Exchange Rate and the Economic Growth in Nigeria
Journal Title: International Journal of Management Sciences - Year 2014, Vol 2, Issue 2
Abstract
Exchange rate policy has been identified as one of the endogenous factors that can affect the economic performance of a nation. Exchange rate plays a key role in international economic transactions because no nation can remain in isolation due to varying factor endowment. Movements in the exchange rate have ripple effects on other economic growth. The study used secondary data which was gotten from the World Bank data base respectively and were analysed. The study adopted the Ordinary Least Square (OLS) method of estimation for data covering the period between 2000 and 2010. The results from the econometric analyses show that there is a short-run relationship between exchange rate, inflation rate, interest rate and GDP. The result obtained from the unit root analysis indicates at least one time series variable property is stationary. The study concludes that in Nigeria, the factors that influence the level of growth rate are extent of Exchange rate and its variables. Based on the findings, from the granger causality investigation procedure at 5% critical value are EXR, INTR, INFR, IMPT and EXPT among other variables affects economic growth. The study recommends the need to be technological incline in all sectors of Nigerian’s economy, excess and over budgetary inflation and implementation should be cut to barest minimal level to avert the ideal of external borrowing which most consequently result in external debt and services. The Nigerian government should tow to the path of redirecting its investment profile by channelling it towards capital projects of the government.
Authors and Affiliations
Onuorah Anastasia Chichi, Osuji Chinaemerem Casmir
Keywords
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