Studies of African Economies From Past to Future Vol.2

The Chapter investigated the transmission channels of monetary policy shocks on real per capita output in Nigeria for the period 1981 to 2017 using Vector Auto-regressive framework. The results of the impulse response functions showed that real per capita output, exchange rate, private sector credit and inflation responded heterogeneously to unexpected monetary shock and hence, provide a useful indicator for determining the effectiveness of monetary policy in the domestic economy. In the case of the forecast error variance decomposition the study revealed that shocks to monetary policy rate explained the largest variation in real per capita output followed by private sector credit and exchange rate. These shocks have a progressive impact on real per capita output except private sector credit, while the average contributions of shocks from equity price channel is below one percent. Therefore, the basic channels of monetary transmission are monetary policy rate, credit and exchange, while equity prices might not be a relevant channel of monetary policy innovation in Nigeria. Furthermore, the forecast error variance decomposition of inflation revealed that the sources of inflation are the monetary policy rate and private sector credit channel. The study therefore recommends that there should be judicious management of interest rate, credit and exchange rate policy to promote real per capita output in Nigeria.This Chapter identifies factors likely to explain business failure in the Cameroonian textile industry. A probit model based on a normality test provides a failure rate of about 54.45%, mainly explained as follows: companies with high operating expenses face an increase in their failure probability; associative or bank loan-based firms experience a high failure risk, unlike those created through equity, public grants and family support; high pricing practice compare to competitors increases the failure risk, contrary to low or average pricing modes; Formal work increases the failure risk while working in the informal significantly decreases this risk. Implementing tax and institutional reforms likely to encourage informal corporations to legally operate seems necessary to fight against unfair pricing behaviours.