Page 33 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 2, 2016, pp. 27-41

Eventually, the CBN reforms under Sanusi resulted in significant changes in
the structure and composition of the Nigerian banking industry. This created
expansion and growth opportunities for banks and investors already existing in
Nigeria and some others that had plans of coming into the Nigerian market.
However, in the heat of severe macroeconomic volatility in Nigeria and the
continuous crash of the global crude oil price, the Godwin Emefiele led CBN since it
came to power in June 2014, have also advocated several policies aimed at
promoting the country‟s productive sectors. In an effort to support the federal
government in its desire to hurriedly return the economy to glory, the CBN in recent
months have made several policies aimed at encouraging domestic production. One
of the policies implemented was actually aimed at limiting the access of importers to
foreign exchange. The apex bank in its regulatory activities, earlier ordered all
financial institutions and the Bureau De Change (BDC) operators not to sell foreign
exchange to any person who is not a local producer. When the BDCs flouted the
order, the apex bank finally shut the official window through which it sell foreign
exchange to them.

5. Abridged literature review
In recent decades, international economics studies (both theoretical and
empirical) have been dominated by the study of the relationship existing between
international trade and economic growth. This relationship has been traced back to
the works of Adam Smith and David Ricardo in their classical foreign trade theories.
According to them, trade between countries enhances the growth of individual
countries and the world economy at large, as specialization that accompany
comparative advantage ensures that countries utilize their productive resources at
full potentials. This classical view has however been criticized by modern
economists who argued that the theory is applicable only to the developed world.
According to Nurkse (1959), foreign trade performed as the engine of economic
th
growth in countries like Canada, United States and Australia in the 19 century
simply because they are advanced. Kravis (1970) supported Nurkse (1959) by
asserting that the real reason for growth through foreign trade in those countries was
the abundance of natural resources in their respective countries. According to
Cairncross (1961), while developed countries utilize their resources for the
production of export goods, developing and underdeveloped countries use theirs
basically for the production of commodities consumed domestically as only an
insignificant proportion of their productivity are destined for export. A good number
of other theorists in their views have supported the existence of relationship between
foreign trade and economic growth. Some of these theorists are: Beckerman (1962),
Lamfalussy (1963), Kaldor (1970), Thirlwall (1979), Lucas (1988), Rivera-Batiz and

33