BUSINESS SCHOOL

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    EFFECT OF PENSION FUNDS INVESTMENTS AND CHANGES IN CRUDE OIL PRICE ON ECONOMIC GROWTH IN NIGERIA
    (2021) JUMARE, Bashir
    Economic growth represents the expansion of a country‟s potential gross domestic product (GDP) or output. For instance, if the social rate of return on investment exceeds the private return, then tax policies that encourage the excess can raise the growth rate and levels of utility. Growth models that incorporate public services, the optimal tax policy lingers on the characteristic of services. The broad objective of this study is to examine the effects of contributory pension funds investments and changes in crude oil price on economic growth of Nigeria for the period 2010 to 2018. In achieving this objective, the study employed Ex-post facto research designs and also study utilized data from secondary sources. The study used time series econometric techniques with quarterly data spanning from q1-2010 to q4-2018 to explore the effects of contributory pension funds investments and changes in crude oil prices on economic growth in Nigeria which were subjected to statistical analysis using Equilibrium Correction Model (ECM) and Autoregressive Distributive Lag (ARDL) bound test approach to co-integration to determine the short-run and long-run dynamic relationship between the variables. To check the time series property of the variables, stationarity properties of the data and the order of integration are tested using the Augmented Dickey-Fuller (ADF) unit root test, Phillip-Perron (PP) test and Kwiatkwoski-Phillips-Schmidt-Shin (KPSS) test. All the variables are found to be cointegrated indicating the existence of long run relationship among the variables. The findings of the study clearly showed that the coefficient of total assets of pension funds was found to be positive and statistically significant on economic growth. Similarly, the coefficient of total pension funds contribution was found to be positive and statistically significant on economic growth and the coefficient of crude oil price was negative but statistically significant on economic growth. Base on the findings, the study recommended that Pension fund assets should be invested productively in diversified investment portfolios so as to generate increased returns and at same time minimize risks to both pension funds administrators and the contributors to the funds in Nigeria. Also, Nigerian government should ensure diversification of its export revenue base as a means of minimizing reliance on crude oil and petroleum products. This will further shield the economy from the impact of oil price shocks on the economy, and thus prevent the negative effects of the shocks from attaining a statistical significance level.