result in a 2.4 percent increase in the investment-income ratio. The results also show that trade openness is a significant determinant of investment in Nigeria. The trade openness variable, proxied by the ratio of imports to GNP, is positive and highly significant. The elasticity of investment with respect to the trade openness variable is .44. Thus, a 10 increase in trade openness would lead to 4.4 percent rise in the investment ratio.

The Output Equation
            The inspiration for the output equation used in this study is neoclassical, tracing its ancestry to Solow (1957) who hypothesized that output depended on capital and labour inputs and on disembodied technical change. It also owes much to the modifications introduced by development economists, particularly Chenery and his associates, eg. Chenery and Strout (1966), which emphasized the role of investment and the investment-income ratio. This combination is now becoming standard in the development literature and variations of the model have been used by Ram Rati (1985), Ghura (1995), Iyoha (1997a), Iyoha (1997b), Khan and Kumar (1993) and Pindyck and Solimano (1993). In this study, it is hypothesized that output depends on the capital-labour ratio, the investment-income ratio and technical progress (proxied by time). Thus the output function to be esti­mated econometrically using time series data is
                                    4                               (3)
where et is the random error term assumed to be Gaussian white noise, a1, a2, a3 > 0, and GDP stands for Gross Domestic Product, KLR is the capital-labour ratio, I/GDP is the investment-income ratio, TM is chronological time, and ln stands for natural logarithms. In equation (1),  a3 is a crude measure of the rate of technical progress.
            Using the two stage least squares regression method, the MICROFIT MFIT 386 econometric software for PCs, and data for 1980-1994, the following estimated output equation was obtained:
                                5                           (4)
R2 = 0.989          = 0.985        F(3, 10) = 292
see = 0.12
Mean of dependent variable = 5.05
D-W statistic = 1.85
where t-values are reported in parentheses below the coefficients. Given the value of the R2, it can be concluded that the three independent variables (capital intensity, investment-income ratio and time) together explain approximately 99 percent of the systematic variations in output during the period. The F-value of 292 is highly significant, easily passing the significance test at the 1 percent level. The signs of all the coefficients are correct and the t-values of the three independent variables are highly significant, passing the 2-tailed test of significance at the 1 percent level. The Durbin-Watson statistic used to test the existence of first order serial correlation is 1.85.  This  suggests the absence of serial correlation. The elasticity of nominal output with respect to the investment ratio is approximately .1, indicating that a 10 percent rise in the investment ratio will bring about a 1 percent increase in output. 

3.3       Net Benefits of Naira Convertibility: Simulation Results
            The econometric results already obtained can be used to get coefficients to be used in simulating the effect of Naira convertibility on real GDP. First consider the investment demand equation. Recall that currency convertibility normally leads to the elimination of the parallel market premium. Since the coefficient of the parallel market premium is negative, the existence of multiple exchange rates reduces the investment income ratio. Logically, elimination of multiple exchange rates would increase the investment-income ratio. Given that the coefficient of the parallel market premium is -1.73 and its mean value during the 1981 1994 period was 2.07, one can conclude that Naira convertibility would lead to a 3.6 percentage points increase in the investment-income ratio. Assuming a 10 % increase in openness in the medium term, the investment income ratio would rise by 4.4 percent. Thus, the investment-income ratio would rise from its 1981-1994 mean value of 14.9 percent to approximately 19.5 percent. Thus the investment-income ratio would rise by about 30 percent. Next, we can use the output equation to obtain the result that GDP growth rate would rise by approximately 2.5 percentage points.
            In the absence of Naira convertibility, assume that real GDP growth rate would rise to 4 percent in 1997 and, by stages, to 5 percent in the year 2000 where it would remain until the year 2010. These assumptions have been used to simulate Nigeria's real GDP for the 1997-2010 period given the 1996 figure of N106.9 billion. This real GDP series in the absence of Naira convertibility is regarded as the Control GDP series.
            With Naira convertibility, real GDP growth is assumed to reach 4.5 percent in 1997 and rise by stages to 7 percent in the year 2000. GDP growth rate is assumed to remain at 7 percent until 2005 when it is expected to rise to 7.5 percent which would be maintained until 2010. Thus, ten years after Naira convertibility, the Nigerian economy is expected to move to a high-growth trajectory reminiscent of the high-growth performances of the "East Asian Tigers" -- Hong Kong, Singapore, Taiwan and South Korea. 
These assumptions are then used to simulate a new real GDP series. This real GDP series resulting from Naira convertibility is dubbed the Simulated GDP series, or GDPSIM.

TABLE 2: NIGERIA'S REAL GDP, 1996 - 2010
                   (Naira billion)

                                                     Control                                  Simulated 
                         Year                     Real GDP                              Real GDP     

                        1996                      106.9                                        106.9
                        1997                      111.2                                       111.7
                        1998                      116.2                                       118.4
                        1999                      121.4                                       126.1
                        2000                      127.5                                       134.9

                        2001                      133.9                                       144.4
                        2002                      140.5                                       154.5
                        2003                      147.6                                       165.3
                        2004                      154.9                                       176.9
                        2005                      162.7                                       190.1

                        2006                      170.8                                       204.4
                        2007                      179.4                                       219.7
                        2008                      188.3                                       236.2
                        2009                      197.8                                       253.9
                        2010                      207.6                                       273.0


Source: Author's simulations, 1997


            The Control real GDP series and Simulated real GDP series are reported in Table 2 and illustrated in Fig 1. An examination of Table 2 confirms that Control real GDP (i.e., Nigeria's real GDP in the absence of Naira convertibility) rises from N111.2 billion in 1997 to N207.6 billion in 2010. This translates to an average annual growth rate of 4.9 percent during the period. On the other hand, GDPSIM (i.e., simulated real GDP assuming Naira convertibility) rises from N111.7 billion in 1997 to N273 billion in 2010. This is gives an average annual growth rate of 7.1 percent during the period. The difference between the two growth rates is 2.2. Thus, we can conclude that Naira convertibility would result in an increase of 2.2 percentage points in the average annual growth rate of Nigeria's real GDP during the 1997 - 2010 period.   A further analysis of Table 2 demonstrates that in the year 2010, GDPSIM exceeds Control GDP by N65.3 billion, or by approximately 32 percent. This means that if Nigeria were to embrace convertibility in 1997, then, by the year 2010, her real GDP would be approximately one-third higher than it would have been with an inconvertible currency.  

IV.       Summary and Concluding Remarks
            In this paper, an attempt has been made to empirically estimate the benefits and costs of Naira convertibility using econometric and simulation techniques. Operationally, it was found convenient to estimate the net benefits (i.e., benefits less costs) of Naira convertibility. The net benefits of Naira convertibility are expected to increase over time as the costs are largely of a short-term nature while the benefits are dynamic and of a long-term nature. The net benefits of Naira convertibility presumably arise mainly from: (i) increased gains from trade; (ii) expansion of output arising from augmented investment triggered by increased openness; and (iii) expanded output arising from productivity gains resulting from elimination of trade distortions.
            The basic approach involved the estimation of a small macroeconometric model of the Nigerian economy. The key relations were: (i) an investment demand function incorporating openness and the parallel market premium (a measure of domestic macroeconomic distortions caused by trade restrictions); and (ii) an output function depending critically on investment. Thus, the channel of transmission of the effect of Naira convertibility on real GDP is through investment.
            The estimated empirical equations showed that openness, as measured by the import-income ratio, and the parallel market premium are key determinants of investment. Increased openness has a strong positive effect on investment; also, the elimination of multiple currency practices greatly spurs investment. On its part, increase in investment triggers output expansion. Using the coefficients obtained from the econometric model and plausible assumptions about the phasing of the effects of Naira convertibility on output growth, we utilized simulation techniques to obtain a real GDP series from 1997 to 2010 on the assumption of immediate embrace of convertibility. This series, called GDPSIM, was compared with a counter factual, called Control GDP, under which the Naira remains inconvertible. It was found that, by the year 2010, GDPSIM would exceed Control GDP by one-third. Viewed another way, the average annual growth rate of GDPSIM (Nigeria's real output under the assumption of Naira convertibility) would be 7.1 percent during the 1997-2010 period compared with 4.9 percent in the absence of convertibility.     
           It should be pointed out that Naira convertibility is not a panacea for all of Nigeria's economic ills. In order to harvest the gains of Naira convertibility, it seems apparent that the implementation of macroeconomic policies which are transparent, consistent, and market friendly is not just desirable but in fact imperative. Thus, so long as an appropriate enabling environment is provided, our results demonstrate and confirm that Naira convertibility would be immensely beneficial to the Nigerian economy.       

                                                                      Footnotes

1.        "Openness" refers to the degree of dependence of an economy on international trade and financial flows. Thus, we may talk of trade openness and financial openness, Iyoha (1973). In this paper, the primary interest is on trade openness which may be measured by: (i) the import-income ratio, (ii) the export-income ratio, or (iii) the ratio of the sum of imports and exports to income. In the econometric estimations that follow, the three different measures were utilized but the import-income ratio performed best.
   
2.        The mechanism through which external trade affects economic development and growth may be briefly described thus: external trade leads to an increase in income, in the level of investment and on the state of technical knowledge in the country.  The increase in investment and improvements in innovations and technological progress then lead to increased productivity and competitiveness, and trigger a further increase in trade and in income.  This positive feedback continues and brings about a "virtuous circle" of increased trade and economic development.

3.        Since this is a linear equation, the elasticity-at-the-mean of a given independent variable is obtained as the coefficient of that variable multiplied by its mean value and divided by the mean of the dependent variable.



                                                                     References


Aliber, R. (1966), The Future of the Dollar as an International Currency. New York.

Argy, V. (1981), The Postwar International Monetary Crisis: An Analysis. London: George Allen & Unwin.

Borensztein, E. (1991), "Will debt reduction increase investment?" Finance and Development, vol. 28, No. 1, March.

Central Bank of Nigeria (1995), Annual Report and Statement of Account, December. Lagos.

Central Bank of Nigeria, Statistical Bulletin, various issues, Lagos.

Chenery, H.B. and A.M. Strout (1966), "Foreign assistance and economic development." American Economic Review, 56.4 September.

Chhibber, A. and S. Pahwa (1994), "Investment recovery and growth in Nigeria: The case for debt relief." In Onah, F.E., ed., African Debt Burden and Economic Development. Selected papers for the 1994 Annual Conference of the Nigerian Economic Society, May.

Edwards, S, (1993), "Openness, Trade Liberalization, and Growth in Developing Countries", Journal of Economic Literature.

Finch, D. and C. Michaelopoulos (1988), "Development, Trade, and International Organizations" in A.O. Krueger (ed.), Development with Trade (International Center for Economic Growth).

Fleming, J.M. (1964), The International Monetary Fund, Its Form and Functions. Washington, D.C.: IMF.

Ghura, D. (1995), "Macro Policies, External forces, and Economic Growth in Sub-Saharan Africa", Economic Development and Cultural Change.

Gilman, M. (1990), "Heading for currency convertibility". Finance and Development, September 1990.

Grossman, G.M. and E. Helpman (1989), "Growth and Welfare in a Small Open Economy", NBER Working Paper no. 2970 (National Bureau of Economic Research, Cambridge, Mass.).

Guitan, M. (1996), "Concepts and Degrees of Currency Convertibility" in M. Guitan and S.M. Nsouli, eds., Currency Convertibility in the Middle East and North Africa (Washington, D.C.: International Monetary Fund).

Hanke, S.H. and K. Schuler (1994), Currency Boards for Developing Countries: A Handbook. San Francisco: Institute for Contemporary Studies.

Haberler, G. (1988), International Trade and Economic Development (International Center for Economic Growth).

International Monetary Fund, IMF Survey, various issues.

Iyoha, M.A. (1997a), "External debt and economic growth in Sub-Saharan African countries: An econometric study." Final Research Report presented to the AERC (Nairobi, Kenya), March 1997.

Iyoha, M.A. (1997b), "An econometric study of debt overhang, debt reduction, investment and economic growth in Nigeria". Processed.

Iyoha, M.A. (1996), "Macroeconomic policy management of Nigeria's external sector in the post-SAP period". Nigerian Journal of Economic and Social Studies, vol. 38, no. 1, March.

Iyoha, M.A. (1995), "Traditional and contemporary theories of external trade"  in External Trade and Economic Development in Nigeria (Selected Papers for the 1995 Annual Conference of the Nigerian Economic Society) edited by A. H. Ekpo.

Iyoha, M.A. (1993), "International Trade and Policy", Working Paper, Department of Economics and Statistics, University of Benin, Nigeria.

Iyoha, M.A. (1973), "Inflation and 'openness' in less developed economies: A cross-country analysis". Economic Development and Cultural Change (October).

Khan, M.S. and M. Kumar (1993), "Public and private investment and the convergence of per capita incomes in development countries." IMF Working Paper WP193/51, June.

Krueger, A.O. (ed.) (1988), Development with Trade (International Center for Economic Growth).

Krugman, P. (1988), "Financing vs. forgiving a debt overhang: Some analytical notes." Journal of Development Economics, vol. 29, November.

Nsouli, S., P. Cornelius and A. Georgiou (1992), "Striving for currency convertibility in North Africa", Finance and Development. December 1992.

Ogbe, N.E. (1989), "The Internationalisation/Convertibility of the Naira", CBN Economic and Financial Review. March.

Pindyck, R. and Solimano, A. (1993), "Economic instability and aggregate investment." In O. Blanchard and S. Fischer (eds.) NBER Macroeconomics Annual. MIT Press.

Raheem, M.I. and O.F. Akinkugbe (1986), "Multiple exchange rate practice and Naira convertibility: A prospect?" Nigerian Journal of Economic and Social Studies. March.

Ram, Rati (1985), "Export and economic growth: Some additional evidence." Economic Development and Cultural Change, Jan.

Romer, P. (1986), "Increasing Returns and Long-run Growth", Journal of Political Economy.

Sachs, J. (1988), "The debt overhang of developing countries." In Findlay, R., ed., Debt, Growth and Stabilization:  Essays in Memory of Carlos Diaz Alejandro. Oxford, England: Blackwell.

Solow, R.M. (1957), "Technical change and the aggregate production function." Review of Economics and Statistics.

Tavlas, G.S. (1990), "International currencies: The rise of the Deutsche Mark". Finance and Development. September 1990.

Taylor, A.B. (1994), "Problems of monetary and financial integration in ECOWAS". West African Economic Journal. April.

Tew, B (1970), International Monetary Cooperation, 1945-70. London: Hutchinson University Library.

Ward, R., International Finance. New York: Prentice-Hall.