Grain reserves and food security in Nigeria

This article assesses the strategic grains reserves policy of Nigeria and suggests appropriate measures needed for its success. The article traces the historical development of this strategy for meeting emergency food needs and identifies factors which determine the scope of such a programme. Current and proposed grains production and capacity of storage silos are far from adequate. In spite of this, however, confidence can be placed in this strategy to increase the supply of grains provided certain remedial steps are taken. Some of these steps include timely release of funds and land, increased emphasis on production and price forecasting and improved coordination between the two agencies involved.     

Understanding the consequences of diversification on financial stability

In this paper, we study the consequences of diversification on financial stability and social welfare using an agent based model that couples the real economy and a financial system. We validate the model against its ability to reproduce several stylized facts reported in real economies. We find that the risk of an isolated bank failure (i.e. idiosyncratic risk) is decreasing with diversification. In contrast, the probability of joint failures (i.e. systemic risk) is increasing with diversification which results in more downturns in the real sector. Additionally, we find that the system displays a “robust yet fragile” behaviour particularly for low diversification. Moreover, we study the impact of introducing preferential attachment into the lending relationships between banks and firms. Finally, we show that a regulatory policy that promotes bank–firm credit transactions that reduce similarity between banks can improve financial stability whilst permitting diversification.