COMPARATIVE ANALYSIS OF SELECTED AFRICAN COUNTRIES CURRENCIES VALUES AND NAIRA EQUIVALENT; A DECLINING ECONOMY PERSPECTIVE

¹DR. NWANYANWU, H. DENNIS

School of Foundation Studies, General Studies

Kenule Beeson Saro-Wiwa Polytechnic

Bori, Rivers State, Nigeria

+2348033404189

E-mail: nwanydennism@gmail.com

 ²EGURU LETURA BLESSING

Department of Finance & Banking

Kenule Beeson Saro-Wiwa Polytechnic

Bori, Rivers State, Nigeria

Abstract;

Deficit trade balance experienced by African countries within the continent explained the response to exchange rate fluctuation in the developing countries. Not much attention has been paid to the use of asymmetries in explaining the effect of the exchange rate fluctuations and the consequent currency devaluation. Linear model was utilized in explaining the behavior of J-Curve hypothesis in a situation of exchange rate fluctuations.  Data were analyzed using bounds testing approach of co-integration of linear ARDL model to simultaneously estimate the long- and short-run parameters of the model. The paper found that the J-Curve hypothesis is effective African continents like West Africa though on the long-run. Evidence of short run effect is possible in South African continent. It was further discovered that the application of J-Curve model is no limited to African continents alone.  The paper concluded that currency devaluation cannot completely significant influence on trade balance as no inference could be drawn from African continents. The paper recommended for monetary integration in Africa and the need for single currency to fight against the Dollarization of American currency.

Keywords; Comparative Analysis, Currencies Values, Equivalence, Declining Economy.