MACROECONOMIC FACTORS AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

The study analyses the relationship between key macroeconomic variables and economic growth in Nigeria from 1981- 2022.  The specific objectives are to examine the relationship between exchange rate and the growth of Nigerian economy, to investigate the extent to which government expenditure significantly affect the growth of the Nigerian economy, to analyse how broad money supply significantly affects the growth of the Nigerian economy, and to examine the relationship between lending rate and economic growth in Nigeria. The study employs the ex-post facto research design, using time series data and the OLS econometric technique to analyse the variables. The findings revealed that exchange rate has a negative insignificant impact on real gross domestic product, government expenditure has a positive significant effect on real gross domestic product, that lending rate has a positive significant effect on real gross domestic product, and that money supply has a positive significant impact on real gross domestic product in Nigeria. The findings provide policy implications for macroeconomic management and economic planning in Nigeria. The analysis offers valuable insights that can inform future economic planning and decision-making in the country. The study therefore recommends that the government should ensure an appropriate monetary measure to stabilize the exchange rate, that they should create an enabling environment to improve healthy macroeconomic activities, they should make the monetary policy rate favourable to industrialists and investors, they should peg the monetary policy rate in line with the country’s macroeconomic situation, and that money supply should be allocated effectively to the productive sector of the economy.