Effect of Naira Rate on Economic Growth in Nigeria
Abstract
This research work explored the effect of Nigeria’s currency rate on the economic growth of Nigeria. It is focused on establishing the extent to which Naira rate have influenced economic growth from using data spanning between 2006 and 2016; and the extent to which the Naira rate has influenced inflation in Nigeria within the same time frame. This study however employed Ordinary Least Squares technique of analysis to construct a regression model to test stated hypotheses. Findings revealed that the Naira rate has no significant impact on economic growth in Nigeria and that the Naira rate has a significant influence on inflation rate in Naira. The study, therefore, recommends that the export base of Nigeria should be strengthened to ensure a sustainable impact and that local manufacturing should be fully encouraged.
Keywords
Naira; Exchange Rate; Inflation; GDP; Currency
References
Aghion, P. f., P. Bacchetta, R. Ranciere, and K. Rogoff (2009). Exchange Rate Volatility and Productivity Growth: The Role of Financial Development. Journal of Monetary Economics 56 (4), 494–513. Akpan, P. L. (2008). Foreign exchange market and economic growth in an emerging petroleum based economy: Evidence from Nigeria (1970-2003). African Economic and Business Review 6(2), 46-58. Aliyu, S. R. U. (2011). Impact of Oil Price Shock and Exchange Rate Volatility on Economic Growth in Nigeria: An Empirical Investigation. Research Journal of International Studies Arize, A. C., T. Osang, and D. J. Slottje (2000). Exchange-Rate Volatility and Foreign Trade: Evidence from Thirteen LDCs. Journal of Business and Economic Statistics 18 (1), 10–17 Asher O. J. (2012). The Impact of Exchange rate Fluctuation on Nigeria Economic Growth (1980 – 2010). Unpublished B.sc Thesis of Caritas University Emene, Enugu State, Nigeria. Azeez, B. A., Kolapo, F. T. and Ajayi, L. B. (2012). Effect of Exchange rate Volatility on Macroeconomic Performance in Nigeria. Interdisciplinary Journal of Contemporary Research in Business, 4(1), 149-155. Barkoulas, J. T., Baum C.& Caglayan, M. (2002). Exchange Rate Effect on the Volume and Variability of Trade Flows. Journal on International Money and Finance, 21, 481- 406. Bergen, J. V. (2017, March 7). 6 Factors That Influence Exchange Rates. Retrieved from Investopedia: http://www.investopedia.com/articles/basics/04/050704.asp Bosworth, B., S. Collins, and C. Yu-chin. (1995). Accounting for Differences in Economic Growth. Unpublished manuscript. Brookings Institution, Washington, DC. David O. J., Umeh C. & Ameh A. A. (2010). The Effect of Exchange Rate fluctuations on Nigeria Manufacturing Sector. African Journal of Business Management, 4(14), 2994- 2998. Edwards, S. and E. Levy-Yeyati (2003). Flexible Exchange Rates as Shock Absorbers. NBER working paper 9867. Eichengreen, B and Leblang, D. (2003). Exchange Rates and Cohesion: Historical Perspectives and Political-Economy Considerations. Journal of Common Market Studies, 41, 797–822 Eme, O. A. and Johnson A. A. (2012). Effect of Exchange Rate Movements on Economic Growth in Nigeria. CBN Journal of Applied Statistics, 2(2), 1-28. Hausmann, R., L. Pritchett, and D. Rodrik (2005). Growth Accelerations. Journal of Economic Growth 10 (4), 303–329 Hossain, A, (2002). Exchange Rate Responses to Inflation in Bangladesh, (Washington D.C., IMF Working Paper No. WP/02/XX) Jhingan M. L. (2004). Money, Banking, International Trade and Public Finance, New Delhi: Vrinda Publications Ltd. Obadan M. (2006). Overview of Exchange rate Management in Nigeria from 1986 to 2006. Bullion Publication of CBN, July – September, 30 (3), 1-9. Obansa, S. A. J., Okoroafor, O. K. D., Aluko, O. O., and Millicent Eze (2013). Percieved Relationship between Exchange Rate, Interest Rate and Economic Growth in Nigeria: 1970-2010. American Journal of Humanities and Social Sciences, 1(3), 116-124. Ogun, O (2006). Real Exchange Rate Behaviour and Non-oil export Growth in Nigeria. African Journal of Economic Policy, 11(1) Onwumere, J. U. J. (2009). Business and Economic Research Methods. 2nd Edition ed. Enugu, Nigeria: Vougasen Limited Rodric, D. (2009). The Real Exchange Rate and Economic Growth, Harvard University, Cambridge, September. Servén, L. 2003. Real-Exchange-Rate Uncertainty and Private Investment in LDCs. Review of Economic Statistics, 1-25 Ubok-Udom, E. U. (1999). Currency Depreciation and Domestic Output growth in Nigeria: 1971-1995. The Nigerian Journal of Economics and Social studies, 41(1), 31-44 Ugbam, O. (2001). Quantitative Techniques: An Introductory Text. First ed. Enugu: Chirol Publishers.
