Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Ownership Structure of Treasury Bills and the Nigeria Economy: A Pre-covid 19 Era VAR Analysis

Author(s): Onalo Ugbede, Ugwu James Ike, Odo John Onyemaechi, Ugwu Osmund Chinweoda, Agbo Elias Igwebuike, Nwankwo Simon Nwagballa Peter

This study was designed to investigate the impact of ownership structure of treasury bills on the Nigeria economy. Secondary data about Nigeria Gross Domestic Product (GDP) (dependent variable) and Central Bank of Nigeria Holding (CBNH), Deposit Money Banks Holding (DMBH) and Non-Banking Public Holding (NBPH) (independent variables) spanning over a period of 39 years (1981-2019) sourced from CBN statistical bulletin were used for this investigation. Since Trace unrestricted cointegration rank test and Maximum Eigenvalue unrestricted cointegration rank test collective results established the absence of cointegration equation(s), this study estimated Basic Vector Auto Regression (VAR) Model. Findings based on VAR model revealed contradictory relationship between dependent and independent variables based on different time lags. Particularly, while CBNH exhibited one year lag significant negative relationship with Gross Domestic Product (GDP), CBNH exhibited two year lag non-significant positive relationship with GDP. Also, while NBPH exhibited one year lag significant negative relationship with GDP, NBPH exhibited two year lag significant positive relationship with GDP. Finally, while DMBH exhibited one year lag non-significant positive relationship with GDP, DMBH exhibited two year lag non-significant negative relationship with GDP. Granger Causality tests results equally established that while NBPH and DMBH significantly Granger Cause GDP, CBNH does not Granger Cause GDP. Findings have both theoretical and practical implications. Theoretically, this investigation as a pioneer adds to existing literature on treasury bills and economies. Practically, findings suggested that treasury bills owned by CBN and DMB are not adequate enough to contribute to the growth of Nigeria economy. This study therefore recommended that to expand the Nigeria economy, CBN and Nigeria deposit money banks should increase their holding of or investment in treasury bills.

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