Citation:

Bilewu, Olukayode Abiodun, Orenuga, Babatunde, Abass, Kehinde Babatunde. "Impact of Selected Macroeconomic Variables on Economic Growth in Nigeria" International Research Journal of Economics and Management Studies, Vol. 4, No. 9, pp. 184-189, 2025. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V4I9P120

Abstract:

This study examines the influence of specific macroeconomic variables specifically the inflation rate, exchange rate, and level of transparency on economic growth in Nigeria, utilizing Gross Domestic Product (GDP) as a proxy for growth. The Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) provided the secondary data. The study utilized time series econometric techniques, such as the Augmented Dickey-Fuller (ADF) unit root test, the Johansen cointegration test, and the Auto-Regressive Distributed Lag (ARDL) model, to evaluate the short-run and long-run dynamics among the variables. The findings indicated that inflation has a positive and statistically significant effect on GDP, implying that moderate inflation levels can encourage economic activity and investment. On the other hand, the exchange rate had a negative but not statistically significant effect on GDP. This shows how unstable the naira is and how much Nigeria relies on imports. The level of openness exhibited a positive and statistically significant correlation with GDP, emphasizing the growth-promoting potential of trade liberalization while also indicating vulnerability to external shocks. The results show that Nigeria's growth path is very sensitive to macroeconomic stability, and the way these factors affect each other means that strong and well-coordinated policy actions are needed. The study suggests keeping inflation in a moderate and stable range, making sure the exchange rate stays stable by diversifying and exporting non-oil goods, and strategically increasing trade openness to make the economy more competitive while maintaining domestic industries.

References:

[1] Abdulaziz, A. H. (2016). The Relationship Between Inflation and Economic Growth: A Further Evidence. Journal of World Economic Research.
[2] Acemoglu, D. (2009). Introduction to Modern Economic Growth. Princeton University Press.
[3] Adahama, H. I., Ali, S., & MAhmut, A. (2024). An Analysis of the Effects of MAcroeconomics Variables on Economic Growth in Nigeria. Internatinoal Journal of Social Science Humanity And Management Research, 1587-1598.
[4] Adeniran, , J. O., Yusuf, A. S., & Adeyemi, O. A. (2014). The Impact of exchange rate fluctuation on the Nigerian economic growth: An empirical investigation. International Journal of Academic Research in Business and Social Sciences, 224-233.
[5] Aliyu, S. U. (2011). Impact of oil price shock and exchange rate volatility on economic growth in Nigeria: An empirical investigation. Research Journal of International Studies, 103-120.
[6] Bredino, S. (2024). Monetary Economics: A Concise Text. Sofiata Publications, Nigeria.
[7] Bredino, S., & Fiderikumo, P. (2018). Foreign Direct Invesment and Economic Growth in Nigeria. Journal of Economics and Business, Vol. 1, No. 3, 260 -267.
[8] Bredino, S., Fiderikumo, P., & Adedoyin, A. (2022). Fiscal Policy Implementation in Nigeria: Issues and Challenges. International Journal of Economics and Management Studies, 9(5), 32 -36
[9] Central Bank Of Nigeria. (2022). Annual Statistical Bulletin.
[10] Clever, G. A. (2007). Modern Macroeconomics. Port Harcourt: Pearl Publishers.
[11] Dickey, D. A., & Fuller, W. A. (1979). Distribution of the Estimators for Autoregressive Time Series with a unit root. Journal of the American Statistical Association, 74(1): 427-431.
[12] Fiderikumo, P., & Bredino, S. M. (2021). Price Volatility & Exchange Rate in Nigeria. Multidisciplinary Journal of Academic Research & Development, 1(2), 22 - 28.
[13] Iyeli, I. I. (2010). Empirical Econometrics. Port Harcourt: Pearl Publishers.
[14] Jhingan , M. L. (2008). Macroeconomic Theory. Delhi: Vrinda Publications.
[15] Jhingan, M. L. (1997). The Economics of Development and Planning. Delhi: Vrinda Publications.
[16] John, M. R., & Andrei, V. A. (2023). Impact of Selected Macroeconomic Variables in Economic Growth: Empirical Study in the Philipines. Journal of Economics, Finance & Accounting Studies, 5(3), 130-149.
[17] Lawal, E. O. (2014). Openness and economic growth in Nigeria: Evidence from cointegration analysis. Economics Research International, 1-9.
[18] Mohammed , H. A., Hakan , A., Zobayer , A., & Alauddin , M. (2021). Revisiting inflation and growth nexus in Bangladesh: an asymmetric cointegration based on non-linear ARDL approach. Finanzas y Political Econometica, 371-402.
[19] Nicholas, A., & Maxwell, O. (2023). The Impact of Selected MAcroeconomic Variable on Economic Growth in Nigeria from 1999 - 2021. African Banking And Finance Review Journal.
[20] Olomola, A., Ikpi, A., & Olayemi, J. (1995). Sources of growth and performance trends in Nigeria's agriculture, 1960-1992. Economics.
[21] Omebere, H. I., Ezenekwe, R. U., Uzoechina, B. I., & Nwokoye, S. E. (2024). Impact of Selected Macroeconomic Variables on Economic Growth in Nigeria. Journal of Economic Studies, 86 -102.
[22] Salami, G. O., Apelogun, K. H., Omidiya, O. M., & Ojoye, O. F. (2015). Taxation and Nigerian Economic Growth Process. Reserach Journal of Finance and Accounting, 6(10), 93-101.
[23] Shakhaowat, H. (2015). The Relationship Between Inflation and Economic Growth of Banglandesh: An Empirical Analysis from 1961 2013. International Journal of Economics, Finance and Management Sciences , 426-434.
[24] Sulaiman, L. A., & Azeez, B. A. (2012). Effects of External Debt on Economic Growth in Nigeria. Journal of Economics & Sustainable Development, 3(8), 71-79.
[25] Tucker, J. F. (1990). You & Foreign Money. Federal Reserve Bank of Richmond.
[26] Umaru, A., & Zubairu, A. A. (2012). Effect of inflation on the growth and development of the Nigerian economy: An empirical analysis. International Journal of Business and Social Science, 183-191.
[27] Yeason, C., Kaysher, H., & Rowshonara, A. A. (2019). Impact of Macroeconomic Variables on Economic Growth: Bangladesh Perspective. Information Management and Computer Science, 2(2), 19-22.

Keywords:

Gross Domestic Product, Inflation, Exchange Rate, Trade Openness, Economic Growth, Nigeria.