EFFECT OF MACROECONOMIC VARIABLES ON ECONOMIC GROWTH IN NIGERIA: 1990-2024

Abstract

The study investigated the effect of macroeconomic variables on economic growth in Nigeria covering 1990-2024. Expost-facto research design was adopted for the study. To achieve this, the researcher employed secondary data on included variables to carry out the analysis. The data were collected from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS). Auto regression Distribution lag (ARDL) model adopted with modification for the study. The data were subjected to diagnostic test which include Unit root test and Cointegration test before estimating the model. The findings of the study showed that the coefficient of Foreign Exchange Rate (FER) was statistically significant at 5% level, while Interest Rate (IR), Inflation Rate (INF) and Foreign Direct Investment (FDI) were no statistically significant at 5% level. It was concluded from the result analysis that Foreign Exchange Rate (FER) has positive and strong influence on economic growth, Interest Rate (IR) and Inflation Rate (INF) has a positive and weak influence on economic growth, while Foreign Direct Investment (FDI) has a negative and weak influence on economic growth in Nigeria during the period under review. The study recommended that Nigeria government and other policy maker/ key players should ensure to have sound macroeconomic policies that would formulates good policies towards growth. And that the environment should be conducive for domestic investors and companies towards indigenous productivity which will facilitate export economy and discourages import economy. This, by implication, would contribute immensely to economic growth in Nigeria.