Resumen de Enhancing the Performance of the Maritime Sector in Nigeria: Effect of Macroeconomic Variables
Several studies have emphasized the potential of the maritime sector in enhancing Nigeria’s economic growth. Identifying how macroeconomic policy can be used to boost the performance of the maritime sector, however, has not received adequate attention in the literature. This paper examines the effect of macroeconomic variables on the performance of the maritime sector in Nigeria. Data for the paper was collected from the statistical Bulletin of the Central Bank of Nigeria (CBN) from 1981 to 2016 and analysed using OLS model with HAC Newey-West method of estimating the coefficient covariance. The result shows that exchange rate and foreign reserve have negative effect on the performance of the maritime sector. Although not statistically significant, the results suggest that exchange rate policy and fluctuation in the nation’s foreign reserve, has consequences for the performance of the maritime sector in Nigeria. Federal government capital expenditure was also found to have a positive effect on the performance of the maritime sector. Whereas it implies that increasing capital expenditure to the maritime sector would have a significant effect on the performance on its growth, statistical evidence shows that this might not be the case. More so, the regression result also shows that oil sector have continued to have a positive effect on the performance of the maritime sector in Nigeria. Nevertheless, the significance of this variable at 10% critical value shows that the relationship is weak hence, the need to diversify the economic activities in the maritime sector into non-oil sector as well. Examination of the regression model to identify the observations that had influence on the performance of the growth of the maritime sector identified the following period as having influence on the performance of the Nigerian maritime sector: 1993-1994, 1999-2000, 2005, 2009-2011, and 2013, and 2015-2016. These periods are associated with periods of high inflation in Nigeria, exchange rate devaluation, regime switch from military to democratic rule, debt burden issues, the 2008 global financial crisis and the 2016 economic recession period in Nigeria. As such, the economic implication is that despite the effect of rising inflation, fiscal adjustment and economic recession in Nigeria, the maritime sector was able to sustain its growth. It is therefore important for the nation to implement policies that will continue to support the growth of the maritime sector as the sector has the potential to serve as shock absorber in times of declining government revenue and economic crunch in Nigeria. In conclusion, the use of the HAC Newey-West covariance method to estimate the OLS model proved that it yields more robust estimates than when estimated using the Huber-White and ordinary covariance method.
