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Determinants of the Current Account Balance in Nigeria, Ghana and Cote d’Ivoire

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  • Sebil Olalekan Oshota

    (Southwestern University)

  • Ibrahim Adegoke Adeleke

    (University of Ibadan)

Abstract

This study analyzed the relationship between the current account balance of the balance of payment and its determinants for the periods 1978 to 2008 in Nigeria, Ghana and Cote d’ Ivoire. The analysis was based on the saving-investment theory and also in line with the intertemporal approach. Using a linear Vector Autoregressive (VAR) approach, our results show that all the variables, except the relative income (RELY), real effective exchange rate (REER) and domestic investment (INV) for Nigeria, Ghana and Cote’d’Ivoire respectively are important in explaining the long run relationship. However, there was no evidence of short run relationship between the variables and the current account balance in all the three countries. The presence of long run co-movements between the current account balance and its determinants found in this study implies the effectiveness of targeting one of the variables in influencing the long run behaviour of the other variables. The current account imbalance observed in our selected countries was unavoidable and reflected the complexity of the economic problems the countries faced during these years.

Suggested Citation

  • Sebil Olalekan Oshota & Ibrahim Adegoke Adeleke, 2015. "Determinants of the Current Account Balance in Nigeria, Ghana and Cote d’Ivoire," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 127-145, June.
    • Handle: RePEc:dug:actaec:y:2015:i:3:p:127-145
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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/2774/2434
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    Cited by:

    1. Bosede Victoria Kudaisi, 2022. "Trade, Financial Liberalisation And Current Account Balance In Nigeria," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 7(special), pages 36-50, June.
    2. Nkosinathi Emmanuel Monamodi, 2024. "The Impact of Current Account Balance on Economic Growth in South Africa," Economies, MDPI, vol. 12(2), pages 1-16, February.
    3. Yeboah, Samuel, 2023. "Unravelling the Tapestry: Understanding the Factors Shaping Current Account Imbalances in Ghana," MPRA Paper 117638, University Library of Munich, Germany, revised 06 Jun 2023.
    4. G. K. Sanni & A. U. Musa & Z. Sani, 2019. "Current Account Balance and Economic Growth in Nigeria: An Empirical Investigation," Economic and Financial Review, Central Bank of Nigeria, vol. 57(2), June.
    5. Kelvin Onwuka & Anayochukwu Basil Chukwu & Tobechi Faith Agbanike, 2021. "Current account and financial reforms: Evidence from sub‐Saharan Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4303-4314, July.

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