Problem Identification

Comparative Analysis of West Africa EconomyByAwopeju K.A and Ebuh G.UDepartment of Statistics, Faculty of Physical Sciences, NnamdiAzikiwe University, Awka, Anambra State.

Problem Identification Generally, Africa as a continent has mainly developing countries which are still struggling to become a party to reckon with in terms of development. Nevertheless, among the weak, there is always a better group. This implies, though the continent has developing countries but some have stable and stronger economy than the other. This led to investigation of the strength of Nigeria economy in the mist of West African countries.

Objective The present civic unrest in Nigeria, couple with the complain of the populace on the poverty level, as well as the inability of some states to pay minimum wages for the workers led to the question that gave rise to the research interest on “How Strong is Nigeria Economy among the West African Counterparts?” The main interest of the researchers is to compare the financial indicators of Nigeria with other selected countries in West Africa.

Selected Countries In West Africa, there are 16 countries which include Benin Republic, Burkina Faso, Ivory Coast, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo. In the selection, only four countries were selected based on availability of necessary data from West African Monetary Institute (WAMI) and Central Bank of the countries. The selected countries are Nigeria, Gambia, Ghana, Guinea, Sierra Leone, and Liberia.

Selected Countries and their Currencies Nigeria Naira Ghana Cedis Gambia Dalsis Guinea Guinean Franc (GNF) Liberia Liberian Dollars Sierra Leone Leones For uniformity, the currencies were converted to US Dollar.

Ranking of African Countries Based on Nominal GDP In the ranking of countries based on Nominal GDP, Nigeria was ranked 2nd on the list, Ghana was ranked 9th, Gambia was ranked 49th, Guinea was ranked 36th, Sierra Leone was ranked 43rd and Liberia was ranked 47th.

Variables of Interest According to Global Finance Report on the determination of poorest and richest country, the GDP should be considered which shows the actual status of a nation. This implies GDP plays important role in the determination of how strong the economy of a nation. Also, Net Domestic Asset, Net foreign Asset and External Reserve of the countries were considered.

Methodology In the study, multiple discriminant analysis was used to discriminant the countries using the financial indicators. The method adopted called for matrix operation including inverse. In testing for normality, Shapiro-wilk test was used and the data was transformed.

Discriminant Analysis Hypothesis: H0: H1: Computation of Mean values Also,

Sample Mean Vectors: To determine the sample mean vector differences; there are 6 countries and are to be paired in two, therefore, the required number is . The pairing groups are:

For the computation of variance-covariance matrix: where k is the number of countries. (Onyeagu, 2003)

To test whether actually these 6 groups are distinct, we compute the mahalanobis (squared) distance among the populations (countries).

Continuation of Mahalobis Distance

To test for distinct between country Nigeria (1) and Ghana (2); Decision Rule: Reject the null hypothesis if Fcalculated is greater than Ftabulated. Otherwise, accept. Ftabulated= Fv,ni+nj-v-1,= F4,15,0.05=3.06 and Fcalculated =

Conclusion: Since Fcalculated is less than Ftabulated, there exists enough evidence to accept the null hypothesis and conclude that there exists insignificant difference between the financial measures of the countries.

Summary of Conclusion on Discriminant Analysis

Conclusion The classification technique shows that Nigeria, Ghana, and Guinea have similar economic strength in the past decade which is significantly different from the second group of Sierra Leone, Gambia and Liberia. This implies the economic growth of Nigeria cannot be referred to as significantly unique in Africa as some West-African countries have similar strong economy just as that of Nigeria.

References • KoladeAkinloye (2005): “The Impact of External Debt on Economic Growth: A Comparative Study of Nigeria and South Africa”. http://www.academia.edu/2789840/THE_IMPACT_OF_EXTERNAL_DEBT_ON_ECONOMIC_GROWTH_A_COMPARATIVE_STUDY_OF_NIGERIA_AND_SOUTH_AFRICA. • Global Financial Report (2013): “The World’s Richest and Poorest Countries” 2012 ranking of countries in the world. http://www.gfmag.com/tools/global-database/economicdata/11934-richest-poorest-ountries.html#axzz2WfQaPEby. Date Assessed: 19th June, 2013. • Wikipedia Free Encycloppedia (2013): “ List of African countries by GDP (nominal)”. http://en.wikipedia.org/wiki/List_of_African_countries_by_GDP_%28nominal%29. Date Assessed: 19th June, 2013. • World Population Prospect (2012): "World Population Prospects, the 2006 Revision” United Nations(Department of Economic and Social Affairs, population division) • OmololaOgunremi (2013):Financial development and economic growth: A comparative study of selected developing countries. http://udini.proquest.com/view/financial-development-and-economic-goid:305205527/ • Mans Soderbom and Francis Tea (2002): Are manufacturing exports the key to economic success in Africa? Centre for the Study of African Economies Department of Economics University of Oxford. http://economics.ouls.ox.ac.uk/12680/1/11921_are_manuf_exports_key.pdf

Thank You.

Problem Identification